corporate and professional updates 24th feb 2018

CORPORATE AND PROFESSIONAL UPDATES 24TH FEB 2018

• Profit from sale of land after dividing it into small plots not to be considered as business income-Where assessee sold its land held for more than 60 years in small plots as required by end users and sale consideration was not ploughed back in land, investment, gains on sale of these plots was to be treated as capital gains. ITAT Rajkot – ACIT Vs. Narendra J. Bhimani
• Disallowance made erroneously in ITR owing to non-deduction of TDS could be raised before ITAT for first time-Where assessee erroneously made certain disallowance in its return on account of non-deduction of tax at source and same was not contested before Commissioner (Appeals).
• It was open for assessee to challenge said disallowances before Tribunal for first time.ITAT Kolkata- Allahabad Bank VS. DCIT
• CBDT has notified ‘Maharashtra Electricity Regulatory Commission’ as statutory body exempted for the purpose of section 10(46) of the Income-tax Act, 1961.
• CBDT has recently issued an explanatory note to the provisions of the Finance Act, 2017. The circular dated 15th February 2018 provides for a brief note on the amendments made in the year regarding the change in the Act, rate structure etc.
• Tax payers have been provided with facility to give details of supplies made to merchant exports @ 0.1%, in all returns.
• Delhi High Court in a recent judgment elaborates on deemed dividend and upholds Revenue’s contention that agreement to escape provisions of section 2(22)(e) of the Income Tax Act was camouflage.
• Delhi ITAT  rules that income arising to assessee (a non-resident company) from supply of software embedded in the hardware to various customers in India, not royalty u/s. 9(1)(vi) of the Act for AYs 2002-03 to 2006-07; [TS-75-ITAT-2018(DEL)]

• Pune ITAT deletes Sec. 40(a)(i) disallowance for non-deduction of TDS u/s. 195 on payment of lease line charges by the assessee (an Indian company) to its US parent, holds payment was not royalty under India-USA DTAA; [TS-70-ITAT-2018(PUN)]

• Mumbai ITAT allows deduction u/s. 80IC to assessee-company (engaged in software/hardware business) for AY 2008-09, holds that since assessee claimed Sec.80IC deduction in duly filed revised return u/s 139(5) and filed tax audit report along with prescribed Form no. 10CCB,“there was a sufficient compliance for claiming deduction”; [TS-67-ITAT-2018(Mum)]

GST Updates:

• GST/Excise & Customs: Process of compressing Natural gas to CNG didn’t amount to manufacture; no duty was payable- Where assessee had compressed natural gas in its factory and cleared same, i.e., CNG, to premises of its customers, wherein CNG was subjected to decompression to make Natural Gas which was sold by the assessee to customers.
• The process undertaken by the assessee in compressing natural gas to CNG did not amount to manufacture. CESTAT Kolkata –CCE Vs. Great Eastern Energy Corpn. Ltd
• GSTN has added a new functionality at GST Portal which can help taxpayers search results of last ten returns transactions
• Government is deliberating on three models to replace existing GST return filing process which includes GSTR-3B, GSTR-1, GSTR-2 & GSTR-3.
• GSTN has added a field in Table 6A of GSTR-1 to enter Cess paid on exports.
• In GSTR-1 & GSTR-5, on addition of records (Invoices/Debit Notes/Credit Notes, an option has been provided to taxpayer to select a lower tax rate for motor vehicle leasing businesses, as per Notification No 37/2017-Central Tax (Rate), dated 13-10-2017
• The Karnataka High court has allowed input tax credit of sales tax paid on cement purchased used for laying for foundation and erection of plant and machinery is allowable. JK Cements Vs 2017 (7) GSTL 408.
• The Madras High Court has allowed of cash refund of unutilized Cenvat amount which is due to fact that final product not being excisable. KG Denim Ltd Vs CCE 2017 (7) GSTL 422.

 

SEBI UPDATES

• SEBI is planning checks and balances on overseas investors taking the ‘private bank route’ to invest in domestic markets.
• The move comes after several industry players expressed concerns that the new route allowed by the SEBI could be misused by investors, such as participatory notes (p-notes).

MCA UPDATES

• Issue of notice is mandatory for the Adjudicatory Authority before admitting application ex parte. GEO Metal Resources (P.) ltd. Vs ABW Infrastructure ltd. [2018] 142 CLA 195 (NCLT) New Delhi (Special Bench) CP No. (IB)-359(ND)/2017.
• MCA has notified new order which is called as “The Companies (Removal of Difficulties) Order, 2018, which provides that the independent Director re-appointed for second term shall be removed only by passing Special Resolution and after giving the opportunity of being heard. Dated 21st February 2018.

OTHER UPDATES

• Employees’ Provident Fund Organization has reduced interest rate on deposits to 8.55% for 2017-18. It was 8.65% for 2016-17 and 8.8% in 2015-16.
• Extension of the last date for submission of examination application forms in respect of Special Examination for members of foreign accounting bodies held under MRA/MOU entered into by ICAI with the foreign accounting bodies.

FAQ on Condonation of Delay Scheme (CODS):

• Query: What should be the filing window for e-Form CODS 2018 under the Scheme? OR Upto what date e-Form CODS 2018 can be filed?
• Answer: The e-Form CODS 2018 shall be available for filing from February 20, 2018. The Scheme does not mention any sunset date upto which the e-Form CODS 2018 can be filed. But in our view, from the collective reading of the provisions in the Scheme, the same shall have to be filed within the validity period of the Scheme itself i.e. upto March 31, 2018.
• Read more about: What is core Business Activity GSTRead more about: Important decisions made at the  43^rd GST Council  meeting