CORPORATE AND PROFESSIONAL UPDATE AUG 9, 2016

Direct Tax:

Kolkata ITAT allows assessee’s (cooperative bank) appeal against levy of penalty u/s 271FA for delay in furnishing annual information return (‘AIR’) u/s 285BA, accepts assessee’s “bonafide ignorance” of relevant provisions as sufficient cause for non-compliance.[TS-425-ITAT- 2016(Kol)]

Delhi High Court in the below citied case held that The payment made by the Petitioner to Steria France for the managerial services provided by the latter cannot be taxed as fee for technical services and are not liable to withholding of tax u/s 195.( Steria (India) Ltd. Vs. CIT & Anr.)

Fee charged by Finance Co. for collecting EMI from bank customers would be considered for sec. 36(viii) deduction. [Gruh Finance Ltd. v. Assistant Commissioner Income-tax, Circle-4, Ahmedabad]

No disallowance of ITC for mere technical defect in VAT invoice.[M/s Avdesh Tracks Private Limited vs. The State of Punjab and another (Punjab & Haryana High Court)]

NCLT has issued order to prescribed Rs. 200/- per inspection as the fee for inspection for the records as provided under Rule 114 of the NCLT Rules,2016

Only when a corresponding liability arises on the ONGC to pay up the accrued amount, the income will become taxable. [Deep Industries Limited vs Assistant Commissioner of  Income Tax, Circle-1-2016(8)TMI 225 – Gujarat High Court]

The assessee is eligible for the claim of depreciation u/s 32(1)(ii) on the amount of intangible assets acquired by it as per Business Transfer Agreement. [Grindwell Norton Ltd. vs Addl. CIT 1 (1) , Mumbai and Vice-Versa – 2016 (8) TMI 222 – ITAT MUMBAI]

 IT: MAT computation – deferred revenue expenditure is nothing but a window dressing and the authority should not be mislead or guided by the balance sheet which is prepared to satisfy the shareholders. It is the P&L a/c prepared on the basis of the books of accounts as contemplated in Part-II of Schedule-VI which should form and assist to find out what is the profit earned and on that profit tax is levied – CIT & Anr Vs. Karnataka Soaps & Detergents Ltd. (Supreme Court of India)

ITAT Chennai in the below citied case held that the mere sale of few pieces of lands here and there, now and then, irrespective of their value, as long as the said assets/lands did not lose the basic character of agricultural lands, does not constitute business activity for the assessee. (The DCIT, Corporate Circle 6 (1), Chennai Vs. Shri S. Amar Narayana Reddy)

Gujarat High court in the below cited case held that the Tribunal has rightly decide that the assessee is entitled for deduction under Section 801A of the Income Tax Act, 1961 without deducting the amount of subsidy given by the Government to the farmers and accordingly allowed the claim of the assessee .(CIT, Ahmedabad Vs. Kishan Discretionary Family Trust)

Indirect Tax:

Punjab and Haryana High Court held that no disallowance of ITC for mere technical defect in VAT invoice.( M/s Avdesh Tracks Private Limited vs. The State of Punjab and another

ST: Erection Commissioning or Installation Services – receipt of labour charges for installation and commissioning of GRP Pipes for various customers – The pipes that the respondent / assessee had to lay were not plant machinery or equipment – demand was rightly set aside – Addn.C.C.E. Vs. M/s Strategic Engineering Pvt. Ltd. (Madras High Court).

DVAT prescribes Delhi Sugam-2 (DS2) to be produced at check-post or barrier for bringing the goods in Delhi – Notification No.F.7(433)/Policy-II/VAT/2012/PF/1259-70, dt.08 JAN 2016.

DVAT specifies Conditions for downloading Central Statutory forms online – Notification No.F.3(556)/Policy/VAT/2015/1271-82, dt.08 JAN 2016.

Transportation services up to customer’s premises eligible for credit if transfer of title takes place therein-(Commissioner of Central Excise, Service Tax, Bengaluru-IV v. Ultra Tech Cement Ltd.)

Delhi HC sets aside order passed by Jt. Secretary to Govt. of India rejecting assessee’s revision application u/s 129DD of Customs Act, absent valid signature. It Rejected Revenue’s submission that it is consistent practice of Dept. of Revenue that only draft orders are signed by Adjudicating Authority and on that basis, certified copies of final orders are issued to parties and that the word ‘draft’ is mere appendage. [TS-299-HC-2016(DEL)-CUST]

Melting and converting old batteries into lead plates amounts to manufacture under UP VAT.( Shyam Behari Lal Keserwani v. Commissioner, U.P. Trade Tax, Lucknow)-[2016] 72  42 (Allahabad)

Normal mining exp. couldn’t be disallowed just because assessee was engaged in illegal mining.(Obulapuram Mining Company (P.) Ltd.hj v Deputy Commissioner of Income-tax, Central Circle-1 (3), Bangalore)

GST

ICAI releases BGM on Model GST Law- Order online https://goo.gl/NxX2n5 and download soft copy from www.idtc.icai.org

ICAI Updates:-

ICAI invites comments on any aspect of exposure draft of IND AS 102, share based payments, issued by the Accounting Board of the Institute of Chartered Accountants of India dated on 4/8/2016.

RBI Updates:-

RBI launched new website named “sachet” on Thursday, where information regarding entities that are allowed to accept deposits, lodge complaints, and share information regarding illegal acceptance of deposits by unscrupulous entities can be obtained.

SEBI clarified that in case an eligible seller does not receive the tender/offer form, he can participate in the delisting by providing the application in writing on plain paper, signed by the eligible seller, by introducing the issue in the FAQs on SEBI (Delisiting Of Equity Shares) Regulations, 2009

Key Dates:

• The income tax department extends ITR-V verification deadline till 31 JAN 2016.
• 10.08.16 is last date to file ER-1,2 & 6 for Excise returns by Non SSI assesses, EOUs,& by units paying duty of more than 1Cr respectively, for July 2016.
• Excise return in form ER-1 for NON SSI assessee for the month of July: 10/08/2016
• Return by EOU in the ER-2 form for the month of July-10/08/2016
• Public Servants Annual Assets Liabilities Return Filing due date extended to 31.12.2016
• 15-08-16 is the last date for Issue of TDS certificates in form 16A for quarter ended 30-6-16 by all deductors.

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