CORPORATE AND PROFESSIONAL UPDATE JANUARY 9, 2016

CORPORATE AND PROFESSIONAL UPDATE JANUARY 9, 2016

INCOME TAX ACT

SECTION 9

INCOME – DEEMED TO ACCRUE OR ARISE IN INDIA

Fee for technical services : Where in earlier years, consideration received by assessee Swede company for supply of telecom equipments as not taxable, while in current year Tribunal had recorded that Commissioner (Appeals)’s order was bad as he did not confront assessee with new material gathered during survey, Tribunal ought to have remanded matter back to Commissioner (Appeals) for readjudication of facts; it should not have itself appreciated facts.

Read our articles:  Top Taxation Relaxation to MSMS

Highlights of International Taxation

SECTION 10B

EXPORT ORIENTED UNDERTAKING

Computation of exemption : Where sale price of export was credited to bank account as per existing exchange rate, foreign exchange gain/loss subsequent to receipt of sale proceed was not eligible for exemption under section 10B.

Computation of : Where an amount from a foreign customer was not received into India and said amount was adjusted for purchase of an item from said foreign party, impugned amount was liable to be excluded from export turnover for purpose of computation of exemption under section 10B.

SECTION 37(1)

BUSINESS EXPENDITURE – ALLOWABILITY OF FILM PRODUCTION

Where assessee acquired rights for exhibition of films on minimum guarantee basis which did not complete commercial run of 180 days during preceding financial year, in terms of Explanation to sub-rule (1) of rule 9B, minimum guarantee amount excluding expenditure incurred on preparation of positive prints and expenditure incurred in connection with advertisement of films, was to be considered to be cost of acquisition of distribution rights of films which could be carried forward for amortization.

SECTION 40A (3)

BUSINESS DISALLOWANCE – CASH PAYMENTS EXCEEDING PRESCRIBED LIMITS

Business exigencies : Where assessee made cash payments to film producers in excess of Rs. ten thousand, in view of fact that said payments were made due to business exigencies and, moreover, genuineness of same was never disputed, impugned disallowance made under section 40A(3) was to be deleted.

SECTION 80-IC

DEDUCTIONS – SPECIAL PROVISIONS IN RESPECT OF CERTAIN UNDERTAKINGS OR ENTERPRISES IN CERTAIN SPECIAL CATEGORY STATES

Interest : Where assessee, a manufacturer of shampoo products, received interest on fixed deposits with bank under section 80-IC on amount of interest, Assessing Officer should examine nature of interest and decide issue of granting section 80-IC deduction.

Where assessee after using material, had sold packing materials/scrap and aggregate amount of scrap sale was credited to profit and loss account (thereby reducing cost of material), amount derived by sale of scrap was eligible for deduction under section 80-IC.

SECTION 145

METHOD OF ACCOUNTING – ESTIMATION OF INCOME

Work in progress : Where Commissioner came to conclusion that assessee incurred work in progress expenditure of Rs. 47.59 crores and raised a bill of Rs. 48.06 crores and difference between two was profit, whereas assessee submitted that amount of Rs. 48.06 crores was bill amount raised by customers, Commissioner proceeded on misunderstood facts and accordingly revision order could not be sustained.

COMPETITION ACT

SECTION 3

PROHIBITION OF AGREEMENTS – ANTI-COMPETITIVE AGREEMENTS

Where OP was limiting and controlling services of dumpers inside prohibited area of Paradip Port denying said services to informant and other stevedores, act of OP was anti-competitive.

SECTION 4

PROHIBITION OF ABUSE OF DOMINANT POSITION

Where OP was a facilitator between licensed stevedores and owners of dumpers for handling of cargo, it would not be an enterprise and its conduct could not be examined in respect of abuse of dominant position.

CENVAT CREDIT RULES

RULE 2 (l)

CENVAT CREDIT – INPUT SERVICE

Exporter is eligible to take credit of ‘banking and other financial services’ used in connection with their export activities of finished excisable goods.

STATUTES

CORPORATE LAWS

SEBI (Delisting of Equity Shares) (Amendment) Regulations, 2016 – Amendment in Regulation 27 –NOTIFICATION NO.SEBI/LAD-NRO/GN/2015-16/30, DATED 12-1-2016

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

General Guidelines for Implementation of E-Payment of Refund/Rebate – CIRCULAR NO.1013/1/2016-CX, DATED 12-1-2016

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