CORPORATE AND PROFESSIONAL UPDATE DATED MARCH 19,2016

CORPORATE AND PROFESSIONAL UPDATE  DATED MARCH 19,2016

DIRECT TAX

• INCOME TAX: CBDT directs reopening assessments in claim of bogus capital gains / loss in penny investment scam by taxpayers vide letter dated 16.03.2016
• An INCOME TAX: TDS-Credit of TDS won’t be denied to a contractor even if entire work has been sub-contracted to others [2016] 67 224 (Andhra Pradesh)
• INCOME TAX: CHARITABLE PURPOSE : Where assessee-trust conducted courses and seminars to help its members in preparation of a foreign certification course, assessee’s activity was not of education but of advancement of any other object of general public utility and involved trade, commerce or business, hence, not entitled for exemption under section 11 – [2016] 67 Taxmann 140 (Chennai – Trib.)
• INCOME TAX: CAPITAL GAIN-TRANSFER : Where under Joint Development Agreement, builder would get 47 per cent and landowner 53 per cent of built up area and during current year landowner handed over entire land to developer, though sale deed was executed in next year, in current year itself there was transfer of capital assets for consideration being cost of 53 per cent of built up area – [2016] 67  147 (Bangalore – Trib.)

INDIRECT TAX

• SERVICE TAX : Helping vehicle-buyers to avail registration with RTO under Motor Vehicle Act does not amount to Business Auxiliary or Business Support Services; hence, differential amount earned over and above actual RTO registration fees cannot be charged to service tax
• SERVICE TAX : Where assessee entered into system delivery agreement with a customer to provide for a system comprising of a complete set of various machines/equipments which were required to be installed and commissioned at site of customer and overall operation and maintenance processes shall be responsibility of customer, transaction qualified as a transfer of right to use goods and, consequently, be outside definition of service – [2016] 67 142 (AAR – New Delhi)
• CENTRAL EXCISE : As per rule 7(4) of Central Excise Rules, 2002, interest is payable only when any amount is payable consequent to order of finalization of provisional assessment.
• Hence, where duty is paid prior to finalization of assessment and no amount is payable consequent to finalization, interest under rule 7(4) ibid would not be attracted – [2016] 67  150 (Chennai – CESTAT).

OTHER UPDATES

• COMPETITION ACT : Identical price quoted by respondent manufacturers for supply of AMDBS, a critical safety item required for railway coaches, did not constitute sufficient evidence of cartel formation and in absence of other plus-factors, it was not possible to record a finding that respondents had acted in violation of section 3(3)(d), read with section 3(1) – [2016] 67 146 (CAT – New Delhi)

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