-Professional Update For the Day:


Direct Tax:-

CBDT has issued Circular on 2nd Nov 2016 on Chapter VI-A deduction on enhanced profits, by virtue of which expenditure disallowed if related to the business activity against which the Chapter VI-A deduction has been claimed, the deduction needs to be allowed on the enhanced profits.

Capital gain tax will be paid by the partners of the dissolved partnership firm on the sale of its assets.{Vatsala Shenoy Vs. JCIT, Supreme Court of India}. High Court disallows travel exp. of wife who went with director on business tour Commissioner of Income-tax (Central), Ludhiana v.Hero Cycles Ltd.
[2016] 74 254 (Punjab & Haryana)

Sec. 80P relief available if society provides credit to its members alone and it doesn’t receive deposits from public Commissioner of Income-tax, Circle-I, Vellore v.Kalpadi Co-operative Township Ltd. [2016] 74 226 (Madras)

Application for sec. 10(23C) relief can be made even prior to April 1 of AY for which exemption is sought Shri Guru Ram Dass Ji Educational Trust v. Chief Commissioner of Income-tax, Amritsar [2016] 74 220 (Punjab & Haryana)

Delhi High Court in the below citied case held that even if the claim for s. 80-IA deduction is contrary to Pandian Chemicals 262 ITR 278 (SC) and Liberty India 317 ITR 218 (SC), the assessment cannot be reopened (beyond 4 years) in the absence of tangible material. The reasons recorded for the reopening cannot be improved or supplemented later.(Woodword governer (India) Ltd. Vs. ACIT)

In valuing the shares of a privately held co, the “enterprise valuation” has to be taken by valuing even the assets held by subsidiaries of the Company. It is common for the sellers to charge a “controlling premium” for the sale of the shares. Such transfers to enable restructuring and re-aligning the shareholding pattern are genuine and bona fide. The alleged excess consideration for the sale of the shares cannot be treated as “unexplained income”.(Amritlal T Shah Vs. ITO Mumbai)

Electric bikes assembled from parts procured from China held as manufacturing for sec. 80-IC relief Assistant Commissioner of Income-tax, Circle Palanpur v. Accura Bikes (P.) Ltd. [2016] 74 200 (Ahmedabad – Trib.)
Mere default in furnishing Form 15G/15H doesn’t call for sec. 40(a)(ia) disallowance Assistant Commissioner of Income-tax, Circle 1(1), Tirupati v. Chittoor Dist. Co-operative Central Bank Ltd. [2016] 74 202 (Hyderabad – Trib.)

HC allows withdrawal of oppression petition as other shareholders approached CLB on similar issue Karnataka Theaters Ltd. v. Ratnavarma Padival [2016] 74 230 (Karnataka)

SC to decide whether ‘Ansal Housing’ is liable to pay tax on flats lying unsold; SLP admitted Ansal Housing & Construction Ltd. v. Commissioner of Income-tax-1 [2016] 74 245 (SC)

Indirect Tax:-

CESTAT upholds transaction value declared by assessee during import of electric motors of assorted KW from China, absent evidence of any additional flow back of money to foreign supplier. [TS-436-CESTAT-2016-CUST]

CESTAT grants refund of 4% SAD paid during import of Set Top Boxes (STBs) by DTH service provider despite subsequent sale to distributors in packaged form as ‘antenna system & accessories. [TS-437-CESTAT-2016-CUST]

Dept. can initiate recovery proceeding even after declaring return as invalid due to short-payment of tax: HC Shakti Bhog Foods Ltd. v. Deputy Commissioner of Income-tax [2016] 74 204 (Delhi)

Mumbai CESTAT grants partial respite to assessee, holds no excise duty payable on debit notes raised on purchaser towards excess amount of material used during manufacture of electrical transmission towers, during the period April 1999 to June 2000; Perusing the provisions of old Section 4 of Central Excise Act, CESTAT holds that contracted value between the parties would constitute ‘normal price’ u/s 4(1)(b) and hence, no addition would be required even if debit note was issued for excess material consumed. [TS-429-CESTAT-2016-EXC]

FAQ on Company Law:

Query : One of our client company is a foreign company based in Japan. Now it has passed resolution which is in Japanese language. Now our query is that is it valid or we could only file resolution in English language?

Answer: As per Rule 10 of the Companies (Registration of Foreign Companies) Rules 2014, all the documents required to be filed with the Registrar by foreign company shall be in English language and where any such document is not in English language, there shall be attached a translation thereof in English language duly certified to be correct in the manner given in the rules.


Under GST Upto 10 bank accounts can be added during enrolment. Proof of Bank A/c No,  Branch, Address of A/c holder & few transaction details required.

Under GST no physical documents for enrolment. Soft copy in jpeg or pdf format, upto 1 mb acceptable. Photos can be in jpeg format, upto 100 kb.


MCA has notified that revised Form MGT – 7 and Form GNL-4 are likely to be revised on MCA21 w.e.f 3rd November, 2016.


RBI allowed banks to issue rupee-denominated bonds or Masala bonds in the overseas market to shore up their capital base as well as for financing infrastructure and affordable housing.

RBI has directed banks to put entire banking areas under the CCTV surveillance and keep all the recordings.

ICAI Updates:-

ICAI Has issued a guidance note on Report u/s 92E of the Income Tax Act (Transfere Pricing) dated on 02-11-2016

Key Dates:

E-payment of service tax for the month of October by companies-06-11-2016

Payment of TDS/TCS deducted and collected in the month of October-07-11-2016

Submission of form No. 27C(TCS)  received in October to IT Commissioner-07-11-2016

Courage is resistance to fear, mastery of fear–not absence of fear.

Strive not to be a success, but rather to be of value. -Albert Einstein

The starting point of all achievement is desire.  -Napoleon Hill

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