CORPORATE & OTHER LAWS UPDATE DECEMBER 4, 2015

CORPORATE AND PROFESSIONAL UPDATE DECEMBER 4, 2015

DIRECT TAXES:

TDS credit – vendor deposited the TDS with the PAN of the assessee wrongly instead of its sister concern – Assessee did not offer any income corresponding to TDS – credit allowed – HC – (Commissioner of Income Tax-15 Versus M/s Relcom, DELHI HIGH COURT).

Commission for issuing the DDs and POs – CIT deleted the additions made in the hands of the Assessee only on the ground that in Ravinder Yadav s hand they have already been taxed – Revenue has not merit in the case appeal dismissed- (PR. COMMISSIONER OF INCOME TAX-6 Versus M/s NORTHERN STRIPS LTD., DELHI HIGH COURT).

Addition u/s 68 – no addition can be made in the hands of the Assessee under Section 68 of the Act and it will be open to the Revenue to move against the share applicants in accordance with law- (COMMISSIONER OF INCOME TAX-9 ERSTWHILE CIT-VI Versus VRINDAVAN FARMS (P) LTD., DELHI HIGH COURT).

Addition made u/s 14A r.w. 115JB – MAT computation – AO has rightly disallowed the expenditure of Rs. 7307018/- by invoking the provisions of Section 14A read with Rule 8D of Income Tax Rules 1962 for computing book profit u/s 115JB(2) read with clause (f) to explanation 1 to clause 115JB(2)– (DCIT, Central Circle-18 & 19, Mumbai Versus Viraj Profiles Limited., ITAT MUMBAI)

INDIRECT TAXES:

Works contract service – Composition Scheme being optional having opted for it appellant has no locus standi to revert back to work out the gross value charged for the services rendered- (Sunraj Construction Versus Commissioner of Central Excise & Customs, Mumbai, CESTAT MUMBAI).

Denial of a refund of the interest recovered by the revenue – demand of interest is not sustainable. Consequently the interest recovered from the appellant is to be refunded. – no show cause notice has been issued to the appellant. Therefore adjustment of demand of interest is not permissible- (M/s Goyal Tobacco Co. Pvt. Ltd. Versus C.C.E. & S.T. Jaipur-I, CESTAT NEW DELHI).

Denial of CENVAT Credit – invalid documents – covering letter vide which monthly returns were filed with the authorities indicated copies of RG23A part I and II as enclosures – the invocation of the extended period for demanding the Cenvat credit as being suppressed is incorrect- (M/s Gupta Soaps Versus Commissioner of Central Excise, Mumbai-I, CESTAT MUMBAI).

Refund due of revision in price escalation clause – refund claim was filed within one year from the issuance of credit notes – refund allowed- (CCE, Aurangabad Versus Goodyear South Asia Tyres Pvt. Ltd. And Vice-Versa, CESTAT MUMBAI).

ICAI Members/Firms to furnish PAN details:

Decision taken by council following advice received from Income Tax Department. Members required to deposit self attested copy of PAN CARD to concerned regional office on or before 15 December 2015.

Government may bring change in rate of corporate tax:

It has been known from the sources that Govt. may bring corporate tax rate down from 30% to 25%.

FAQ ON COMPANY LAW:

Query: If any Private Limited Company has taken unsecured loan from its director and their relatives during 2014-15 then how this will be reported in Audit report, Director report and notes to accounts.

Answer: As per Companies Act 2013, Companies are allowed to take loan from directors but are not allowed to take loan from the relatives of directors, during the F.Y 2014-15.

Therefore, loan taken by Companies from the relatives of director(s) is required to be qualified by the Auditor in his Auditor’s Report and the Board is required to answer the qualified opinion of Auditor in Director’s Report or Board Report.

Query: I got appointed as statutory auditor in a Private Limited Company on 25th August 2015. Previous auditor has given NOC but till now I have not filed Form ADT-1 and other ROC filing due to confusion in filing Form ADT-1. Like whether I have to attach Form ADT-3 also or not, whether I have to file 2 Form ADT-1 i.e. For the period upto this 30th Sept (date of AGM) and next for 5 years i.e. upto 30th Sept 2020. Please advise me.

Answer: Previous Auditor of the Company is required to file Form ADT-3 attaching the copy of his Resignation letter addressed to the Company. And you are required to file Form ADT-1 regarding your appointment as Statutory Auditor of Company from the date of appointment for next five financial years (including current financial year).

MCA News:

Version of Form 3 LLP is likely to be modified w.e.f 24th Nov 2015 between 09:00PM to 10:00 PM. Stakeholders are requested to plan accordingly.

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