CORPORATE AND PROFESSIONAL UPDATE FEBRUARY 22, 2016

CORPORATE AND PROFESSIONAL UPDATE FEBRUARY 22, 2016

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DIRECT TAX

  • The petitioner is admittedly not a foreign Company. – Since the petitioner is not an eligible assessee in terms of Section 144C(15)(b) no draft order can be passed in the case of the petitioner u/s 144C(1) –( Honda Cars India Limited (Formerly – M/s. Honda Siel Cars India Limited Versus Deputy Comm. of Income Tax & Another – 2016 (2) TMI 527 – DELHI HIGH COURT)
  • Addition under Section 41(1) – The loan transactions were on the capital account and the writing off the loan was also on capital account and did not find place in the Profit and Loss Account – Thus the cessation of the liability by itself would not lead to the attraction of Section 41(1)- (Principal Commissioner of Income Tax-09 Versus M/s. Tinna Finex Ltd. – 2016 (2) TMI 526 – DELHI HIGH COURT)

INDIRECT TAX

  • Seeks to further amend notification No. 12/2012-Customs, dated 17.03.2012- (click here to view)
  • Classification of services – providing services relating to transportation of light Commercial Motor Vehicles & Multi Utility Vehicle manufactured by M/s Force Motors Ltd. by way of getting them driven by skilled drivers – None of the limbs of BAS covers the impunged activity – Taxable under BSS w.e.f. 1.5.2006- (Capital Transport Convoy Contractor Versus Commissioner of Central Excise And Service Tax, Indore – 2016 (2) TMI 546 – CESTAT NEW DELHI)

COMPANY LAW

Query:Sub-section 6 of the Section 149 of Companies Act 2013 provides for meaning of independent Director and clause (c) & (d) of sub-section 6 of section 149 of Co. Act, 2013 provides that Independent Director or his relatives has or had no pecuniary relationship or transaction with Company, its holding, subsidiary or associate company etc. Please explain the meaning of “Pecuniary Relationship” and “materiality” in this regard.

Answer:Ministry of Corporate Affairs has in its Report of Expert Committee on Management and Board Governance has explained that the term material pecuniary relationship should also be clearly defined for the purpose of determining whether the director is independent or not. The concept of “Materiality’ is relevant from the recipient’s point of view and not from that of the company. The term ‘material’ needs to be defined in terms of percentage. In view of the Committee, 10% or more of recipient’s consolidated gross revenue / receipts for the preceding year should form a material condition affecting independence. For determining materiality of pecuniary relationship, transactions with an entity in which the director or his relatives hold more than 2% shareholding, should also be considered.

MCA UPDATES

  • MCA has recently invited comments on the draft companies (Incorporation) Second Amendment Rules, 2016
  • MCA has recently invited comments on the draft companies (authorised to registered) amendment rules 2016

KEY DATES

E-payment of DVAT & CST tax for Jan: 21.02.2016

Payment of ESI of Jan: 21.02.2016

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