CORPORATE AND PROFESSIONAL UPDATE FEBRUARY 09, 2016

CORPORATE AND PROFESSIONAL UPDATE FEBRUARY 09, 2016

DIRECT TAX:

Exemption u/s 11& 12 : Merely because an institution, which otherwise is established for a charitable purpose, receives income that would not make it any less a charitable institution, denial of exemption should only be to the extent of income which was violative of section 13(1) (d) and not the total denial of exemption u/s. 11 – Tribunal. [Institute of Haematology vs ADIT (E) , Trust Circle-II, New Delhi – 2016 (2) TMI 380 – ITAT DELHI]

IT: Exemption u/s 11& 12 – Denial of exemption should only be to the extent of income which was violative of Section 13(1) (d) and not the total income – Institute of Haematology Vs. ADIT, Trust Circle-II, New Delhi (ITAT Delhi).

Penalty upheld as assessee citing financial hardship for non-payment of ST pleaded for ‘ignorance of tax’ as well [2016] 66 taxmann.com 114 (Gujarat) Raval Trading Company v. Commissioner of Service Tax

IT: Recording of satisfaction by Assessing Officer having jurisdiction over person searched to effect that money, bullion or jewellery etc, found from person searched belong to ‘other person’ is an essential and prerequisite condition for bestowing jurisdiction to Assessing Officer of ‘other person’ under section 153C [2016] 66 taxmann.com 107 (Delhi – Trib.)  Satkar Fincap Ltd. v. ACIT

Deemed dividend under sec. 2(22)(e) : Initially, the assessee has chosen to declare the deemed dividend in his hand, later come with different explanation at different levels , the additional income offered should be telescoped against the deemed addition made under sec. 2(22)(e) –  Tribunal.[M. Amareswara Rao, Hyderabad vs DCIT, Central Circle, Vijayawada – 2016 (2) TMI 379 – ITAT VISAKHAPATNAM]

Import of medical equipment: As per the technical definition “Gastro Intestinal Video Endoscope”, it is nothing but Gastroscope using video technology. The present equipment is based on wireless capsule and which covers not only throat but also entire gastro intestinal tract. Benefit of exemption allowed. –Tribunal. [Commissioner of Customs (Airport) Chennai vs Vishal Surgical Equipment Co. (P) Ltd. – 2016 (2) TMI 356 – CESTAT CHENNAI]

Director would be disqualified on attaining age of 70 yrs even if he is appointed before 1-4-2014 [2016] 66 taxmann.com 167 (Bombay) Sridhar Sundararajan v. Ultramarine & Pigments Limited

Procedure, Formats and Standards for ensuring secured transmission of electronic communication including scrutiny assessment u/s 143(3) – Circular – Dated 3-2-2016

Disallowance u/s 14A : no separate books of account are maintained for taxable income and exempt income, some expenditure on account of administrative expenses has to be disallowed on reasonable estimate basis – Tribunal.[M/s. Coated Fabrics Pvt. Ltd. vs ACIT,Circle-1 (1) , Pune – 2016 (2) TMI 373 – ITAT PUNE]

Deemed dividend under sec. 2(22)(e) – Initially the assessee has chosen to declare the deemed dividend in his hand later come with different explanation at different levels – additions confirmed-(M. Amareswara Rao, Hyderabad Versus DCIT, Central Circle, Vijayawada – 2016 (2) TMI 379 – ITAT VISAKHAPATNAM)

Exemption u/s 11& 12 – Merely because an institution which otherwise is established for a charitable purpose receives income that would not make it any less a charitable institution – denial of exemption should only be to the extent of income which was violative of Section 13(1) (d) and not the total denial of exemption u/s. 11- (Institute of Haematology Versus ADIT (E) , Trust Circle-II, New Delhi – 2016 (2) TMI 380 – ITAT DELHI)

INDIRECT TAX:

ST: Refund – unjust enrichment – the impugned amount was deducted by Revenue from the refunds of BHEL in terms of the powers u/s 87(d) of Finance Act 1994 and BHEL recovered the said amount from the appellant by deducting the same from the payments due to the appellant for providing security services – refund allowed – CCE&ST, Bhopal Vs. Central Industrial Security Force (CESTAT New Delhi)

CBEC: CBEC has amended Notification No.12/2013-ST, dt. 1 JUL 2013, now the SEZ Unit or the Developer shall be entitled to refund of the Swachh Bharat Cess paid on the specified services.

Admissibility of credit of service tax paid on input service used in the manufacture of exempted as well as dutiable goods, as the credit has been reversed before utilization, the demand of interest is unsustainable. –Tribunal. [M/s. Grasim Bhiwani Textiles Ltd. vs CCE, Rohtak – 2016 (2) TMI 361 – CESTAT NEW DELHI]

Transshipment of goods without charging duty: The fact that the goods cleared under transshipment permit are required for the intended purpose is clear from the facts that the essentiality certificate has been issued. Whether it is issued under Notification No. 17/2001 or 21/2002 is immaterial, benefit of notification cannot be denied – Tribunal. [M/s Frontier Aban Drilling (India) Ltd. vs Commissioner of Customs, Mumbai – 2016 (2) TMI 358 – CESTAT MUMBAI]

Demand of service tax – Activity of Erection of Tele-communication towers for BSNL – taxability prior to 01/6/2007 – certain basic facts like the actual supply of materials in the execution of contract to establish the composite nature of contract requires verification by the Original Commissioner of Central Excise, Lucknow Versus M/s KK Telecom, M/s Surya Construction, M/s Parijat Construction, M/s S.K. Construction And Vica-Versa – 2016 (2) TMI 331 – CESTAT ALLAHABAD

Condonation of delay in filing an appeal before Commissioner (Appeal) – writ petition – the law does not come to the aid of indolent tardy or lethargic litigant. The conduct of the petitioner would dissuade us from entertaining these petitions – (NICE CONSTRUCTION Versus UNION OF INDIA AND 2 – 2016 (2) TMI 255 – GUJARAT HIGH COURT)

Now Courier entities in Delhi to file quarterly return for delivering goods above Rs 10,000 under DVAT.

Excise & Customs : When net duty demand (after adjusting credit) was reduced to Nil, then, since there was no outstanding duty payable, question of payment of interest and penalty would not arise[2016] 66 taxmann.com 116 (Madras)  Vikash J. Shah v. Commissioner (appeals)

COMPANY LAW:

Query:  We are incorporating a Foreign Company. Do we need to apply for the DIN for directors of foreign company as well. Please guide.

Answer:  There is no need to apply and obtain DIN for directors of foreign company but the DSC of authorized representative is mandatory, which again is not required to be registered with the MCA Portal.

Query:  Kindly guide us regarding the registration of Part – I Company with the ROC.

Answer: In order to register Part I Company, you are required to file Form INC-1 for name availability. After approval of the same, applicant is required to file Form No. URC-1 (with all attachments) along with filing e forms INC-7, INC-22 and DIR-12 or e-forms INC-7 and DIR-12 as the case may be.

OTHER

ICAI: AASB revised Guidance Note on Reporting on Fraud under Section 143(12) of the Companies Act, 2013.

An ICAI: AASB released 2016 Guidance Note on Audit of Banks.

ICAI: The Council elects CA M. Devaraja Reddy (Hyderabad) as President and CA Nilesh S. Vikamsey(Mumbai) as Vice President of ICAI for 2016-17.

KEY DATES:

Deposit of DVAT TDS for Jan: 15.02.2016

Issue of Quarterly TDS certificates for Dec Quarter by Govt Deductors: 15.02.2016

E-payment of PF for Jan (No grace of 5days): 15.02.2016

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