corporate and professional update dated march 1,2016

CORPORATE AND PROFESSIONAL UPDATE DATED MARCH 1,2016

Direct Tax

• TP: Turnover is a relevant factor to consider comparability. [CIT vs. Pentair Water India Pvt. Ltd (Bombay High Court)].
• A mere change in the head of income does not attract a concealment penalty. [CIT vs. Shri. Hiralal Doshi (Bombay High Court)].
• CBDT: CBDT has issued Clarification for the implementation of FATCA and CRS. An Inter-Governmental Agreement between India and USA was signed for the implementation of the Foreign Account Tax Compliance Act (FATCA). The Government of India has also joined the Multilateral Competent Authority Agreement (MCAA) for the Automatic Exchange of Information as per Common Reporting Standard (CRS).
• IT: TDS u/s 194A – Non-Deduction of TDS on payment of Hire Charge – The hire charges do not fall under the term interest as defined in section 2(28A) of the Act NOT liable for TDS u/s 194A – ITO, W-1(1), Kolkata Vs. Shahi Roadways Pvt. Ltd. (2016 (2) TMI 743 ITAT Kolkata)
• IT: Benefit of exemption u/s 11 and 12 – As the activities carried out by the Assessee certainly amounts to charitable purpose as it is being covered under the limb education to the definition of charitable purpose is contained in section 2(15) exemption allowed – ITO, W-IV, New Delhi Vs. J.D. Tytler School Society (2016 (2) TMI 735 ITAT Delhi)
• Section 154: AO cannot refuse rectification for mistakes attributed to the assessee. [ACIT vs Rupam Impex (ITAT Ahmedabad)].
• Section 12AA Deemed registration effective after 6 months from application. [CIT vs. Society for the Promo. Of Edn (Supreme Court)  Civil Appeal No. 1478 of 2016].
• Expenditure on the construction of the house of a laborer – revenue v/s capital expenditure – when the structure does not vest in the assessee and it has to pay monthly rent thereof to the Government the expenditure incurred by the assessee thereon has been rightly treated as a revenue expenditure- (The Commissioner of Income-tax, Vidarbha, Nagpur Versus M/s. Manganese Ore India Limited – 2016 (2) TMI 711 – BOMBAY HIGH COURT).
• Reopening of assessment – charging of share premium over and above the intrinsic value of the share is income which has escaped assessment – the share premium being on the capital amount cannot be subjected to tax as income- (Khubchandani Healthparks Pvt. Ltd. Versus Income-Tax Office 6 (3) (4) , Mumbai and Ors. – 2016 (2) TMI 710 – BOMBAY HIGH COURT)

Indirect Tax

• ST: Claim for refund of service tax alleged to have been collected contrary to law – Service tax was paid by the provider of construction of residential complex service – claim of refund by the joint owner / purchase of flat – refund allowed – Sumeet C Tholle & Pratima S Tholle Vs. CCE, Aurangabad (2016 (2) TMI 774 CESTAT Mumbai)

• Service charge, user charge, convenience fee paid by gateways & vendors on online or card payments will be waived once steps approved by the Cabinet.

• Quantum of Refund of service tax on services provided by commission agent located outside India – for export of goods – Revised rate of 10 of the FOB value (old rate 2 ) has retrospective effect- (M/s. Needle Industries (India) Pvt. Ltd. Versus Commissioner Of Central Excise, Salem- 2016 (2) TMI 771 – CESTAT CHENNAI)
• Refusal to give refund despite clear direction by the higher authority – it appears that the refund sanctioning authority took it on himself to sit in judgment on the higher appellate authority by issue of a fresh notice for rejection on the ground of limitation without applying his mind to the scope of his authority- (RITES Ltd. Versus Commissioner of Service Tax, Delhi- 2016 (2) TMI 726)

Company Law

• Query: We have a query as we have recently incorporated a Private company through Form INC-29 but while filing Form INC-29, we mentioned its name in CAPITAL LETTERS. Now Certificate of Incorporation which has been generated is also in CAPITAL LETTERS, while we want its name with only first letter of every word to be in Capital & rest all alphabets in small letters. Please suggest some solution.
• Answer: Certificate of Incorporation is issued with the same name which is mentioned in the Form while incorporating company. In case you have mentioned name of Company in CAPITAL LETTERS, so you cannot raise any question from the ROC for any mistake/error.

But now for the purpose of obtaining its name as only First alphabet in CAPITAL, rest all small letters. You are required to file Form INC-1 for reservation of name enclosing letter addressed to ROC with detailed issue & then file Form INC-24 with the ROC for changing the name of Company.

MCA Updates

• MCA has amended the Chartered Accountants Procedure of Meetings of Quality Review Board and Terms & Conditions of Service and Allowances of Chairperson and Members of the Board (Amendment) Rules, 2006. The new clause has been inserted to Rule 9(2) which provides that Chairperson and Members nominated by the CG to the Board, shall not undertake any foreign tour without the prior approval of CG Vide Notification No. 1/30/2015/PI dated 08.02.2016.

Other Updates

Rail  Budget 2016:

No hikes in fare; Sub-quota of 33% for women; increased quota of lower berths for senior citizens & women; enhanced capacity of eticketing system.

• NIRC: The constitution of NEW Executive Committee of NIRC is expected TODAY (26 FEB 2016).

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances; Hope the information will assist you in your Professional endeavors. For query or help, contact: singh@carajput.com or call at 9555555480