CORPORATE AND PROFESSIONAL UPDATES 5TH OCT 2018

Direct Tax:

• ITAT Mumbai held that set-off of long-term capital loss on sale of unquoted equity shares against gain on sale of property. Chandra N. Hingorani Vs ITO (ITAT Mumbai)
• Calcutta High Court held that payment by tenant for removal of sub-tenants from property is capital expenditure. nited Spirits Limited Vs Commissioner of Income Tax (Calcutta High Court)
• The ITAT Delhi in ITO vs. Gisil Designs Pvt. Ltd has held that the AO was negligent in filing the remand report before the CIT(A). The same attitude has continued at the stage of filing appeal to the ITAT as condonation of delay was filed for 92 days. The excuse that the appeal was not filed due to the AO being busy with time barring assessment is not acceptable. The AO deliberately overlooked the impugned order and did not file appeal before the Tribunal within the period of limitation. Even the authorization by Pr. CIT to file the appeal has been granted after the period of limitation. Hence sufficient cause is not shown – [2018-ITRV-ITAT-DEL-027]
• The ITAT Delhi in ITO vs. Virat Credit & Holdings Pvt.Ltd has held that the grant of approval by the CIT with the words “Yes. I am satisfied” proves that the sanction is merely mechanical and he has not applied independent mind while according sanction as there is not an iota of material on record as to what documents he had perused and what were the reasons for his being satisfied to accord the sanction to initiate the reopening of assessment u/s 148 of the Act – [2018-ITRV-ITAT-DEL-031]
• The Delhi High Court in Pr. CIT vs. N. C. Cables Ltd has held that mere appending of the word “approved” by the CIT while granting approval u/s 151 to the reopening u/s 147 is not enough. While the CIT is not required to record elaborate reasons, he has to record satisfaction after application of mind. The approval is a safeguard and has to be meaningful and not merely ritualistic or formal – [2017-ITRV-HC-DEL-181]

INTERNATIONAL TRANSATIONS / TRANSFER PRICING

• The Karnataka High Court in PCIT vs. Softbrands India P. Ltd has explained the entire law on when transfer pricing disputes constitute “substantial questions of law” for challenge in the High Court explained. Transfer Pricing Adjustments on the basis of the comparables are a matter of estimate of broad and fair guess-work of the Authorities based on relevant material. The exercise of fact finding or ‘Arm’s Length Price’ determination or ‘Transfer Pricing Adjustments’ should become final with a quietus at the hands of the final fact finding body, i.e. the Tribunal. The ITAT’s findings of fact cannot be challenged in the High Court unless it is shown that the findings are ex-facie perverse and unsustainable and exhibit total non-application of mind by the Tribunal to the relevant facts of the case and evidence before it – [2018-ITRV-HC-KAR-025]
• The ITAT Ahmedabad in ACIT vs. Veer Gems has explained the important law on meaning of expression “associated enterprise” u/s 92A. The mere fact that an enterprise has de facto participation in the capital, management or control over the other enterprise does not make the two enterprises “associated enterprises” so as to subject their transactions to the rigors of transfer pricing law – [2017-ITRV-ITAT-AHD-179]
• The ITAT Ahmedabad in Quick Flight Limited vs. ITO has held that in case where payments have been made to deductees on the strength of the beneficial provisions of s. 115A(1)(b) of the Act or as per DTAA rates r.w.s. 90(2) of the Act, the provisions of s. 206AA cannot be invoked by the AO insisting to deduct tax @ 20% for non-availability of PAN – [2017-ITRV-ITAT-AHD-180
• Delhi High Court has issued notice in a plea seeking a direction to the CBDT to extend the date of filing of ITR and Tax Audit Report for AY 2018-2019 by assessees who are required to file the same by Sept 30, 2018

INDIRECT TAX

• Finance ministry expects the GST collections to cross Rs 1 trillion in November and December on account of festive season demand and the anti-evasion measures initiated by the revenue department. GST) revenue rose to Rs 944.42 billion in Sept.
• ICAI is clarified that an Internal Auditor of an entity cannot undertake GST Audit of the same entity.

FAQ on GST Audit:

• Query:What would be the action by the proper officer upon conclusion of the audit?
• Answer:The proper officer shall, on conclusion of audit, within 30 days inform the taxable person about his findings, reasons for findings and the taxable person’s rights and obligations in respect of such findings.

MCA UPDATES

• Standard Operating Procedure by MCA for Grievance Redressal Mechanism: Complaint on MCA website through link https://www.mca.gov.in/mcafoportal/usercompaintDetails.doshould be raised by the Stakholders/professionals.
• Form 1 and Form 2 (along with Form 17 & Form 18) which are pending processing as on 1st October 2018 shall be marked under resubmission.  All forms shall be resubmitted by using new service RUN-LLP for name reservation or FiLLiP for incorporation only.  All names which have been approved and against which incorporation form is not filed, shall be allowed to be used to file form FiLLiP for incorporation.  All names which have been approved and against which change of name Form 5 is not filed, shall be allowed to be used to file in revised Form 5 only.

More read for relates blogs are:

What are the interim dividend and final dividend?

What is the Process to get back shares from IEPF

CLOSURE OF SUBSIDIARY COMPANY

Compliance for Foreign Subsidiary Companies in India

Key Highlights of RACP Bill, 2020 and Companies (Amendment) Bill,2020

RBI UPDATES

• The Reserve Bank of India has issued notification regarding External Commercial Borrowings (ECB) Policy. Vide notification no RBI/2018-2019/54, dated 3^rdOctober 2018.

OTHER UPDATES

• NFRA IS CHALLENGED IN THE COURT: ICAI, in Hon’ble High Court, after hearing the counsels the high court passed the order to stay any disciplinary action against any member, next date of hearing is 16.01.2019
• Govt is mulling permitting 100% FDI in insurance broking to give a boost to the sector. The FDI policy, at present, allows 49% foreign investment in the insurance broking, insurance cos, third party administrators, surveyors and loss assessors

KEY DUE DATES

October 2018 Due Dates:

• 5th October- DIR 3 KYC of Directors
• 7th October- TDS Deposit – Sep 2018 Month
• 14th October- ADT 1 for Appointment of Auditor
• 15th October- TCS Return for Jul to Sep 2018
• – Tax Audit & ITR for FY 2017-18
• 18th October- GSTR 4 for Composition Dealer for Jul 2017 to Sep 2018
• 20th October- GSTR 3B – Sep 2018 Month
• 30th October- AOC 4 for FY 2017-18
• 31st October- GSTR 1 for July 2017 to Sep 2018
• 31st Oct- TDS Return for Jul to Sep 2018

Disclaimer:

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances; Before making any decisions do consult your Professional / tax advisor. For misrepresentation or interpretation of act or rules Author does not take any responsibility. Neither the author nor the firm accepts any liability for the loss or damage of any kind arising out of information in this document or for any action taken in reliance there on. The author is a Chartered Accountant and the Chief Gardener & Founder Director of Rajput Jain & Associates , a leading Tax & Investment Planning Advisory Service Provider. His blog can be found at https://carajput.com/blog/For any query you can write to singh@carajput.com. Hope the information will assist you in your Professional endeavors. For query or help, contact:   singh@carajput.com or call at 09811322785/4 9555 5555 480)