CORPORATE AND PROFESSIONAL UPDATE DECEMBER 11, 2015

 

CORPORATE AND PROFESSIONAL UPDATE DECEMBER 11, 2015

INCOME TAX ACT

SECTION 2(47)

CAPITAL GAINS – TRANSFER

Immovable property : Where assessee was directed to handover possession of its property to revenue, in absence of written contract between assessee and State regarding quantification of consideration to be paid by assessee it could not be held that there was a transfer in terms of section 2(47)(v) – [2015] 64  12 (Hyderabad – Trib.)

SECTION 9

INCOME – DEEMED TO ACCRUE OR ARISE IN INDIA

Business Profit/Commission: Assessee was not liable to deduct tax at source when non-resident selling agents provided services outside India on payment of commission – [2015] 64  18 (Chennai – Trib.)

SECTION 12A

CHARITABLE OR RELIGIOUS TRUST – REGISTRATION OF

Cancellation of : SLP granted against High Court’s order wherein it was held that merely because receipts from commercial activities of assessee-trust were more when compared to overall receipts from charitable activities, registration of assessee-trust could not be cancelled – [2015] 63  325 (SC)

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Highlights of International Taxation

SECTION 37(1)

BUSINESS EXPENDITURE – ALLOWABILITY OF

Interest expenditure : Merely because there was some cash balance in hands of assessee, Assessing Officer could not disallow interest on belated payment of purchases made by assessee – [2015] 63  370 (Ahmedabad – Trib.)

 

SECTION 80HHC

DEDUCTION – EXPORTERS

Reassessment : SLP granted against High Court’s ruling that where reassessment made in view of retrospective amendment of section 80HHC(3) was accepted by assessee and had attained finality, same could not be challenged in view of a later judgment holding such amendment arbitrary to extent of its retrospectively – [2015] 63  328 (SC)

SECTION 145

METHOD OF ACCOUNTING – ESTIMATION OF INCOME

Gross profit rate : Unless defect is pointed out in books of assessee, no addition could be made by Assessing Officer – [2015] 63  370 (Ahmedabad – Trib.)

SECTION 194J

DEDUCTION OF TAX AT SOURCE – FEE FOR TECHNICAL OR PROFESSIONAL SERVICES

Payments to doctors : Where assessee, running a hospital, availed services of some doctors, since there did not exist employer-employee relationship between parties, assessee was justified in deducting tax at source under section 194J while making payments of professional fee to doctors – [2015] 63  362 (Punjab & Haryana)

SECTION 253

APPELLATE TRIBUNAL – APPEALS TO

The Tribunal can exercise its discretion to accept the memorandum of appeal even if same is deficient in enclosures but not when appeal is not accompanied by fee – [2015] 64  95 (Hyderabad – Trib.)

COMPANIES ACT

SECTION 25

CHARITABLE COMPANIES

Delhi HC orders 5 Top Office-bearers of Congress Party to face criminal proceedings for forming and misusing a section 25 company as SPV for clandestine acquisition of 99% stake in Old defunct real-estate rich newspaper publication company (AJL) and for misappropriating funds of Congress Party for the purpose – [2015] 64 117 (Delhi)

SECTION 186

MEETINGS AND PROCEEDINGS – POWER OF TRIBUNAL TO ORDER MEETING TO BE CALLED

A civil suit filed against removal of directors was maintainable when proceedings before CLB were not maintainable as appellants lacked voting rights – [2015] 64  116 (Gujarat)

MRTP ACT

SECTION 2(o)

RESTRICTIVE TRADE PRACTICE

Where no evidence had been produced by complainant to show that its production of 3-wheelers was halted on account of non-production and non-supply of parts, viz. power packs by respondent manufacturer, compensation could not be awarded alleging unfair trade practice – [2015] 63  371 (CAT – New Delhi)

SECTION 36A

PROHIBITION OF ABUSE OF DOMINANT POSITION –DEFINITION OF

Where respondents had not made any misrepresentation about quality and suitability of their product or otherwise induced complainant to purchase their product, they could not be held to be guilty of unfair trade practice under section 36A – [2015] 63  371 (CAT – New Delhi)

SECTION 36B

PROHIBITION OF ABUSE OF DOMINANT POSITION

Complaint made by a person who is not a consumer or a trade association cannot be made basis for making an inquiry under section 36B – [2015] 63  371 (CAT – New Delhi)

PREVENTION OF MONEY LAUNDERING ACT, 2002

SECTION 5

ATTACHMENT OF PROPERTY INVOLVED IN MONEY LAUNDERING

There is no restriction in respect of person in possession of proceeds of crime. Section 5 of Money Laundering Act does not restrict that property in hands of persons involved in Money Laundering alone can be attached pending confiscation. Thus, provisional attachment of property is not restricted in hands of accused persons alone – [2015] 64  96 (Madras)

SERVICE TAX

SECTION 65(68)

TAXABLE SERVICES – MANPOWER RECRUITMENT OR SUPPLY AGENCY’S SERVICES

Where assessee had leased its factory under compromise scheme, then, sums received from lessee towards reimbursement of salary payable to employees working in factory, could not be regarded as ‘manpower supply services’ to lessee and was, therefore, not liable to service tax – [2015] 63  358 (Mumbai – CESTAT)

CENTRAL EXCISE ACT

SECTION 35F

APPEALS – DEPOSIT OF CERTAIN PERCENTAGE OF DUTY/TAX DEMANDED OR PENALTY IMPOSED BEFORE FILING APPEAL

Where department has challenged validity of utilization of credit balance for payment of duty, 7.5 per cent pre-deposit as a condition for filing appeal has to be made separately and ‘disputed utilization’ of credit cannot be regarded as sufficient pre-deposit for purpose of section 35F – [2015] 64  7 (Mumbai – CESTAT)

CUSTOMS ACT

SECTION 14

VALUATION OF IMPORTED GOODS – TRANSACTION VALUE – IDENTICAL/SIMILAR GOODS

Where revenue had submitted that goods in Chart D were identical to goods in Charts A and B and taken value of goods in Charts A and B as basis for valuation, Tribunal was right in remanding matter back for verification whether goods in Chart D were identical to goods in Charts A and B – [2015] 63  357 (SC)

CENVAT CREDIT RULES

RULE 2(k)

CENVAT CREDIT – INPUT

Since CENVAT Scheme is a beneficial legislation, ‘input’ should be given widest meaning to cover ‘anything put into stream of manufacture’; therefore, inputs used for manufacture of capital goods viz. ‘moulds’ are eligible for credit – [2015] 63  360 (New Delhi – CESTAT)

RULE 2(l)

CENVAT CREDIT – INPUT SERVICE

Where assessee-broker had passed-on brokerage to sub-brokers at rates higher than rate earned by itself and even goods involved were not tallied, sub-broker’s services could not be regarded as ‘input services’. – [2015] 63 355 (New Delhi – CESTAT)

STATUTES

DIRECT TAX LAWS

Section 119 of the Income-tax Act, 1961 – Income-tax Authorities – Instructions to Subordinate Authorities – Extension of due date for deposit of Tax Deducted at Source and Tax Collected at Source for State of Tamil Nadu – PRESS RELEASE, DATED 7-12-2015)

CORPORATE LAWS

Discussion Paper on Convergence to Ind-AS in Insurance Sector – PRESS RELEASE, DATED 7-12-2015

Guidelines on insurance claims for losses due to flood in State of Tamil Nadu, Puducherry and Neighboring Districts of Andhra Pradesh – CIRCULAR NO.IRDA/NL/RI/MISC/15-16/37, DATED 7-12-2015

INDIRECT TAX LAWS (ST./EX./CUS. & (CST & VAT)

Jurisdictions of Principal Chief Commissioner, Chief Commissioner, Principal Commissioner and Commissioner – Amendment in Notification No.27/2014-C.E. (N.T.), Dated 16-9-2014 – NOTIFICATION NO.24/2015-C.E. (N.T.), DATED 7-12-2015

Extension of date for filing of Central Excise Return and payment of Central Excise duty and Service tax – PRESS RELEASE, DATED 5-12-2015

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