corporate and professional updates 16th july 2018

corporate and professional updates 16th july 2018

Direct Tax :

• Mumbai ITAT rules that Sec. 79 restriction on loss set-off and carry forward would apply to assessee-company, whose entire stake was acquired by a widely held company during subject AY 2011-12; Holds that Sec. 79 was applicable as assessee was a closely held company at the time when change in shareholding took place; Rejects assessee’s stand that since it became a widely held company post stake sale, i.e., a company in which public are substantially interested, Sec. 79 restriction cannot apply, ITAT clarifies that the status of the company after the change in shareholding pattern is not relevant for invoking Sec 79 ;[TS-377-ITAT-2018(Mum)]
• Delhi HC stays operation of the order of ITAT President consolidating various cases, calls it as ‘utterly unreasoned’; HC notes that ITAT had consolidated several appeals which apparently did not involve the same question of law or facts, further observes that they arose out of different assessment proceedings and appeals which had no connection with each other;[TS-374-HC-2018(DEL)]
• CBDT & CBIC has increased the monetary threshold limits for departmental appeals at various levels — appellate tribunals, high courts, and  the Supreme Court.
• This is the second time in two years that the threshold has been hiked for the (CBDT) and (CBIC).

	Appeals in Income Tax matters	Monetary Limits (in Rs.)
1	Before Appellate Tribunal	20,00,000/-
2	Before High Court	50,00,000/-
3	Before Supreme Court	1,00,00,000/-

• ITAT Mumbai has sought further investigation into cases linked to HSBC’s Geneva branch involving A US-based NRI. A list of people of  Indian origin having bank accounts in Geneva was handed to India by France in 2011.
• Delhi ITAT remits issue of ALP-determination in respect of assessee’s provision of business support services to AE considering that entire TP analysis was made by the TPO on the basis of wrong FAR of the assesse as well as comparables for AY 2010-11; Opines that “when the entire TP analysis is based upon the wrong FAR of the comparables and the TPO has assumed wrong functions being performed by the taxpayer, the entire subsequent exercise as to selecting the comparables has become erroneous and is of no use to determine the arm’s length price of international transaction for determining ALP of international transaction rather entire exercise needs to be carried out afresh”; [TS-521-ITAT-2018( DEL)-TP]
• ITAT remits ALP determination of royalty payment to AE for AY 2010-11; Relies upon ITAT order in assessee’s own case for AY 2007-08 and 2008-09; TPO had restricted the ALP for royalty at 1% of net sales under CUP while assessee had used TNMM for determining ALP of royalty payment; Separately, ITAT rejects assessee’s ground to set aside DRP’s order alleging judicial bias, observes that no instance of bias was brought to its notice; [TS-524-ITAT-2018(Bang)-TP]

INDIRECT TAX

• Multi Vehicle Option for e-Way bill: The new option has been introduced wherein the consignment of one e-way bill has to be moved in multiple vehicles, after moving to transshipment place.
• GST Practitioners Required To Pass Enrollment Of GST Practitioners Examination Before 31st December, 2018.
• To make compliance easy for businesses the Government has introduced various initiatives like GST Practitioners and GST Facilitation Centres.
• Section 48 of the CGST Act provides for the authorisation of an eligible person to act as approved GST practitioner.

FAQ on GST Audit:

• Query: Is summary assessment order to be necessarily passed against the taxable person?
• Answer: In certain cases, like when goods are under transportation or are stored in a warehouse, and the taxable person in respect of such goods cannot be ascertained, the person in charge of such goods shall be deemed to be the taxable person and will be assessed to tax (proviso to Section 64 of CGST / SGST Act).
• Query: What is the legal recourse available in respect of a person who is liable to pay tax but has failed to obtain registration?

• Answer: Section 63 of CGST/SGST Act provides that in such a case, the proper officer can assess the tax liability and pass an order to his best judgment for the relevant tax periods. However, such an order must be passed within a period of five years from the due date for furnishing the annual return for the financial year to which non-payment of tax relates.

Read more about: What is core Business Activity GST

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

MCA UPDATES

• MCA has notified the constitution of the Jaipur Bench of National Company Law Tribunal w.e.f. 01-07-2018. It is now further informed to all  the Stakeholders and companies that all matters having territorial jurisdiction at NCLT, Jaipur Bench, as filed under the different provisions of  the Companies Act, 2013 and / or Insolvency & Bankruptcy Code, 2016 have been transferred from NCLT, New Delhi Bench to NCLT, Jaipur  Bench.
• DIR-3 KYC will be available on MCA21 Company Forms Download page w.e.f 14th July 2018 for filing purposes. Stakeholders are advised to plan accordingly.
• Forms MGT-7, AOC-4 and Additional Attachment are likely to be revised on MCA21 Company Forms Download page w.e.f 14th JULY 2018. Stakeholders are advised to check the latest version before filing.

OTHER UPDATES

• India is now the world’s sixth-biggest economy, having muscled past France. India is expected to grow at 7.4 per cent in 2018 and 7.8 per cent  in 2019, leaving its nearest rival China behind.
• Ministry of Law & Justice, vide Circular No F.No: A-12023(1)/2/2018-Admn.III(LA) dated 06.07.2018, has invited applications for appointment to the posts of Judicial & Accountant Members of the Income Tax Appellate Tribunal.
• Membership Open For Ccatax (Tax Bar)  Chd Ca Taxation Association  Apply Online At WWW.CCA.Tax  No Membership Fees , Only Tax Practitioner May Apply. Membership Only For Chandigarh Region.
• Amounts paid as part of the lease premium or biannual or annual payments for a limited/specific period towards acquisition of lease hold rights are not subject to TDS, being capital payments.
• New Okhla Industrial Development Authority (NOIDA) vs. ACIT (Supreme Court) (S. 194-I).

RBI UPDATES

• RBI has mandated for Incorporation of Name of the Purchaser on the Face of the Demand Draftand its possible misuse for money laundering.

SEBI UPDATES

• SEBI has issued circular w.r.t. Discontinuation of acceptance of cash by Stock Brokers from their clients either directly or by way of cash deposit to the bank account of stock broker.

KEY DUE DATES

• GSTR-3B (Jun 2018)-Jul 20th, 2018

• GSTR-5 (Jun 2018)-Jul 20th, 2018

• GSTR-6 (Jul’17 – Jun’18)- Jul 31st, 2018

• GSTR-4 (Apr-Jun, 2018)-Jul 18th, 2018

• GSTR-5A (Jun 2018)-Jul 20th, 2018
• Quarterly return for registered persons with aggregate turnover up to Rs. 1.50 Crores- GSTR-1 (Apr-Jun, 2018)-Jul 31st, 2018.