Corporate and Professional updates 1st March 2018

Direct Tax:

• 10(23C) is independent of sec. 11; relief to trust available even if sec. 10(23C) conditions not complied with- Charging of fees is a part of receipt during course of carrying out educational activity which has to be completely applied for that activity alone and therefore, such a receipt has to be seen as an application of income for charitable purpose.ITAT Delhi – Adarsh Public School Vs JCIT.
• Sum paid for acquiring licence of copyrighted technology was allowable as revenue exp.: Where assessee-company entered into an agreement to take over business of a proprietory concern, in view of fact that in terms of agreement only a license to use copyright was granted to assessee, however, it had not acquired copyright itself, license fee paid by assessee was to be allowed as revenue expenditure. PUNJAB AND HARYANA HC- PCIT Vs. Mobisoft Tele Solutions (P.) Ltd
• ITAT (Mumbai) which allowed deduction u/s 80IC for A. Y. 2008-09 where the assessee company made the claim in a revised return of income filed u/s 139(5), filed tax audit report and the prescribed Form 10CCB in support of the claim.

• HC admits assessee’s appeal for AY 2008-09 on the question of law “Whether on the facts and circumstances of the case and in law, the Tribunal was justified in upholding the rejection of segmental Transactional Net Margin Method and adopting the comparable Uncontrolled Price method for determining any adjustment under Chapter X in respect of the purchase of raw materials and sale of finished goods made by the Appellant?”   [TS-106-HC-2018(BOM)-TP]

• ITAT dismisses assessee’s TP-ground for AY 2009-10 relating to adjustment on royalty and franchise fee, as withdrawn, in view of resolution under MAP; However, regarding disallowance of foreign exchange loss and R&D Cess on royalty payment, accepts Revenue’s contention to remand it back to AO/TPO to pass a speaking order in view of MAP resolution; Also takes note of assessee’s submission that it had accepted the transfer pricing additions as decided in the MAP resolution and thus, there is no justification on the part of the AO/TPO to make any further addition on account of foreign exchange loss and R&D cess . [TS-103-ITAT-2018(DEL)-TP]

• Mumbai High Court rejected the arguments of the Revenue that on initiation of proceedings under section 153A of the Act, the reassessment final for assessment years covered under section 153A of the Act stands abated. Only the pending assessments zget revived under section 153A of the Act.Jawahar B. Purohit Vs. Asst. CIT & Ors. (ITAT Mumbai)

• ITAT Pune held that the assessee has complied with all the conditions for claiming the exemption under section 54B of the Act in the assessment year under appeal. Accordingly, the impugned order is set aside and the appeal of the assessee is allowed. Majid Khan Nisar Khan Vs ITO (ITAT Pune)

GST UPDATES

• Govt. issues directions on non-utilisation of disputed credit & non-transition of blocked credit-The SCN issued under the Cenvat Credit Rules and last adjudicating authority was held that Cenvat credit was not admissible, then such disputed credit shall not be utilized to discharge the tax liability under GST Act. Further, if blocked credit is carried forward and credit to electronic credit ledger in contravention of Section 140 of the CGST Act, then it shall not be utilized.
• `Discounts and Rebates would not form part of ‘Sale Price’: Supreme Court In the case of M/s. Universal Cylinders Limited v. Commercial Tax Officer.
• In GSTR-3B, reverse ITC for bills older than 180 days. For Feb return, reverse ITC for bills dt 31.8.17 or before. Pay interest @ 24% p.a.
• In GSTR-1 GST must be exactly equal to Taxable Value X GST Rate rounded off to 2 decimals (for each invoice line item). Other rounding gives error.
• GSTN has enabled online filing of letter of Undertaking LOU. Go to User Services and Select the Tab “Furnishing Letter of Undertaking.
• UIDAI instructs Govt. departments & states not to refuse essential services like medical, school admission, ration through PDS etc for want of Aadhaar.

FAQ on Condonation of Delay Scheme (CODS):

• Query:During the period of Scheme as their DIN will be activated, Can disqualified directors associated with active companies (non-defaulting) file their overdue documents?

• Answer:DIN shall be activated for filing only overdue documents of only defaulting companies and therefore, active companies (non-defaulting) shall not be allowed to file any documents (including overdue documents) with DIN of the disqualified directors during the period of this Scheme. Such companies shall continue to appoint new directors through back-end process notified by concerned ROCs.

• Query: What is the procedure to avail benefits of CODS scheme?
• Answer: There is no separate application required to be filed for availing benefits under this Scheme. The defaulting companies shall straight away proceed to upload their overdue documents with the DIN of the disqualified directors as the same shall be temporarily activated under this Scheme pursuant to Para 4 of the Scheme which lays down the procedure for the purpose of this Scheme. According to Para 4, the DIN of the disqualified directors associated with such defaulting companies shall be temporarily activated for the validity period of this Scheme to enable them filing of the overdue documents.

MCA Update:

• Stakeholders may please take note that Condonation of Delay Scheme (CODS, 2018) e-form is available for filing purposes.

RBI Updates:

• The Reserve Bank of India has issued notification regarding Revised guidelines relating to participation of a person resident in India and Foreign Portfolio Investor (FPI) in the Exchange Traded Currency Derivatives (ETCD) Market. Vide notification no RBI/2017-18/134, dated 26^thFebruary 2018.