Key Highlights of RACP Bill, 2020 and Companies (Amendment) Bill,2020

Direct Tax

Highlights of Redevelopment Assistance Capital Program (RACP)  Bill, 2020  

www.carajput.com; RACP Bill, 2020

www.carajput.com; RACP Bill, 2020

1) New requirements for reregistration of charitable trusts etc. Approval under section 10(23)(C).

It is suggested that Re-registration u / s 12A/12AA and 80 G come into force from 1st April 2021 from the earlier extended date of 1st Oct 2020.

2) Extension of the time period to 31st march 2021 from 30th Nov for ITR Filing for the Assessment Year 2020-21.

3) Extension for furnishing a Certificate u / s 192 from 15 August to 31-3-2021.

4) As per section 54 to 54 GB

  1. The Extension of the time period to 31st Dec 2021 from 29th Sept for compliance or completion.
  2. The Extension of the time period to 31st march 2021 from 30th Sept for completion or compliance.

5) Chapter-VI A pursuant to heading B-

  1. The Extension of the time period to 31st Dec 2020 from 30th July for the compliance or completion.
  2. The Extension of the time period to 31st March 2021 from 31st July for the compliance or completion.

 6) As per Vivad ke vishvas Act-20

  1. Extension of Time Period to 31st Dec 2020.
  2. Extension of Time Period to 31st march 2021 from 31st Dec 2020 for completion or compliance.

7) Extension of the time period to 31st march 2021 from 30th Sept. For ITR filing for the Assessment Year 2019-20

8) No expansion of the tax payments.

9) Interest rate 3/4 percent pm or part thereof for late payment of taxes. (Only if tax payable is over Rs.1 lac)

10) Extension of the time period to 31st march 2021 from 31st Oct for Filing of Audit Report under the Provision for Assessment Year 2020-21.

11) Return for TDS / TCS is to be extended to 31st March 2021 for Feb & March-20 and Q 4 for March 20 (as applicable) for all the Sub-sections.

12) No liability shall be imposed & No evaluation be disciplined for the delay in paying taxes.

Explanation-The delay period refers to the interval between the due date and the payment time.

In Addition,

Further improvements are also suggested in the Income Tax Act.

Companies (Amendment) Bill, 2020

Highlights of Companies (Amendment) Bill, 2020

www.carajput.com; Comapnies Amendment Bill, 2020

www.carajput.com; Companies Amendment Bill, 2020

On Saturday, Lok Sabha introduced the company law amendment bill, which introduced 72 amendments to the Companies Act, 2013 to decriminalize and modify or abolish fines for different offenses, directed at enhancing the ease of doing business.

New chapter for Producer Company

Introduction of a new Chapter XXIA in the act related to Manufacturer Companies, which was originally part of the Companies Act of 1956;

Reduced penalty for Small companies, OPC and Start-Up companies

For extended the applicability of section 446B, referring to lesser penalties for small businesses and one-person companies, to all provisions of the Act which attract financial penalties and also extend the same reward to Producer Companies and start-ups

Direct Listing in foreign Jurisdiction

Allowing provisions for the direct listing of Indian public entities’ shares in allowable foreign jurisdictions

Update in the definition of Listed Company

Empowering the government to exclude private companies issuing specified classes of shares on exchanges from the concept of a listed company, in conjunction with the Securities and Exchange Board of India.

Remuneration for Qualified Director and NED

Furthermore, it is recommended that the exception given to main administrative roles from government-mandated pay limits in case a corporation faces liquidation be applied to cover independent directors as well.

Decriminalization of Companies Act

  • To comply with an in-house arbitration tribunal process, 23 compoundable offenses must be recategorized out of 66 compoundable offenses under the Act. Moreover, there will be seven compoundable offenses omitted.
  • 35 complex offenses, referred to as non-compoundable, include fraud, public interest damage or deception.
  • 48 sections have been modified to render decriminalization and 17 sections have been modified to improve living comfort;
  • These 66 violations, according to the law, were minor, technological or administrative violations and did not include fraud, harm to the public interest or other non-compoundable offence. That will also reduce the pressure on the Law Tribunal for the National Corporation.

Fresh Bench in NCLAT

It also allows for the creation of additional National Corporate Law Appeal Tribunal benches at locations designated by the Centre.

 Corporate social responsibility ( CSR)

Bill provisions allowed undertakings to carry over excess corporate social responsibility ( CSR) spending on successive years and exempted undertakings with a CSR requirement below Rs 50 lakh from the need to constitute a CSR committee.

Regards

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)

TAX AUDIT CEILING U/S 44AB FROM RS 1 TO RS 5 CR APPLIES W.E.F AY 2020-21

TAX AUDIT CEILING U/S 44AB FROM RS 1 TO RS 5 CRORE APPLIES WITH EFFECT FROM AY 2020-21

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www.carajput.com; Tax Audit

There might be some uncertainty between specialists as to the assessment year from which the modification to raise the tax audit ceiling under section 44AB from Rs 1 crore to Rs 5 crore applies, i.e. whether the amendment means with effect from AY 2020-21 (for accounts for the financial year 2019-20) or from AY 2021-22 (The financial year 2020-21).

Pursuant to paragraph (a) of Section 44AB, as it stood before the Finance Act of 2020, any person engaged in the company was required to have audited accounts if the overall sales, turnover or total receipt in business exceeds Rs.1 crore. The Finance Act, 2020 raised this ceiling to receive audited accounts from Rs.1 crore to Rs.5 crore in those situations where the sum of all collections in cash during the year and the sum of all payments rendered in cash over the year does not cross 5 % of total receipts and total payments, respectively.

Who is a binding and required Compulsory Tax audit?

A taxpayer is expected to carry out a tax audit if revenue, turnover, or gross business receipts surpass Rs 1 in the financial year. However, under some other cases, a taxpayer might be forced to have their accounts audited. In the tables below, we have classified the different circumstances:

POINT TO BE NOTED: The requirement of Rs 1 crore for a tax audit is expected to be raised to Rs 5 crore with effect from AY 2020-21 (FY 2019-20) if the taxpayer’s cash receipts are restricted to 5 percent cent of the gross receipts or turnover and if the taxpayer’s cash payments are restricted to 5 percent of the aggregate payments. Below are different categories of taxpayers below:

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Category of person Threshold
Business

 

www.carajput.com; Tax Audit Applicability

www.carajput.com; Tax Audit Applicability

Carrying on business (not opting for presumptive taxation scheme*) Total sales, turnover or gross receipts exceed Rs 1 crore in the FY
Carrying on business eligible for presumptive taxation under Section 44AE, 44BB or 44BBB Claims profits or gains lower than the prescribed limit under the presumptive taxation scheme
Carrying on business eligible for presumptive taxation under Section 44AD Observes taxable income below the limits specified by the presumptive taxation system and has income that exceeds the basic limit.
Carrying on business and is not eligible for presumptive taxation under Section 44AD by opting for presumptive taxation in any one financial year of the lock-in period, i.e. 5 consecutive years from the date on which the presumed taxation system was implemented. If the income reaches the permissible amount not to be paid for tax in the following five successive tax years from the financial year in which the assumption of tax was not introduced,
Carrying on business which is declaring profits as per presumptive taxation scheme under Section 44AD If the overall revenue, turnover, or gross receipts for the financial year do not exceed Rs 2 crore, the tax audit would not apply to such entities.
Profession

 

Who Carrying on the profession Total gross receipts exceed Rs 50 lakh in the FY
Who Carrying on the profession eligible for presumptive taxation under Section 44ADA 1. Claims for profit or gains below the permissible level under the presumptive taxation scheme

2. Profits increases the permissible sum not to be paid for taxation

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www.carajput.com; Tax Audit Applicability

Business loss

In case of loss from carrying on of business and not opting for a presumptive taxation scheme Total sales, turnover or gross receipts exceed Rs 1 crore
If the gross income of the taxpayer exceeds the basic threshold but has suffered a loss from carrying on a business (not opting for a presumptive taxation system) In case of loss from business when sales, turnover, or gross receipts exceed 1 crore, the taxpayer is subject to tax audit under 44AB
If continuing on business (opting a presumptive tax scheme under section 44AD) and making a business loss but with profits below the basic level In this Tax audit not apply
If going on business (presumed tax scheme under section 44AD applicable) and making a business loss but with profits above the basic threshold Declares taxable income far below limits specified by the presumed tax scheme and has income that exceeds the basic level.

It should be observed that there is no uncertainty in the amendment on this subject. It is explicitly mentioned in the amendment that it is valid from AY 2020-21 (FY 2019-20). In this regard, it is necessary to notice that the Memorandum of Understanding on the provisions of the Finance Bill 2020 and the Clauses Notes created as part of the Finance Bill 2020 clearly state that ‘These amendments will take effect from 1 April 2020 and will therefore apply in reference to the assessment year 2020-2021 and corresponding assessment years.’

As a result, the amendment made to section 44AB will apply from AY 2020-21 (Financial Year 2019-20) itself and no individual engaged in business will be allowed to obtain the accounts audited for FY 2019-20 if the revenue does not cross Rs 5 crore during that year given that the specified condition is met, i.e. the total of all cash receipts and the combination of all payments.

For effective from 01/04/2020, that is to say from the assessment year 2020-21, this requirement is changed as follows:

The threshold limit has been updated in order to increase it for an individual engaged in business from Rs . 1 crore to Rs . 5 crores if the following criteria are satisfied.

www.carajput.com; Thresshold limit for Business Assesse

www.carajput.com; Threshold limit for Business Assess

  • The sum of all receipts in cash in the preceding year shall not exceed 5 percent of such revenues.
  • The sum of all payments in cash during the previous year does not exceed 5 percent of all expenditures.

Through AY 20-21 the stated date shall be one month before the due date for the income tax return referred to Section 139(1). Thus, I inform you that the 44AB limit is still 1 crore (except as indicated above) and the 44AD limit is Rs . 2 crores. Also, there is NO Improvement IN FINANCE BILL 2020 in Section – 44AD, which deals with a special provision for calculating income and earnings of industry on a presumptive basis. ​

As a result of such an amendment, some strange situations could arise which CBDT should explain.

It should be noted that the modification of the increased threshold extends to any ‘person’ engaged in business and, thus, the value of the modification is available to all individuals, corporations, LLP, Firms, etc. engaged in business.

However, it should be explained that the amendment made is only applicable to an individual engaged in ’employment’ and thus an individual engaged in ‘profession’ would continue to be allowed to have audited accounts if the gross receipt in the profession exceeds Rs.50 lakh in the year.

Due to the planned amendment under the 2020 budget, the scenario is as follows:

– For assesse who have TO>2 crores (but less than 5 crores and have cash receipts and cash payments not exceeding 5 percent), they are NOT liable for a tax audit. This holds true regardless of whether the assessee shows income of up to 6 percent or 8 percent in 44AD or not.

– For assesse who have TO<2 crores (but have cash receipts and cash payments not exceeding 5 percent), they are liable for tax audit if they do not have an income of up to 6 percent or 8 percent as per 44AD.

Regards 

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)

Corporate and Professional Updates on 15th May 2019

Direct Tax Updates:

Image result for hd Pics On Direct tax
  • The income tax department Tuesday deferred for the second time the requirement for companies to include in their tax audit report the details of Goods and Services Tax and GAAR.
  • The reporting requirement of these details in income tax audit form has been kept in abeyance till March 31, 2020 — meaning that all income tax audit reports need not include details on GST and General Anti-Avoidance Rules (GAAR) till March 2020. Business entities having a turnover of more than Rs 1 crore (or Rs 2 crore if they have opted for presumptive taxation) and professionals with gross receipts of more than Rs 50 lakh have to comply with the tax audit requirements.
  • The due date for its filing is September 30 and if the taxpayer is covered by transfer pricing provisions, the due date is November 30. The Central Board of Direct Taxes (CBDT) in an order issued Tuesday, said the Board has received representations that implementation of reporting requirements under clause 30C (pertaining to GAAR) and clause 44 (pertaining to GST compliance) of the Form No 3CD may be deferred further. “The matter has been examined and it has been decided by the Board that the reporting under clause 30C and clause 44 of the Tax Audit Report shall be kept in abeyance till March 31, 2020.

RBI Updates:

Related image
  • Inflation forecasts lie at the heart of any central bank’s monetary policy decisionmaking. In India, the Reserve Bank of India (RBI) adopted the flexible inflation target (FIT) framework in June 2016 and a predetermined 4% inflation rate which made inflation forecasts critical in helping it decide whether to cut or hike rates. In recent years though, RBI has overestimated the threat of inflation.
  • The accuracy of RBI’s inflation forecasts compare favourably with other central banks’, according to an RBI study. However, a study conducted by Janak Raj and others of RBI argues that the forecasts have been largely unbiased, barring two major episodes of deviation driven by unexpected food price movements. In the study, the authors compare inflation forecast data with actual inflation.

Other Updates:

  • Oil imports from Iran down 57% y/y in April: Trade
  • US commerce secy warns India against retaliatory tariffs
  • Airtel to merge VSAT ops with Hughes India unit
  • NCLT begins bankruptcy process for RCom
  • Essar shareholder seeks ban on Mittal’s bid
  • India IT & biz market to reach $14.3 bn by 2020
  • Wipro builds blockchain digital currency in Thailand
  • Kerosene subsidy bill builds up 21% to Rs 5,800 cr in FY19; LPG jumps 49.4%
  • Alembic Pharma forms JV to enter a difficult $100 bn Chinese market
  • Zee stake sale at advanced stage, progressing steadily.
  • BSE Q4 net profit drops 16.46 pc to Rs 51.86 crore
  • RBI’s holding company model for banks will help contain NPAs, says Charan Singh
  • IMF chief Christine Lagarde says US-China tensions ‘threat’ to world
  • Rupee slips to 69.43 against US dollar
  • Multifold increase in investments in B2B startups
  • NBCC offers just Rs 20 crore to operational creditors.
  • TRAI pulls up DTH, cable operators for not compliying with new tariff
  • DCM Shriram reports nearly six-fold jump in Q4 net profit at Rs 293 cr
  • Patanjali gets time till May 7 for filing resolution plan
  • Ambuja Cements’ volumes, realisation disappoint
  • Netherlands got $12.8-b Indian FDI in 2017, 2nd biggest after Singapore
  • Review safeguard duties on solar cell imports, Japan tells India.

Key Due Dates:

  • GSTR-3B for the month of April 2019 is 20th May 2019.

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 Updates on 13th May 2019

Direct Tax Updates:

Image result for hd Pics On Direct tax
  • ITR-3 (Excel Utilities) has been issued by CBDT on 10/05/2019 for assessment year 2019-20 (i.e. for financial year 2018-19) Now Tax audit can be done by Chartered Accountants for Individual & HUF.
  • Managerial remuneration: Where a company made provision for payment of managerial remuneration to assessee, same created an obligation on assessee to bear tax liability on salary.
  • The Income Tax Department will now share information such as reported turnover and gross income declared with the Goods and Services Tax Network to check tax evasion. The I-T Department and GSTN will enter an agreement on the modalities of information sharing. The Central Board of Direct Taxes has said the agreement will include provisions for confidentiality, a mechanism for safe preservation of data and timelines for furnishing information.

Indirect tax Updates:

Image result for hd pics on Indirect tax
  • Hindustan Coca-Cola Beverages (HCCB) and distributors of FMCG and consumer durable firms have come under the lens of the goods and services tax (GST) authorities over so-called post-sale discounts offered by manufacturers.
  • GST payable on freight charges recovered from customers without issuance of the consignment note. Case Name: In re Siemens Limited.
  • Gujarat High Court in the matter of Octagon Communications Pvt Ltd Vs Union of India allows filing of GSTR-3B without payment of GST.
  • Input Tax credit is admissible even if Consideration is paid through Book Adjustments. In re Senco Gold Ltd GST AAR West Bangal.

Other Updates:

  • Piramal Group plans to buy operational renewable power projects of Mytrah
  • NBFC crisis imminent, says Corp Affairs Secy
  • RBI study finds why there’s a dip in bank deposits
  • Positive sentiment continues for manufacturing sector in Q4, capacity utilisation up at 80%: FICCI survey
  • NCLT dismisses ICICI Bank’s plea to initiate insolvency proceedings against Era Infrastructure
  • FPIs press exit button, pull out Rs 3,207 crore from markets in May
  • DMart Q4 net profit rises 21.4% at Rs 203 crore but margins remain weak
  • PNB Housing Finance reports net profit of Rs 379.7 cr in Q4FY19; up 51%
  • Apple’s wait bears fruit with sub-continent’s biggest store in Mumbai
  • Reliance entry to digitise 5 million kirana stores by 2023: report
  • SRF to sell engineering plastics business to DSM India for ₹320 crore
  • PC Jeweller gets board’s nod for export division demerger
  • Tata group’s perfume brand Skinn eyes Rs 500-crore turnover by 2023
  • Vedanta’s benign March quarter results bring no solace for investors
  • Accor in talks to invest up to $50 million in Treebo Hotels
  • NCLAT dismisses insolvency plea against SpiceJet
  • Unilever considers $1 billion bid for skincare brand Drunk Elephant
  • Govt to set up panel under DGFT to look at steel availability for engineering exporters
  • Moody’s India probing IL&FS AAA rating by ICRA executives after whistle-blower complaint
  • US-China talks break up with no deal after Trump hikes tariffs on $200 billion in Chinese imports
  • Dalmia Bharat Q4 profit jumps over 2-fold to Rs 264 cr
  • Jaypee Infratech insolvency: Lenders ask NBCC to withdraw some conditions
  • COAI approaches DoT to stop sale of mobile signal boosters on e-commerce sites.

Key Due Dates:

  • GSTR-3B for the month of April 2019 is 20th May 2019.

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 DEC 22,2016

Professional Update for the Day:

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Direct Tax:-

  • ITAT Mumbai held that the surplus/savings arising on prepayment of deferred cannot be taxed u/s 28(iv) as by making prepayment of future liability at present value no monetary benefit arises to assessee as the savings it made by prepayment would get set off against the interest it loses by making prepayment. [Grindwell Norton Ltd. Vs Addl. CIT]

Indirect Tax:-

  • CESTAT Chennai held that the Domestic Tariff Area (DTA) unit having paid the service tax on reverse charge mechanism on behalf of SEZ unit of the company, the portion of such tax attributable to the SEZ is denied by the adjudicating authority to avail CENVAT credit thereof. [M/s. Carborundum Universal Ltd. Vs CCE, LTU]

GST UPDATE:-

  • Registration details of VAT, CST, Service Tax, Excise, IEC No, CIN/LLPIN, Entry tax, Entertainment Tax etc have to be given in GST Enrolment.

MCA update:-

  • MCA to withdraw eforms -INC-2 & INC-7 shortly. Stakeholders are advised to use SPICe forms- SPICe, SPICe eMoA & SPICe eAoA accordingly.

RBI Update:-

  • Reserve Bank has withdrawn its rule issued on Monday that imposed restrictions on deposits of old notes worth more than Rs.5000 before December 30 after being vilified for it.

Other Update:-

  • NIRC of ICAI is organizing a Seminar on IND AS on 24 December (Sat) at 9.45 AM at NDMC Convention Centre, CP, Delhi. Pay at www.nircseminars.org.

Key Dates:-

  • Issue of DVAT Certificate for Deduction made in Nov : 22.12.2016

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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 MAY 25, 2016

Professional Update For the Day:

Untitled15ADirect Tax:

IT : Merely because creditor could not be traced on date when verification was made, is not a ground to conclude that there was cessation of liability in terms of section 41(1) because cessation of liability has to be cessation in law, of debt to be paid by assessee to creditor[2016] 69  257 (Karnataka) Commissioner of Income-tax v. Alvares & Thomas

Transmission charges for electricity won’t attract TDS under sec. 194J[2016] 69  252 (Karnataka) Commissioner of Income-tax v. Gulbarga Electricity Supply Co. Ltd.

IT: TDS – the payment paid by the assessee to scheduled banks for opening letters of credit was in the nature of interest u/s 2(28A) – but since the amount had been paid to scheduled banks no tax was required to be deducted at source u/s 194A – No disallowance u/s 40(a)(ia) – M/s Vardhman Chemtech Pvt. Ltd. Vs. ACIT, Chandigarh (ITAT Chandigarh)

IT: Revision u/s 263 – the disallowances u/s 14A and u/s 36(1)(iii) of the Act were the matters before the CIT(A) – the same does not come under the jurisdiction of the CIT u/s 263 – M/s Deepak International Ltd. Vs. JCIT, Cir-V, Ludhiana (ITAT Chandigarh)

Bogus purchase and sale of shares: Law explained as to on whom the onus is to show that the purchase and sale of shares are bogus and the circumstances required to be proved by the AOArvind Asmal Mehta vs. ITO (ITAT Mumbai)

S.143(1)/ 147: Entire law on the reopening of s. 143(1) assessments in the light of Zuari Estate Development 373 ITR 661 (SC) explained Indu Lata Rangwala vs. DCIT (Delhi High Court)

Indirect Tax:

ST: Recovery of interest – Section 73B of the Finance Act 1994 – Collected Service tax from the transporters when no service tax was payable and not deposited to the Government – later amount was deposited with the government – Demand of interest set aside – M/s Chhattisgarh State Co-operative Marketing Federation Ltd. Vs. CCE&ST, Raipur (CESTAT New Delhi)

SC : Absent cargo loading / unloading, mere labour supply at customer’s packing-plant not ‘CHS’ [TS-197-SC-2016-ST]

CESTAT : Upholds input credit reversal on exempt goods; Duty-payment cannot render them ‘dutiable’ [TS-196-CESTAT- 2016-EXC]

Service Tax : Services received from foreign intermediary in connection with raising of External Commercial Borrowings (ECB) is liable to service tax under ‘Banking and Other Financial Services’ under reverse charge in hands of Indian service recipient[2016] 69  266 (Mumbai – CESTAT) Gitanjali Gems Ltd. v. Commissioner of Service Tax

Cenvat Credit : Payment of cenvat-reversal under rule 6 of CENVAT Credit Rules, 2004 is in nature of ‘other tax’ and is, therefore, not includible in ‘transaction value’ of exempted goods, even if reversal amount is recovered from buyers

Cenvat Credit : When assessee is paying specified percent cenvat-reversal on value of ‘exempted HDPE pipes’ used for manufacturing ‘exempted sprinkler system’, they are not required to pay cenvat-reversal on value of ‘exempted sprinkler system'[2016] 69  265 (New Delhi – CESTAT) Commissioner of Central Excise, Indore v. Kriti Industries (India) Ltd.

SC: 9 Judge bench to decide entry tax validity; Hearings to commence July 18 [TS-200-SC-2016-NT]

Cenvat Credit : If Modvat credit could not be used by assessee due to restriction imposed by department, balance lying in Modvat account must be allowed as credit in Cenvat account[2016] 69  216 (Patna)Commissioner of Central Excise v. Bata India Ltd.

Deputation of employees and sharing of cost on actual basis with group Cos. doesn’t amount to rendering of service[2016] 69  198 (Mumbai – CESTAT) Franco Indian Pharmaceutical (P.) Ltd. v. Commissioner of Service-Tax

VAT & ST: Validity of law – rate of tax – interstate movement of goods – The law validly enacted by a State Legislature cannot be challenged on the ground that it defies logic and common sense – M/s Schwing Stetter (India) Pvt. Ltd. Vs. CCT (Madras High Court)

Company Law:

Query: Is Director Identification Number (DIN) mandatory for filing Form FTE with ROC?

Answer:  No, DIN is not mandatory for Managing Director or Director of the Company for filing Form FTE to strike off the name of Company under the Fast Track Exit mode Scheme. Details of Managing Director or Director can be filled up for inserting Permanent Account Number (PAN) or Passport Number instead of DIN.

Query: Whether a partner would be able to transfer his ‘economic rights’?

Answer: A partner’s economic rights (i.e. rights of a partner to a share of the profits and losses of the LLP and to receive distribution at the time of winding up) in the LLP shall be transferable. However, such a transfer shall not by itself cause the partner’s disassociation or a dissolution and winding up of the LLP.

However, such transfer shall not entitle the transferee or assignee to participate in the management or conduct of the LLP’s activities. Therefore, the transferee would not be deemed to be a ‘partner’ of the LLP just because a partner has transferred him the ‘economic rights’. For becoming a partner of LLP, the manner specified in the LLP Agreement or the provisions of the Act would have to be followed.

Other Update : 

ICAI: Committee on Economic, Commercial Laws & WTO (CECL&WTO) is organizing a Live Webcast on “Identifying Common FEMA Contraventions” on Friday, 27 May 2016 at 4-6PM. Link athttp://estv.in/icai/27052016

Key Dates:

Issue of TDS/TCS certificates for March quarter by all deductors/collectors: 30.05.2016

Due date for e-filing of form no. 61 for Q4 extended to 31st October, 2016 from 30th April, 2016. CBDT Circular no. 14/2016 dated 18/05/16.

 “When you judge another, you do not define them, you define yourself.”

Don’t find fault, find a remedy.  -Henry Ford

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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 MAY 5, 2016

Professional Update For the Day:

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DIRECT TAX:

IT: Waiver of levy of interest u/s 234B – Application made u/s 119(2)(a) before CCIT – Chief Commissioners of Income Tax cannot exercise that power except in accordance with directions which are issued by the CBDT – Arun Sunny Vs. CCIT & DCIT (2016 (5) TMI 74 – Kerala High Court)

IT: Deemed dividend addition u/s.2(22) – trade advance in relation to business transaction cannot be treated as deemed dividend – M/s Penguin Apparels Pvt. Ltd. Vs. ACIT (2016 (5) TMI 71 – ITAT Chennai)

CBDT has extended due date for payment of TDS on Transfer of Immovable Property u/s 194IA from the existing 7 days to 30 days – Notification No.30/2016, dt.29.04.2016

CBDT has issued Income Tax (10th Amendment) Rules, 2016. The Board has made submission of report in relation to the approval of in-house research and development facility in Part A of Form 3CL and quantifying the expenditure incurred on in-house research and development facility by the company during the previous year and eligible for weighted deduction in Part B of Form No.3CL, electronic. It has also introduced a new Form 3CLA to be submitted electronically to the Secretary, Department of Scientific and Industrial Research on or before the due date specified in Explanation 2 to sub-section (1) of section 139 of the Act for furnishing the return of income, for each succeeding year. 

INDIRECT TAX:

ST: Test of input being used in or in relation to manufacture is to be applied to consider allowance of CENVAT credit of the service tax paid on the input utilized and having relevance to the output manufactured –M/s ITC Ltd. Vs. CCE, Salem (2016 (5) TMI 89 – CESTAT Chennai)

VAT & ST: A quasi judicial authority should discharge the statutory discretionary powers independently and not under the dictation of superior officers – Kumagai Skanska Hcc Itochu Group Vs. CVAT (2016 (5) TMI 77 – Delhi High Court)

Delhi Com Vat in a meeting informed that the Notification dated 12/4/16 relating to ITEM / ITEM Code being issued by finance deptt. after partial modification from relevant deptt. to come up soon. Further, assured DVAT systems will be ready with the option of accepting Q4 returns on old pattern or new pattern by 8/5/16. Furthermore, vide Notification no. 157 dated: 3/5/16 use of DSC for Q4 made optional for all dealers. TEAM STBA

OTHER UPDATE

IASB,ICAI org. certificate course on concurrent audit at hamirpur from may 7, for regn call: 09418026466, or mail at  info@himachalicai.org

Registration opens for ICAI certificate course on service tax starting @ Delhi from 4 June 16, contact- 120-3045954,  visit www.idtc.icai.org

ICAI invites innovative suggestions for govt. on policy matters. Link: https://goo.gl/2OymKi  Email: neac@icai.in

Dena Bank invites applications by CA firms for empanelment as Concurrent Auditors for the period July 2016-June 2017 to be submitted by 10.05.16.

KEY DATES:

Last date of E-payment of service tax foe April by companies vide Challan No. GAR-7 -06/05/2016

It should be noted that – Last date of filing TDS returns for F.Y 2015-16 shall be 15thMay 2016.

WORD OF WISDOM:

One today is worth two tomorrows. -Benjamin Franklin

“Keep your eyes on the stars and your feet on the ground.”

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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 MAY 2, 2016

Professional Update For the Day: 

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DIRECT TAX:

Disallowance of the deduction claimed u/s 54 – two flats situated on different storey – Held that:- There is nothing in these sections, which require the residential house to be constructed in a particular manner. The only requirement is that it should be for the residential use and not for commercial use.We do not think that the fact that the residential house consists of several independent units can be permitted to act as an impediment to the allowance of the deduction under section 54/54F.(Surendra Sharma Versus Income Tax Officer, Ward 6 (3) , Jaipur).- 2016 (4) TMI 1098 – ITAT JAIPUR

IT: Period of Limitation for passing the Block Assessment Order – benefit of exclusion of the period during which there was a stay order against the order of special audit is available to Revenue – VLS Finance Ltd. & Anr Vs. CIT & Anr – 2016 (4) TMI 1133 – Supreme Court

Society having 2 PAN cards asks to surrender duplicate one[2016] 68 taxmann.com 297 (Delhi) Sri Ram Chandra Mission v. Commissioner of Income-tax

IT: Assessment against non-existing companies to be held as void ab initio – Orbit Corporation Ltd. Vs. DCIT, Central Circle-47, Mumbai – 2016 (4) TMI 1130 – ITAT Mumbai

Disallowance of interest paid by the appellant to the bank as well as to the other parties – Held that – The assessee was able to establish that he had incurred the expenditure wholly and exclusively for the purpose of business and therefore there is no justification for the revenue to disallowance the interest component. The revenue cannot claim to put itself in the armchair of the businessman and decide how much is reasonable expenditure. (M/s. Lakhani Shoe Co. Pvt. Ltd. Versus The ACIT, Circle-2, Alwar)-  2016 (4) TMI 1127 – ITAT JAIPUR

A transaction couldn’t be deemed as transaction of agency just because word ‘agency’ was written in agreement
IT : Where assessee-logistic company did not deduct TDS on payment made to overseas organizations for availing their logistic services, since transaction was on principal to principal basis and merely word ‘agency’ was used in agreement did not mean that there existed relationship of agency, TDS was not required to be deducted[2016] 68 taxmann.com 384 (Kolkata – Trib.) Balmer Lawrie & Co. Ltd. v. Income-tax Officer

Transactions having contingent impact on profit/ losses are not international transactions. [ Siro Clinpharm Pvt. ltd. vs. DCIT (ITAT Mumbai)].

CBDT notifies new form 35 for e-filing of appeal with CIT (A). IT notification no. 11/2016.

INDIRECT TAX:

In terms of the provisions authorization has to be specifically from the foreign service provider and cannot be fastened upon the Indian Service recipient by the Revenue – In absence of such authorization no liability would fall upon appellant.(Escorts Ltd. Versus CCE, Jaipur And Vice-Versa)- 2016 (4) TMI 1077 – CESTAT NEW DELHI

Seeking cross-examination of certain witnesses – Petitioner submitted that show cause notice is based on several statements of witnesses including those of the experts and any reliance on such statements without offering such witnesses for cross examination would be opposed to the principles of natural justice. Held that:- the reasons cited by the adjudicating authority are completely baseless. Merely because, the concerned witnesses have not retracted their statements would not be a ground to deny cross examination. .(M/s Mulchand M. Zaveri & 1 Versus Union of India & 1)- 2016 (4) TMI 1074 – GUJRAT HIGH COURT

Additional Commissioner of Delhi VAT can’t reject application filed under Amnesty Scheme [2016] 68taxmann.com 385 (Delhi)Jaycon Infrastructure Ltd. v. Commissioner of Trade & Taxes

CST & VAT: Delhi VAT – Where assessee, a bank, made advances to customers for purchase of cars and said cars were hypothecated to bank as security and upon default in repaying loan bank had right to repossess car and brought it to sale, disposal of repossessed cars by bank constituted ‘sale'[2016] 68 taxmann.com 296 (Delhi) Citi Bank v. Commissioner of Sales Tax

Amount received by bank from sale of hypothecated goods is liable to sales tax under Delhi VAT

Company Law:

MCA clarifies that the Companies (Accounting Standards) Amendment Rules, 2016, dt.30.03.2016 is applicable from F.Y.2016-17. Cir.No.04/2016.

Government increases interest rates on employee provident fund (EPF) contributions from 8.7% to 8.8% for 2015-16.

Taxis that run on petrol or diesel will not be allowed to ply in NCR from May 1.

Key Dates:

Last date of E-payment of service tax foe April by companies vide Challan No. GAR-7 -06/05/2016

Income Tax Updates:-

The facility to upload online quarterly TDS/TCS statements in the E-Filling portal shall be available with effect from 1st May 2016. (Click here to see the procedure)

Bulk upload of form 15CA, Form 15CB and Form 15CC are available for E-Filling.

No teacher, no professor nor a mentor can teach the important lessons in life better than a hungry stomach and an empty pocket.

The things that we love tell us what we are. -Thomas Aquinas

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T:011-233 -4 -33333 ,  9-555-555-480 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)