CORPORATE AND PROFESSIONAL UPDATE DATED MARCH 3, 2016

CORPORATE AND PROFESSIONAL UPDATE DATED MARCH 3, 2016

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INCOME TAX ACT

SECTION 92C

TRANSFER PRICING – COMPUTATION OF ARM’S LENGTH PRICE

Comparables and adjustments/Adjustments – Illustrations : Where business operation of assessee could not be carried on without services in question and same was to be outsourced and ostensible benefits were received from services rendered by AE, value of payments made to AE could not be taken as nil; consequent addition was to be deleted – [2016] 221 (Jaipur – Trib.)

Comparables and adjustments/Methods – General : Where in respect of international transactions entered into with AE, assessee was changing its stand with regard to application of most appropriate method from stage to stage, i.e., from TP study report to proceedings before Assessing Officer and DRP, matter was to be remanded back for disposal afresh – [2016] 234 (Pune – Trib.)

SECTION 115JB

MINIMUM ALTERNATE TAX

Computation of book profit : While computing book profit under section 115JB, Assessing Officer has no power to embark upon a fresh enquiry with regard to entries made in books of account of assessee-company; he has to rely upon authentic statements of accounts of company, being scrutinized and certified by statutory auditors – [2016]233 (Karnataka)

COMPANIES ACT

SECTION 397

OPPRESSION AND MISMANAGEMENT

Where pursuant to increase in their shareholding petitioners sought for reconstitution of board of directors but same was refused, petitioners were entitled to seek redressal under sections 397 & 398 against act of oppression and mismanagement – [2016]  219 (Bombay)

SEBI ACT

REGULATION 7 OF THE SEBI (SUBSTANTIAL ACQUISITION OF SHARES AND TAKEOVERS) REGULATIONS, 1997

ACQUISITION OF 5 PER CENT AND MORE SHARES OR VOTING RIGHTS OF A COMPANY

No penalty could be imposed on failure to make disclosure of ‘sale’ under regulation 7(1A) within two days –[2016]  224 (SAT – Mumbai)

CENTRAL EXCISE ACT

SECTION 9

OFFENCES AND PENALTIES – CENTRAL EXCISE

Where prima facie quantification of duty shows alleged evasion of duty of Rs. 10 crores, offence is cognizable and non-bailable; therefore, arrests can be made by Intelligence Officers of department – [2016]  226 (Jharkhand)

SECTION 21

ARRESTS – CENTRAL EXCISE

In case of arrested persons, only Superintendent and higher officers of Central Excise have power to send them to Magistrate as per sections 19 and 21; since Intelligence Officers have not been empowered in this behalf, judicial remand ordered at request of Intelligence Officers is void – [2016]  226 (Jharkhand

CST & VAT

SECTION 6A OF CENTRAL SALES TAX ACT 1956

BURDEN OF PROOF, ETC., IN CASE OF TRANSFER OF GOODS CLAIMED OTHERWISE THAN BY WAY OF SALE

Assessee was converting spent catalyst into support catalyst (‘goods’) for its customers. It received spent catalyst from various customers from outside and within the State of Maharashtra and after processing the same, support catalyst were returned back to the customers. The assessee claimed that it had charged only for job work done for the customers and goods were not sent back by way of sale –  261 (Bombay)

CENTRAL EXCISE RULES

RULE 173Q

PENALTY – GENERAL

In absence of any specific provision for levy of penalty under Automobile Cess Rules or under parent Act Industries (Development and Regulation) Act, 1951, no penalty can be levied for failure to pay automobile cess –[2016] 227 (Jharkhand)

STATUTES

DIRECT TAX LAWS

Section 10(46) of the Income-tax Act, 1961 – Exemptions – Statutory Body/Authority/Board/Commission – Notified Body or Authority – NOTIFICATION NO. SO 530(E) [NO.8/2016 (F.NO.196/32/2014-ITA-I)], DATED 19-2-2016

Section 80CCD of the Income-tax Act, 1961 – Deduction – Contribution to Pension Scheme of Central Government – Notified Pension Scheme – NOTIFICATION NO. SO 529(E) [NO.7/2016 (F.NO.173/394/2015-ITA-I)], DATED 19-2-2016

Section 10(15) of the Income-tax Act, 1961 – Exemptions – Interest on Bonds, Debentures, Securities, etc. – Notified Bonds or Debentures issued by public sector Companies under section 10(15)(iv)(h) – NOTIFICATION NO. SO 520(E) [NO.6/2016 (F.NO.178/1/2016-ITA-I)], DATED 18-2-2016

Income-Tax (Second Amendment) Rules, 2016 – Amendment in Rules 10THB, 10THC 10THD and Form No.3CEFB – NOTIFICATION NO.SO 502(E) [NO.5/2016 (F.NO.142/7/2014-TPL)], DATED 17-2-2016

CORPORATE LAWS

Insurance (Appeal to Securities Appellate Tribunal) Rules, 2016 – NOTIFICATION NO. GSR 179(E) [F.NO.12018/1/2015-INS.II], DATED 17-2-2016

Insurance (Procedure for Holding Inquiry by Adjudicating Officer) Rules, 2016 – NOTIFICATION NO. GSR 178(E) [F.NO.12018/1/2015-INS.II], DATED 17-2-2016

FEM (Transfer or Issue of Security by A Person Resident Outside India) (Second Amendment) Regulations, 2016 – Amendment in Regulations 2, 14, Schedule 1, Schedule 9 and Substitution of Schedule 11 –NOTIFICATION [NO.FEMA.362/2016-RB]/GSR 166(E), DATED 15-2-2016

FEM (Transfer or Issue of Security by A Person Resident Outside India) (Amendment) Regulations, 2016 – Amendment in Regulations 2, 5 and Substitution of Schedule 3 & Schedule 4 – NOTIFICATION [NO.FEMA.361/2016-RB]/GSR 165(E), DATED 15-2-2016

Section 46 of the Prevention of Money-Laundering Act, 2002 – Special Courts – Application of Cr. PC, 1973 to proceedings before Special Court – Appointment of Special Public ProsecutorS – NOTIFICATION NO. S.O. 506(E) [F.NO.C-18016/7/2015-AD.ED], DATED 17-2-2016

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