corporate and professional update may 26, 2016

Professional Update For the Day:

DIRECT TAX:

CBDT notifies jurisdiction for Income Declaration Scheme, 2016 Circular No. 19/2016-Income Tax.

SCN cannot be issued to debtors until tax liability crystallise – HC [M/s Quality Fabricators and Erectors Vs The Deputy Director, DGCEI, Zonal Unit Mumbai and Others (High Court Of Bombay) ]

Sec. 263 not justified due to multiple view on applicability of TDS[Neo Sports Broadcast Pvt.Ltd Vs CIT (TDS) (ITAT Mumbai)]

No Addition u/s 68 if identity, creditworthiness & genuineness established[DCIT Vs. M/s Overseas Infrastructure Alliance (I) Pvt. Ltd. (ITAT MUMBAI)]

ITAT deletes hypothetical, harassing & inconvenient decision[Mrs.Mintu Sayermal Jain Vs Income Tax Officer (ITAT Mumbai)]

Income tax has enabled Electronic Verification Code for online filling of appeal before Commissioner (Appeal) in Form 35 for taxpayers not required file using DSC on income tax India E-filing.(Click here to view)

Mumbai ITAT upholds CIT(A)’s inclusion of interest income earned on Fixed Deposit Receipts as part of operating income while benchmarking international transactions in assessee’s Manufacturing and Trading Activities segment for AY 2005-06.

Holds that since advances received against exports were immediately placed in FDR with the bank for the purpose of taking the letter of credit in favour of the overseas sellers, it could not be said that surplus funds were parked in FDRs only to earn interest income. MUMBAI ITAT – [TS-264-ITAT-2016(Mum)-TP]

INDIRECT TAX:

Central Govt. issues draft Notification and Circular proposing to provide optional single registration and return to first stage dealer and importer; As per proposed Notification, an assessee who conducts business as first stage dealer shall be exempt from taking separate registration as an importer and vice versa.

However, the same is optional and any assessee needing separate registration for his own business purposes may so register; This is so as the credit chain becomes shorter when an importer operates also as a first stage dealer.

Moreover, such assessees henceforth shall have the option to file a single quarterly return giving details of transactions as first stage dealer and importer in one single table; CBEC invites feedback from Departmental Officers and members of a trade by June 6th: CBEC Circular

No service tax applicable on payment processing services proposed to be rendered to a foreign entity, who provides domain registration services to customers in India; Such intended services, classifiable as “Business Support Services”, would be rendered on the applicant’s own account for a fee equal to operating costs incurred plus 13% mark-up.

Consequently, since the recipient is located outside India and applicant would receive payment in convertible foreign exchange, these services would qualify as ‘export’ in terms of Rule 6A of Service Tax Rules and remain non-taxable for purpose of service tax.

Further, no services can be said to have been provided to Indian customers as the applicant would receive fees from foreign entity even in respect of those customers who directly remit service charges through International Credit Card, wherein the applicant is not in the picture

Company Law:

Query: Whether a partner would be able to give loan to or transact other commercial transactions with LLP?

Answer: A partner may lend money to and transact other business with the LLP and shall have the same rights and obligations with respect to the loan or other transactions as a person who is not a partner

Key Dates:

Advance information for the 1st fortnight of June of functions with booking cost > Rs1 lakh in Banquet halls, hotels etc. in Delhi: 27.05.2016

Issue of TDS/TCS certificates for March quarter by all deductors/collectors: 30.05.2016

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