Corporate and professional updates 8th march 2018

CORPORATE AND PROFESSIONAL UPDATES 8TH 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 s uch came is prospective in nature.[CIT Vs Rajasthan and Gujarati Charitable Foundation (Supreme Court of India)]
• Mumbai ITAT allows assessee’s (an NBFC) claim for service tax payment relatable to exempted services  during AYs 2010-11 and 2011-12 in absence of input tax credit availability as per the Service tax Rules; [TS-100-ITAT-2018(Mum)]
• Delhi HC set-asides ITAT order, upholds CIT’s revisionary proceedings u/s. 263 directing AO to conduct detailed inquiry regarding allowability of Sec. 80IAB deduction to DLF Commercial Developers Ltd. (‘assessee’) on sale of bare shell building; [TS-99-HC-2018(DEL)]
• HC dismisses Revenue’s ground against ITAT’s exclusion Infosys BPO and inclusion of R Systems International, but admits ground against exclusion of 2 comparables, in respect of assessee’s ITES segment for AY 2012-13; Regarding exclusion of Infosys BPO on the ground that profitability was attributed to its brand value, HC notes that brand value was recognized in several orders, thus holds that “no question of law arises.
• Further in respect of inclusion of R systems, HC follows Mckinsey Knowledge Centre wherein it was held that if from the available data on record, the results for financial year can reasonably be extrapolated then the comparable cannot be excluded, thus holds that “the reasonableness of inclusion of R Systems cannot be questioned”; However, admits 2 questions of law regarding comparability of Surya Pharmaceutical Ltd. and Excel Infosys, lists the appeal on May 15, 2018. [TS-135-HC-2018(DEL)-TP]

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.

FAQ on Condonation of Delay Scheme (CODS):

• Query: Can documents which had earlier been filed with some wrong information be revised under this Scheme?
• Answer:  Reason being, Scheme clearly specifies that only overdue documents due for filing upto 30.06.2017 should be filed under this Scheme and therefore revision of previously filed annual filing e-forms shall not be taken on record.
• 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?
• Answer: Yes. The person chargeable with tax pay the amount of tax along with interest under section 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.

MCA Update:

• SPICe form is likely to be revised on MCA21 Company Forms Download page w.e.f 2nd MAR 2018.Stakeholders are advised to check the latest version before filing.

Key Dates:

• Taxpayers with annual aggregate turnover more than Rs. 1.5 crore need to file GSTR-1 for Jan on monthly basis: 10/03/2018
• 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

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