CORPORATE AND PROFESSIONAL UPDATE MAY 2, 2016

Professional Update For the Day: 

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DIRECT TAX:

Disallowance of the deduction claimed u/s 54 – two flats situated on different storey – Held that:- There is nothing in these sections, which require the residential house to be constructed in a particular manner. The only requirement is that it should be for the residential use and not for commercial use.We do not think that the fact that the residential house consists of several independent units can be permitted to act as an impediment to the allowance of the deduction under section 54/54F.(Surendra Sharma Versus Income Tax Officer, Ward 6 (3) , Jaipur).- 2016 (4) TMI 1098 – ITAT JAIPUR

IT: Period of Limitation for passing the Block Assessment Order – benefit of exclusion of the period during which there was a stay order against the order of special audit is available to Revenue – VLS Finance Ltd. & Anr Vs. CIT & Anr – 2016 (4) TMI 1133 – Supreme Court

Society having 2 PAN cards asks to surrender duplicate one[2016] 68 taxmann.com 297 (Delhi) Sri Ram Chandra Mission v. Commissioner of Income-tax

IT: Assessment against non-existing companies to be held as void ab initio – Orbit Corporation Ltd. Vs. DCIT, Central Circle-47, Mumbai – 2016 (4) TMI 1130 – ITAT Mumbai

Disallowance of interest paid by the appellant to the bank as well as to the other parties – Held that – The assessee was able to establish that he had incurred the expenditure wholly and exclusively for the purpose of business and therefore there is no justification for the revenue to disallowance the interest component. The revenue cannot claim to put itself in the armchair of the businessman and decide how much is reasonable expenditure. (M/s. Lakhani Shoe Co. Pvt. Ltd. Versus The ACIT, Circle-2, Alwar)-  2016 (4) TMI 1127 – ITAT JAIPUR

A transaction couldn’t be deemed as transaction of agency just because word ‘agency’ was written in agreement
IT : Where assessee-logistic company did not deduct TDS on payment made to overseas organizations for availing their logistic services, since transaction was on principal to principal basis and merely word ‘agency’ was used in agreement did not mean that there existed relationship of agency, TDS was not required to be deducted[2016] 68 taxmann.com 384 (Kolkata – Trib.) Balmer Lawrie & Co. Ltd. v. Income-tax Officer

Transactions having contingent impact on profit/ losses are not international transactions. [ Siro Clinpharm Pvt. ltd. vs. DCIT (ITAT Mumbai)].

CBDT notifies new form 35 for e-filing of appeal with CIT (A). IT notification no. 11/2016.

INDIRECT TAX:

In terms of the provisions authorization has to be specifically from the foreign service provider and cannot be fastened upon the Indian Service recipient by the Revenue – In absence of such authorization no liability would fall upon appellant.(Escorts Ltd. Versus CCE, Jaipur And Vice-Versa)- 2016 (4) TMI 1077 – CESTAT NEW DELHI

Seeking cross-examination of certain witnesses – Petitioner submitted that show cause notice is based on several statements of witnesses including those of the experts and any reliance on such statements without offering such witnesses for cross examination would be opposed to the principles of natural justice. Held that:- the reasons cited by the adjudicating authority are completely baseless. Merely because, the concerned witnesses have not retracted their statements would not be a ground to deny cross examination. .(M/s Mulchand M. Zaveri & 1 Versus Union of India & 1)- 2016 (4) TMI 1074 – GUJRAT HIGH COURT

Additional Commissioner of Delhi VAT can’t reject application filed under Amnesty Scheme [2016] 68taxmann.com 385 (Delhi)Jaycon Infrastructure Ltd. v. Commissioner of Trade & Taxes

CST & VAT: Delhi VAT – Where assessee, a bank, made advances to customers for purchase of cars and said cars were hypothecated to bank as security and upon default in repaying loan bank had right to repossess car and brought it to sale, disposal of repossessed cars by bank constituted ‘sale'[2016] 68 taxmann.com 296 (Delhi) Citi Bank v. Commissioner of Sales Tax

Amount received by bank from sale of hypothecated goods is liable to sales tax under Delhi VAT

Company Law:

MCA clarifies that the Companies (Accounting Standards) Amendment Rules, 2016, dt.30.03.2016 is applicable from F.Y.2016-17. Cir.No.04/2016.

Government increases interest rates on employee provident fund (EPF) contributions from 8.7% to 8.8% for 2015-16.

Taxis that run on petrol or diesel will not be allowed to ply in NCR from May 1.

Key Dates:

Last date of E-payment of service tax foe April by companies vide Challan No. GAR-7 -06/05/2016

Income Tax Updates:-

The facility to upload online quarterly TDS/TCS statements in the E-Filling portal shall be available with effect from 1st May 2016. (Click here to see the procedure)

Bulk upload of form 15CA, Form 15CB and Form 15CC are available for E-Filling.

No teacher, no professor nor a mentor can teach the important lessons in life better than a hungry stomach and an empty pocket.

The things that we love tell us what we are. -Thomas Aquinas

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