CORPORATE AND PROFESSIONAL UPDATES 18 TH AUG 2018

Direct Tax :

• Bombay HC upholds ITAT order and rules in favour of Revenue, denies Sec. 80-IB deduction to assessee-company outsourcing manufacturing activity to contract manufacturer; Observes that the assessee did not retain control over the manufacturing of computers carried out at the factory premises of contract manufacturer; Observes that there was no evidence on record to show that director or any of the assessee’s employees were regularly visiting contractor’s premises for supervision of manufacturing process, further assessee could not produce attendance register, qualification of employees despite being asked for by the AO;[TS-457-HC-2018(BOM)]
• Bangalore ITAT denies assessee-trust’s claim for AY 2009-10 to include unspent accumulated income of earlier AY while computing 15% accumulation; Notes that during relevant AY, AO had taxed the accumulated amount of Rs. 3.71 cr. of AY 2003-04 as the assessee had failed to utilize it for charitable purposes till AY 2008 – 09; Rejects assessee’s action of adding the unspent amount of accumulation, while computing 15% deduction for present AY; Referring to the provisions contained in Sec. 11, ITAT opines that the benefit of accumulation is allowable only to the incomes covered u/s 11(1) and not to deemed income u/s 11 (3); ITAT distinguishes assessee’s reliance on Calcutta HC ruling for Natwarlal Chowdhury Charity Trust on facts:[TS-454-ITAT-2018(Bang)]
• Supreme Court in the case of CIT v. Jalan Hard Coke Ltd. in SLP Civil Diary No. 16078 of 2018:Assessee filed details of share capital money before AO showing that there are number of share applicants who applied for allotment of shares and most of them were residing in Delhi and each application was for Rs.2 lakhs each and payment was made by DDs.Assessee also filed photocopies of share applications.AO required assessee to produce all persons/share applicants for examination.Assessee expressed its inability to produce share applicants, however, submitted that since share application had been received from identifiable persons having capacity and creditworthiness of making share application, no addition u/s 68 should be made.High Court by impugned order held that view taken by Tribunal in deleting the addition was just and proper as assessee could not have been assessed to tax to find out person who had applied as shareholder.SLP filed before the SC against the order of HC has been dismissed
• Scope of the person u/s 2(31) – Collection of Tax (TCS) on Tahbazari u/s 206C(1C) – Whether the term “Parking Lot”, “Toll Plaza”, “Mining and quarrying” include “Tahbazari” – Held No – No TCS liability – Apar Mukhya Adhikari Vs. ITO (2018 (8) TMI 728 – Allahabad High Court).
• Bombay High Court ordered the CBDT to provide clarity on the issue of STT levy on physically-settled derivatives. The court on heard an appeal filed by Anmi against the NSE after the bourse decided to levy the STT at 0.1% on derivative contracts of stocks that are physically settled.

INDIRECT TAX  

• Salary for services provided by the head office of a company to its branch offices in other states will attract 18% GST. According to an order passed by the Karnataka bench of the Authority for Advance Ruling (AAR), the activities between two offices is treated as supplies under the GST law.

FAQ on GST Audit:

• Query : Can any conveyance carrying goods without cover of prescribed documents be subject to confiscation?
• Answer:  Section 130 provides that any conveyance carrying goods without the cover of any documentsor declaration prescribed under the Act shall be liable to confiscation. However, if the owner of the conveyance proves that the goods were being transported without cover of the required documents/declarations without his knowledge or connivance or without the knowledge or connivance of his agent then the conveyance shall not be liable to confiscation as aforesaid.

SEBI UPDATES

• SEBI may soon ask retail investors in the stock and commodity markets to submit a net worth certificate to their brokers. The aim is to keep a check on retail investors’ trading limits, which cannot exceed their level of income.

RBI UPDATES

• RBI may not do much to stabilise the rupee as a fall in the currency is due to global factors. The rupee was still performing better than some other currencies, and that the country had sufficient foreign exchange reserves.

MCA UPDATES

• From now on, it has been made mandatory for private companies to disclose in their annual report if they have complied with all the provisions of the Sexual Harassment of Women at Workplace Act such as setting up internal complaints committee (ICC).

OTHER UPDATES

• Protecting the interests of home buyers in projects floated by Jaypee Infratech Ltd. – SC in exercise of powers under Article 142, applied the provisions of amendments in the IBC by the Ordinance with retrospective effect – Chitra Sharma & Ors Vs. Union of India & Ors (2018 (8) TMI 661 – Supreme Court).
• ICAI sets upa Group to consider voting in any pooling booth in cities having multiple pooling booths in the forthcoming ICAI Election in December 2018.
• ICAI invites Practicing Chartered Accountants to fill the Multipurpose Empanelment Form (MEF) for the year 2018-19 at www.meficai.org by registering themselves in MEF 2018-19, even if registered in MEF in earlier year (s).

KEY DUE DATES 

• GSTR-3B (JULY 2018)-AUG 20th, 2018
• GSTR-5 (JULY 2018)-AUG 20th, 2018
• GSTR-6 (JULY 17 – AUG’18)- SEP 30TH, 2018
• GSTR-4 (JULY-SEP, 2018)-OCT 18th, 2018
• GSTR-5A (JULY 2018)-AUG 20th, 2018
• Quarterly return for registered persons with aggregate turnover up to Rs. 1.50 Crores- GSTR-1 (JULY- SEP, 2018)-OCT 31ST  2018.