CORPORATE & PROFESSIONAL UPDATE MARCH 2017

Professional Update For the Day:

DIRECT TAX

• CBDT clarified that the Existence of undisclosed bank deposits is non-mandatory on the date of PMGKY payment.
• CBDT has asked Taxmen to Fast track cases against shell firms also to file prosecution cases against those companies which claimed bogus long-term capital gains.

While the SFIO has filed cases against 49 shell companies, Rs 3,900 crore is believed to have been laundered by 559 persons with the help of 54 professionals. Also, Rs 1,238 crore cash has been deposited in shell co’s, post demonetization.

• Penalty can’t be imposed u/s 271(1)(c) of the Income Tax Act, 1961, where the substantial question of law had been admitted by the High Court in respect of quantum proceedings. CIT Vs. Advaita Estate Dev. Pvt. Ltd., High Court of Bombay.
• ITAT Ahmedabad held that forfeiture of share application money which has been duly received by the appellant in terms of prospect and credited to capital reserve account was a capital receipt and is not taxable. DCIT(OSD) Vs Mahalaxmi Rubtech Ltd. (ITAT Ahmedabad).
• Sec. 271(1)(c): If the quantum appeal is admitted by the High Court, it means that the issue is debatable and the penalty cannot be levied. The argument of the Dept that Nayan Builders 368 ITR 722 (Bom) does not lay down this proposition is not correct. CIT Vs Advaita Estate Development Pvt. Ltd (Bombay High Court)
• Entitlement for deduction U/s 80IB – amount under the head VKGUY [Vishesh Krishi Gram Udhyog Yojana]

and on account of DEPB – these benefits do not form part of the net profits of eligible industrial undertaking for the purposes of Sections 80I/80IA/80IB – ITAT Jaipur in case of [M/s Neel Kanth Gum & Chemicals Vs. ACIT].

• New India Assurance to refund TDS amount to the claimant as it had wrongly deducted TDS on compensation: HC[2017] 79 taxmann.com 76 (Gujarat)
• Expenditure incurred for re-possession of the club – capital or revenue in nature – when as per the JDA, the ownership is vested in the assessee and the plot owners have no right in the assets of the club, it cannot be said that creating the asset of the club is a revenue expenditure – ITAT Bangalore in case of [G.R. Developers Vs. The ACIT, Bangalore].
• Operation Clean Money; Income Tax Department identifies 17.92 Lakh persons whose tax profiles were not in line with the cash deposits made by them during the demonetization period.
• CBDT reported the direct tax collections up to February 2017 to witness a steady growth trend. The collection net of refunds stands at Rs. 6.17 lakh crore which is 10.7% more.
• For more reading;
  • Virtual Office Facility in India

INDIRECT TAX

• Excise: CBEC issued Master Circular providing the clarity and uniformity on the issues dealing with Show Cause Notice, Adjudication Proceedings and Recovery of duty vide Circular No. 1053/02/2017-CX dated March 10, 2017. CESTAT allows assessee’s appeal, remands issue for a determination whether Food Processor accessories are assessable at MRP u/s 4A or at the transaction value u/s 4 of Central Excise Act, when same not cleared as part of a package containing Food Processor [TS-47-CESTAT-2017-EXC]
• Service Tax: In the absence of a statutory provision that prescribes that registration is mandatory and that if such a registration is not made the assessee is not entitled to the benefit of refund, the committed a serious error in rejecting the claim for refund on the ground which does not exist in law. Commissioner, Service Tax Vs M/S Pangea 3 Legal Database Systems Pvt. Ltd. (Allahabad High Court)
• The date of filing of DVAT Return in Form 16, 17 & 48 for Q-3, 2016-17 has been extended up to 17.03.2017 vide Circular No. 26 dated 08.03.2017.
• CBEC vide Circular No. 1053/02/2017 March 10, 2017, has issued the Master Circular providing the clarity and uniformity on the issues dealing with Show Cause Notice, Adjudication Proceedings, and Recovery of duty.
• In the absence of a statutory provision that prescribes that registration is mandatory and that if such a registration is not made the assessee is not entitled to the benefit of refund, the committed a serious error in rejecting the claim for refund on the ground which does not exist in law.Commissioner, Service Tax Vs M/S Pangea 3 Legal Database Systems Pvt. Ltd. (Allahabad High Court)
• CESTAT allows assessee’s appeal, remands issue for a determination whether Food Processor accessories are assessable at MRP u/s 4A or at the transaction value u/s 4 of Central Excise Act when same not cleared as part of a package containing Food Processor [TS-47-CESTAT-2017-EXC]

Read more about: What is core Business Activity GST

Read more about: All about GST Offenses, Penalties, and Appeals

OTHER UPDATES

• RBI has canceled the certificate of registration of some NBFC in of the powers conferred on it under Section 45-IA (6) of the Reserve Bank of India Act, 1934.
• RBI issued a notification that Sec 269SS & 269T of the Income Tax Act, 1961 would be applicable to all NBFCs with immediate effect. Currently, the relevant threshold is Rs 20,000 Vide Notification No. DNBR (PD) CC.No.086/03.10.001/2016-17 dated 09.03.2017.
• RBI notified the FEMA (Transfer or Issue of Security by a Person Resident outside India) (Fourth Amendment) Regulations, 2017 which shall come into force from the date of their publication in the Official Gazette. Vide Notification No. FEMA.387/2017-RB dated 09.03.2017.

Key Dates:

Payment of Advance Income Tax by all assesses (100%): 15.03.2017

E-payment of PF for Feb: 15.03.2017

“Our hopes & dreams should be like hair & nail. No matter how many times they are cut, but they never stop growing.”

Life shrinks or expands in proportion to one’s courage.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances;

Hope the information will assist you in your Professional endeavors. For query or help, contact: singh@carajput.com or call at  9555555480

We look forward to your valuable comments. www.carajput.com

For more reading: Factors to be considered while choosing a Accountants