corporate and professional update dated march 26, 2016

CORPORATE AND PROFESSIONAL UPDATE DATED MARCH 26, 2016

DIRECT TAX

• Income Tax: Penalty u/s 271E – Company has directly repaid the loan taken from Director to Bank – violation of section 269T – The assessee has demonstrated that under the compulsion the payment was directly credited in the bank account of the Director. Strictly it was not paid in cash – No penalty.
• Income Tax: Noncollection of TCS (tax collection at source) – main husk is a by-product and the same cannot be considered as scrap and waste as provided in the Explanation to Section 206C of the Income-tax Act.
• Income Tax: Noncollection of TCS (tax collection at source) – DOC is a by-product and it certainly cannot be categorized as scrap and waste and it has its own market value – AO has erred in categorizing DOC as scrap within the meaning of Explanation to Section 206C

INDIRECT TAX          

• Cenvat credit – service tax paid by the sub-broker – there is no evidence to elevate such suspicion to a level to come to an inference that the higher commission (than the commission received by the appellant) was paid to sub-brokers in respect of goods other than the goods for which it received a commission from its clients – credit allowed- (M/s N.R. Wires Pvt. Ltd. Versus Commissioner of Central Excise, Raipur – 2016 (3) TMI 714 – CESTAT NEW DELHI).
• CENVAT Credit – eligibility of input services – By denying credit on all the input services it seems to appear that the appellants have not availed any input service for providing output service during the relevant period which is not possible- (M/s Conexant Systems Pvt Ltd, Hyderabad Versus Commissioner of Central Excise And Service Tax, Hyderabad-II – 2016 (3) TMI 713 – CESTAT HYDERABAD).
• Service Tax: Liability of Service tax on TDS amount absorbed by the assessee on foreign remittance – Reverse charge – Service Tax liability needs to be discharged on amounts which have been billed by the service provider – Demand set aside.
• Service Tax: Sharing of resources and cost/expenses with the group companies – The activities carried out by the Appellant enables the Participating Group Companies to share the common services, the best available talent, and resources required for carrying out their business activities. No taxable service is provided by the appellant – No service tax liability.

DATES

• Company e-forms revised on MCA portal w.e.f. 03.2016. Download the latest version of forms from the company forms download page on the MCA portal.

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