CORPORATE AND PROFESSIONAL UPDATE DATED MARCH 18,2016

CORPORATE AND PROFESSIONAL UPDATE DATED MARCH 18,2016

DIRECT TAX

• Income Tax: Addition u/s 56(2)(viia) – deemed gift – Since the transaction of sale and purchase of shares is between related parties and both the companies are companies in which the public are not substantially interested, AO was justified in examining the applicability of the provisions of section 56(2)(viia) to the transaction of transfer of shares. – Tri
• Income Tax: Exemption u/s. 11 – helping aspiring members/members in preparing for CISA and CISM certification conducted by the parent body, ISACA, USA – assessee cannot be considered to be an “educational trust” within the meaning of section 2(15) – it is not entitled for exemption u/s. 11 and this income of the assessee is to be assessed as business income under the head AOP – Tri
• Income Tax: Challenge to the authority of ITO to issue notices u/s 148 – the petitioning assessee was precluded by Section 124(3)(b) from questioning the authority of the assessing officer who had issued the notices u/s 148 – HC
• Income Tax: Eligibility of deduction under section 80IB – unreasonable profits earned. – For making a comparative analysis, apples are to be compared with apples and not with oranges. – Tri
• Income Tax: Deduction u/s 80IC – the counsel for the assessee was of the bonafide belief that along with the claim of 80IC and 80I deduction, the Form 10CCB was not required since the accounts of the assessee are audited as per the statute. The assessee cannot be penalized for the bonafide mistake of the counsel – Tri

Read our articles:  Top Taxation Relaxation to MSMS

Highlights of International Taxation

INDIRECT TAX          

• Service Tax: Cenvat credit – Internet service, web-hosting service and content service is wholly attributable to the activity of rendering taxable output service. Thus, the demand attributable to these input services is set aside. – Tri
• Central Excise: Liability to pay duty on clearance of structural scrap – duty demand alleging suppression of facts – When there is no clearance of inputs or capital goods as such, question of reversal of CENVAT credit availed on such items does not arise – Tri
• Central Excise: 100% EOU – whether the benefit of Central Excise (Removal of goods at concessional rate of duty for manufacture of Excisable goods) Rules, 2001 is available to 100% EOU – Held Yes – Tri
• Central Excise: Ineligibility for the SSI benefit – determination of turnover – the amount which has been deducted from their account by the buyers for its delay in execution in contracts is not correct and the proposition needs to be rejected – Tri
• Customs: Levy of anti-dumping duty – Software downloaded electronically – Absence of mechanism to levy and collect duty – no duty can be levied and collected on software downloaded electronically – Tri
• Customs: Proper authority for issuing show cause notice – Whether DRI is or not – comparison with the price of such imports cannot cause any prejudice to the appellant because it can be nobody’s case that the price would be higher for imports of larger quantities of such goods. – Tri
• Customs: Classification – the classification has been determined on the basis of the length of the flock fibres being between 0.45 limited to 0.5 mm which was never contested and on the basis of the HSN Explanatory Notes on classification which are standard and internationally accepted for the purpose of determining the classification of goods. Thus, Revenue has discharged its burden of proof while determining the classification. – Tri
• Customs: Valuation – inclusion of royalty – Legality of Commissioner (Appeals) order – There was no discussions either on facts or on legal issues in his impugned order and also it had not examined in detail the agreements and amendment agreements but merely endorses the respondent’s view without any discussion – Tri
• Customs: Rejection of declared price – when the price of similar or identical goods are same price and it was accepted by the Customs in all major Custom Houses, there is no justification for taking recourse to Rule (8) of CVR and to adopt the price of Country of Exportation. – Tri
• Customs: Refund claim in terms of Section 27 of the Customs Act – Rejected being time barred – Anti-dumping duty paid on PVC film – limitation prescribed under Section 27 would not be applicable to the refund of excess anti-dumping duty paid in terms of the provisional notifications, which attained finality subsequently. – Tri

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