corporate and professional update dated march 28, 2016

CORPORATE AND PROFESSIONAL UPDATE DATED MARCH 28, 2016

DIRECT TAX

• Income Tax: Correction of statement cum challan relating to TDS on sale of property u/s 194IA – CPC-TDS has enabled functionality for online correction in form 26QB from 29/02/2016.
• Income Tax: TDS u/s 194I – whether the tour operators/travel agents were required to deduct TDS under Section 194-I of the Act while making payments to the hotels on behalf of foreign tourists? – Held Yes – HC
• Exemption u/s 13A – ITAT was justified in denying exemption to the INC under Section 13A of the Act and refusing to condone the delay that had occurred in the audit of some of the state units by holding that the ITAT was right in its conclusion that the INC failed to fulfil the three conditions envisaged under clauses (a), (b) and (c) of Section 13A of the Act – HC
• Income Tax: Exemption u/s 13A – As long as a political party continues to avail the exemption from payment of income tax, there can be no excuse for not maintaining its account whether it has one or more state units. – no valid reasons have been given by the ITAT for overturning the reasoned and detailed orders of the AO and CIT (A). – HC
• Income Tax: Entitlement to claim carry forward loss – delay in filing the return – when the petitioner as a litigant is entitled to claim carry forward loss, mere delay should not defeat the claim of the petitioner – CBDT should have condoned the delay of one day in filing the return by the petitioner.- HC
• Minimum Alter Tax (MAT) – Forfeiture of share warrants being a capital receipt – adjustment need to be made to the disclosures made in the notes on accounts forming part of the profit and loss account of the assessee and the profits arrived after such adjustment, should be considered for the purpose of computation of book profits u/s 115JB

INDIRECT TAX      

• Service Tax: Demand of Service tax at the rate of 6%/8% of the value of exempted goods – As per Sub-Rule (3A) of Rule 6(3), the Cenvat Credit required to be reversed is as per the formula prescribed. Here, as the appellant have reversed the entire credit availed on common input service, the demand of 6%/8% of the value of exempted goods is not sustainable.
• Service Tax: Cenvat credit – Appellant constructed various malls and rented the same to various parties and discharge of service tax on rent received. Also availed the Cenvat Credit of input services which are used for construction and maintenance of the various malls – credit allowed – Tri
• Central Excise: Validity of order against the dead person – once the factum of death of the sole proprietor has come to the knowledge of the learned Commissioner, the learned Commissioner should have dropped the proceedings rather than passing the impugned order.
• Customs: Classification – Used damaged cut rails for melting (melting scrap) – to be classified under CTH 72.04 denying benefit of exemption benefit under Notification No.12/2012 or under CTH 73.02 allowing benefit – the goods are to be classified under CTH 73.02 – exemption allowed.

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