corporate and professional updates 19th may 2018

corporate and professional updates 19th may 2018

Direct Tax:

• Madras HC directs the order u/s 201(1)/(1A) ​(for TDS default on payments to non-resident) ​be treated as ​’show-​cause​’​  notice to the assessee instead of remitting back the matter for a fresh consideration; HC observes that ‘principles of natural justice’ have not been followed by the Revenue while passing the order, notes that materials  which  have  been referred to in the order ​passed by AO ​were never disclosed to the assessee​; HC also notes that AO’s order does not deal with all the factual objections raised by the assessee​ and HC concludes that “The respondent having referred  to several  materials and information not pertaining to the petitioner/assessee in the impugned order and arriving at a conclusion against the petitioner largely based on such information, the impunged proceedings can be directed to be treated as a show cause notice​”​; Directs the assessee to submit preliminary objections wherein it can also raise plea of limitation ​(initiation of TDS default proceedings beyond 6 years) ; HC rejects taxpayer’s request that “it should be furnished with all information that the respondent has referred to and relied on or might have collected behind the back of the petitioner​”, HC instead directs taxpayer to request specific documents and ​​explain its relevancy ​to the tax authorities :HC [TS-248-HC-2018(MAD)]
• Delhi ITAT holds that any claim to treat expenditure as extra-ordinary and not arising in normal course of business “needs to be demonstrated with strict evidence”; [TS-345-ITAT-2018(DEL)-TP]
• Where asssessee had charged depreciation for wind mills at a higher rate than what is mentioned in Schedule XIV of Companies Act, 1956,as windmill had not performed at expected level and nothing was brought on record to show how and on what basis, higher rate of depreciation was arrived,while computing book profit AO had restricted the depreciation as per Schedule XIV of Companies Act, 1956 and holding that assessee had no reason to provide depreciation at a higher rate.-Indus Finance Corporation Ltd. v. Deputy Commissioner of Income Tax.
• HUF does not come under specified category of relative under section 56(2) (vii), Explanation (e); therefore, money received by an individual from HUF as gift would not considered as valid gift.-Gyanchand M. Bardia v. Income Tax Officer.
• Incurred in connection with issue of shares was to be held as capital in nature: Madras- HC Sterling Holiday Financial Services Ltd. v. Assistant Commissioner of Income Tax.
• Income Tax could be levied only when real income would accrue to assesse. Where a dispute was pending between assessee-contractor and builders, only income that had come to assessee in relevant assessment year would be taxable and not income that would have come to it if claims against builders were allowed.-HC ofKerala- Commissioner of Income Tax v. Sushil Thomas Abrahum.
• CBDT has directed the Income Tax department to hold a special ‘grievance redressal fortnight’ next month to address taxpayers’ disputes regarding rectification and adjustments made in tax demands. between June 1-15.
• Gujarat High Court in the case of M/s. Remark Flour Mills Pvt. Ltd. Vs State of Gujarat Directed that Collecting post-dated cheques under coercion during raid is not permissible, when no tax demand has been confirmed or crystallized.

INDIRECT TAX

• The Central Board of Indirect Taxes & Customs has notified the Customs Brokers Licensing Regulations, 2018 in supersession of the Customs Brokers Licensing Regulations, 2013.
• Constructing residential accomodation for police couldn’t be classified as construction of complex services.-CESTAT New Delhi BENCH, Gupta Construction Company v. Commissioner of Central Excise.
• Replacing old damaged water lines of villages was classifiable as commercial construction services.-CESTAT New Delhi- Vijay Kumar Kataria v. Commissioner of Central Excise, Delhi.
• Where applicant is a supplier of materials for erection of towers, testing etc. called Tower Package and supply of allied services like survey and erection of towers etc. and wants a ruling on whether he is liable to pay tax on freight bills, it is held that applicant supplies works contract service and GST is to be paid at 18 per cent on entire value of composite supply, including supply of materials, freight and transportation, erection, commissioning etc.and it is merely a composite supplies.-AAR West Bengal-EMC Ltd.,In re.
  GST waives off late fees from October for taxpayers who were unable to file GSTR-3B due to technical issues of Trans-1 filing, failed to file TRANS-1 before December 27, 2017.
• Accommodation and restaurant services provided by applicant engaged in hotel business within premises of Hotel, to employees and guests of SEZ units cannot be treated as supply of goods and / or services to SEZ units in State; said services constitute ‘intra-State’ supplies and are taxable accordingly-AAR Karnataka.

FAQ on E-WAY BILLS:

• Query: Whether the e-way bill can be cancelled? If yes, under what circumstances?

• Answer:Yes, e-way bill can be cancelled if either goods are not transported or are not transported as per the details furnished in the e-way bill. The e-way bill can be cancelledwithin 24 hours from the time of generation

MCA Update:

• MCA release a corrigendum related to Companies (Audit & Auditors) Second Amendment Rules, 2018 .
• MCA Clarification on Condonation of Delay Scheme, 2018 on 17.05.2018 (General Circular) Click on the link for more information https://ccurl.in/ NWe0rf

ICAI updates

• ICAI has released aFAQ on accounting treatment of increase in liability on account of enhancement of the gratuity ceiling from Rs. 10 lakhs to Rs. 20 Lakhs due to Payment of Gratuity (Amendment) Act 2018.

Key Date:

• GSTR Return summary for April: 20.05.2018
• Return of TDS/TCS collected in March: 31.05.2018
• Due date for filling of GSTR-6- 31 . may . 2018
• Due date for filling GST TRAN-2- 30.06.2018
• 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