Corporate and Professional updates 7th March 2018

Corporate and Professional updates 7th March 2018

Direct Tax:

• Under section 57(iii) of the Act, only those expenditure are to be allowed which are related to earning of income from other sources. Since the expenditure claimed by the assessee was not incurred to earn income from other sources, the same cannot be allowed.[Monarch Commodities Pvt. Ltd. Vs.  DCIT (ITAT Bangalore)]

• Depreciation allowable in assets cost of which has already been allowed as application of income. Amendment in section 11(6) restricting depreciation in such came is prospective in nature.[CIT Vs Rajasthan and Gujarati Charitable Foundation (Supreme Court of India)]

• The IT department has unearthed a Rs 3,200 crore scam where 447 companies deducted tax from its employees but did not deposit with the government and diverted to further their business interests. The TDS wing of the I-T has initiated prosecution against these firms and in some cases, warrants have been issued, sources said.

• HC allows deduction of lease rent paid on shed rented out due to delay in start of business- Where business could not be started due to some difficulties and part of shed taken on lease was given on rent, lease rent paid could be said to be on account of business expediency; same was to be allowed.
• The Central Board of Direct Taxes has notified the scheme for centralized issuance of notice, which may be known as the Centralized Communication Scheme, 2018 and shall come into force on the date of its publication in the Official Gazette.
• The Central Board of Direct Taxes has notified the scheme for centralized issuance of notice, which may be known as the Centralized Communication Scheme, 2018 and shall come into force on the date of its publication in the Official Gazette.
• Share premiums can be assessed under Section 68 of the Income Tax Act. Cornerstone Property Investments Pvt. Ltd vs. ITO (ITAT Bangalore).
• Rent received by an Association of Co-Owners Whose only Objective is to Derive Income from Letting out of Property is Taxable as ‘Income from House Property’: Manek Lodge Properties vs. Add CIT, Mumbai (ITAT).

Indirect Tax:

• CBEC issued Clarification regarding taxable services provided by the member of the Joint Venture(JV) to the JV and vice versa and inter se between the members of the JV Vide Circular No. 35/9/2018-GST dated 5th March 2018.
• E-SANCHIT (enabling the registered persons to file documents online) becomes mandatory w.e.f. 15.03.2018.  CBEC DO.No.09/CH (EC)/2018.
• 03.18 is Last Day to file GSTR-1 for Taxpayers with aggregate turnover of more than Rs. 1.50 Crores for Jan, 2018.

FAQ on Condonation of Delay Scheme (CODS):

• Query: Can the person chargeable with tax pay the amount of demand along with interest and reduced penalty before the service of show cause notice under sub-section (1) or as the case may be, the statement under sub-section (3) of section 74?a
• Answer:Yes. The person chargeable with tax pay the amount of tax along with interest undersection 50 and a penalty equivalent to 15% of such tax based on his own ascertainment of such tax or the tax as ascertained by the proper officer and inform the proper officer in writing of such payment. On receipt of such information, the proper officer shall not serve any notice in respect of tax so paid or any penalty payable under the provisions of this Act or rules made thereunder.

Corporate Law:

• The Ministry of Corporate Affairs (MCA) has amended the Companies (Accounts) Amendment Rules, 2014 to provide new form AOC-3A for sending financial statements including consolidated financial statements to members, debenture trustees and to all persons other than such members or trustee, being the person so entitled, not less than 21 days before the date of Annual General Meeting by Ind AS Complaint Company
• MCA notifies form AOC-3A for Ind AS Complaint Co.s to send financial statements to stakeholders. The Companies (Accounts) Amendment Rules, 2018.
• MCA has notified the Companies (Accounts) Amendment Rules, 2018 which shall come into force on the date of their publication in the Official Gazette i.e. 27-02-2018

Other updates

• RBI is likely to stick to its target of making digital wallets inter operable by April despite allowing payment companies two additional months to comply with its customer verification requirement.

Key Dates:

• Submission of forms received in March to IT commissioner: 07/03/2018
• Payment of TDS/TCS deducted/collected in March: 07/03/2018
• Taxpayers with annual aggregate turnover more than Rs. 1.5 crore need to file GSTR-1 for Jan on monthly basis: 10/03/2018
• Payment  of annual membership and COP fees for the year 2017-18: 15-03-2018
• PF & ESI Payment for the month of Feb 2018-:15-03-2018
• GSTR-3B for the Month of February 2018: 20-03-2018
• due date for linking of Aadhaar number with PAN, mobile, insurance policy, bank accounts etc:-31-03-2018
• ITR Filling last date for Income Tax Returns (ITRs) for FY 2015-16 and FY 2016-17:-31-03-2018
• Condonation of Delay Scheme 2018 which allows defaulting companies to file its overdue documents which were due for filing.:-31-03-2018

Read more about: What is core Business Activity GST

Read more about: All about GST Offenses, Penalties, and Appeals