Corporate and professional updates 24th sep 2018

CORPORATE AND PROFESSIONAL UPDATES 24TH SEP 2018

Direct Tax:

• CBDT has amended para 10 of circular no 3 of 2018 dated 11.07.2017.
• ITAT Delhi held that insurance premium for family members of employees is business expenses.Loesche India Pvt. Ltd. Vs ACIT (ITAT Delhi)

• CBDT mulls tax audit due date extension, notification likely early next week -https://taxsutra.com/news/21061/CBDT-mulls-tax-audit-due-date-extension- notification-likely-early- next-week.
• ITAT Delhi held that capital gain tax payable on the sale of land was declared as non-agricultural. Virvati Devi Vs Commissioner of Income Tax (ITAT Delhi)
• CBDT mulls tax audit due date extension, notification likely early next week -https://taxsutra.com/ news/21061/CBDT-mulls-tax- audit-due-date-extension- notification-likely-early- next-week

Income Tax:

• Revision u/s 263 – undisclosed hawala trading – very reliable and genuine information was received from the VAT and Sales Tax authorities with regard to the operations with these dealers styled as ‘hawala traders’ – Revision proceedings sustained  – Bombay High Courtin case of [Shoreline Hotel Private limited Vs. The CITCentral-1]
• Income Tax: Addition on account of difference in TDS receipts – AO directed to re-compute the income of the assessee in accordance with the cash system of accounting.
• which is the system of accounting regularly employed by the Assessee; and to give credit for prepaid taxes on account of tax deducted at source, as per law, having regard to section 199 of I.T. Act r.w.r. 37BA of Income Tax Rules  -AT Delhi in case of [Dhruv Sachdeva Vs. ACIT Circle-27 (1), New Delhi.
• An Income Tax: Receipt towards compensation in lieu of ‘right to sue’ – capital receipt OR revenue income – breach of development agreement and compensation was paid to avoid litigation – compensation received in lieu of ‘right to sue could not be regarded as revenue receipt – ITAT Ahmedabadin case of [Bhojison Infrastructure Pvt. Ltd. Vs. The ITO, Ahmedabad]
• Income Tax:  Levy of penalty u/s 271(1)(c) or u/s 271AAB – assessment u/s 153A – the deeming provisions of Explanation 5A cannot be applied because at the time of the search for the relevant previous year under appeal.
• The due date of filing of the return of income had not expired  – ITAT Delhi in case of SHRI Sanjeev Kumar Vs. that, Central Circle-6, New Delhi]

Indirect Tax:

• CBEC has notified that every electronic commerce operator, not being an agent, shall collect an amount calculated at a rate of a half percent.
• The net value of intra-State taxable supplies made through it by other suppliers where the consideration with respect to such supplies is to be collected by the said operator. Vide notification no 52/2018, dated 20th September 2018.
• Finance Ministry notified that e-commerce operators shall collect an amount at the rate of one percent as TCS under the GST on the supplies made by them.
• collected amount half will go to the Centre and a half to the State where the supply takes place.

FAQ on GST Audit:

• 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 the 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.

MCA UPDATES

• DIR-3 KYC fee has been reduced to INR 500/- from INR 5,000/- for 15 days, amendment notification dated 20.09.2018 vide Companies (registration office and Fees) 5th Amendment Rules, 2018.
• MCA has issued notification dated 10.9.2018 containing, inter alia, rules for unlisted Public Companies effective from 2.10.2018 to Issue securities only in Demat form and Facilitate dematerialization of all its existing securities.
• Please note that as a part of process reengineering of LLP Incorporation related forms viz. Form 1, Form 2 with linked forms Form 2A /17/18, Form 5.
• The ‘Pay Later’ option would be temporarily disabled for use in respect of these forms with immediate effect till 1st October 2018. Stakeholders may kindly note and plan accordingly.
• MCA has amended the Companies (Indian Accounting Standards) Rules, 2018.
• These rules may be called the Companies (Indian Accounting Standards) Second Amendment Rules, 2018 which shall come into force on the date of their publication in the official gazette.

OTHER UPDATES

• Ind AS 20 amended; allows adjustment of grant income with the cost of asset: Government grants related to assets, including non-monetary grants at fair value, shall be presented in the balance sheet either by setting up the grant as deferred income or by deducting the grant in arriving at the carrying amount of the asset.
• India Post Payments Bank Limited invites sealed tender offers to impanel Bidders for Concurrent Audit in accordance with the scope set out in the tender document. Portal eprocure.gov.in.

KEY DUE DATES 

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