Corporate and Professional Updates 15th May 2018

Corporate and Professional Updates 15th May 2018

• Cochin ITAT denies exemption to assessee-trust for AY 2007-08 and AY 2009-10, rules that assessee’s activities of providing micro finance to poor is purely commercial in nature and there is no element of charity involved, states that such activities cannot be classified under any of the specific activities of relief of the poor, education or medical relief.
• Notes that if the main object of the assessee was providing finance to poor, assessee would have provided loans at interest rate below bank rates or by taking a nominal margin on the money they borrowed from banks, also observes that rate of interest charged by assessee was far above the rate prescribed by The Kerala Money Lenders Act.  [TS-237-ITAT-2018(COCH)]
• Punjab and Haryana HC dismisses assessee’s writ (engaged in trading of shares through his broker) for AY 2009-10, upholds reassessment proceedings u/s 147/148, rules that there was a direct nexus/live link between material submitted by Investigation Wing and the formation of Revenue’s belief that there has been escapement of income on account use of Client Code Modification (CCM) for shifting losses and manipulating assessee’s income.  [TS-239-HC-2018(P & H)]
• Education Subsidy given by Employer to Schools where Children of Employees pay only part Fee, is not Perquisite: Gujarat HC in Gujarat Co-operative Milk Marketing Federation Ltd vs. ITO, held that the subsidy provided by the employer to the school towards the deficit of education expenses of children of his employees is not perquisite in the hands of the employees U/S 17 of Income Tax Act 1961.

Direct Tax:

• During the relevant AY, Revenue had denied exemption on the ground that assessee was providing micro finance by taking loan from commercial banks at an interest rate below 15% pa and charging interest @ 29% pa from its clients, thereby engaging in a commercial activity.
• States that assessee’s business is hit by proviso to sec.2(15), remarks that even if assessee’s activities were intended towards relief for poor, business of micro finance cannot be considered as incidental to the main objective of assessee-trust.
• Tax Recovery Officer could not declare a transaction of transfer as void under section 281 and if revenue wants to have transaction nullified under section 281, it must go to civil court to seek declaration to that effect- Madras HC
• Estimating expenditure incurred on labour & wages in new units merely on basis of comparision with expenditure incurred in old units and made addition on account of unexplained expenditure, such addition was unjustified – HC.
• If assessee claimed rice packing expenditure as assessee procured paddy from farmers in bags and old bags leftover were utilized in new unit to pack rice but failed to support said explanation by any inventory detail in respect of utilization of old bags in new unit, addition under section 69C in respect of packing expenditure was justified.
• Amendment Made by The Finance Act, 2010 in Sec 40(a)(ia) of the Income Tax Act is Retrospective in Nature: Supreme Court in CIT vs. M/s. Calcutta Export Company, held that the amendment made to section 40(a)(ia) i.e deposit of tds before filing of return of income by the Finance Act, 2010 being curative in nature, applies retrospectively.

INDIRECT TAX

• Interest charged by Del Credere agent on short term loan exempt from GST.
• SLP granted for taxability of allotment fee on let-out shops under ‘Renting of immovable property service’.
• Temporary transfer of copyrighted programme couldn’t be taxed under ‘Programme producer service’.
• E-rickshaw Tyres classifiable as new pneumatic tyres of rubber, Taxable at 28% GST-AAR.
• GST Applicable on Supply of motor vehicles as scrap after it usage in business-aAR.
• The Delhi Government has notified the first appellate authority under Delhi Goods and Services Tax Act wherein the Commissioner (State Tax) authorized all the Additional Commissioners to perform the functions of Appellate Authority to hear appeals under section 107 of the Delhi GST.

FAQ on E-WAY BILLS:

• Query: What are the modes of e-way bill generation, the taxpayer can use?
• Answer: The e-way bill can be generated by the registered person in any of the following methods;-
  • Using Web based system
  • SMS based facility
  • Using Android App
  • Bulk generation facility
  • Goods and Services Tax Suvidha Provider – Using GSP
  • Using Site-to-Site integration

MCA Update:

• Audit Firms to face Penalty If Partners found involved in Fraud: Govt amends Companies (Audit and Auditors) Rules 2014 – Putting stringent norms for compliance professionals, Rule 9 has now been omitted from the Companies Act 2013 inconsequent to which, audit firms can be punished for an offence done by one of its partner who acted in a fraudulent manner or abetted or colluded in any fraud.

Key dates:

• Return of TDS/TCS collected in March: 31.05.2018
• The due date for filing of GSTR-6- 31. may. 2018
• Due date for filing GST TRAN-2- 30.06.2018

• PF and ESI for the month of April’18 – MAY 15, 2018

• The due date for issue of TDS Certificate for tax deducted under section 194-IB in the month of March 2018- May 15, 2018

Read our articles:

• E-Invoice Mechanism under the GST

• Blocking/Unblocking the E-Way Bill creation system if fails to file GSTR-3B: GSTN

• Reasons for the Movement of Goods under the GST

For query or help, contact:   singh@carajput.com or call at 09811322785/4, 9555 5555 480)