corporate and professional updates 8th may 2018

CORPORATE AND PROFESSIONAL UPDATES 8TH may 2018

Direct Tax:

• 40(a)(ia): The amendment to s. 40(a)(ia) by the Finance Act, 2010 w.e.f 01.04.2010 to provide that all TDS made during the previous year can be deposited with the Government by the due date of filing the return of income should be interpreted liberally and equitably and applied retrospectively
• From the date when s. 40(a)(ia) was inserted i.e., with effect from the AY 2005-2006 so that an assessee should not suffer unintended and deleterious consequences beyond what the object and purpose of the provision mandates.
• The amendment is curative in nature and should be given retrospective operation as if the amended provision existed even at the time of its insertion. [CIT vs. Calcutta Export Company (Supreme Court)]
• 158BB Block Assessment: While it is a cardinal principle of law that in order to add any income in the block assessment, evidence of such income must be found in the course of the search u/s 132, any material or evidence found/collected in a survey u/s 133A
• which has been simultaneously made at the premises of a connected person can also be utilized while making the Block Assessment.
• The same would fall under the words “and such other materials or information as are available with the Assessing Officer and relatable to such evidence” occurring in s. 158 BB.[CIT vs. S. Ajit Kumar (Supreme Court)]
• 92CB Transfer Pricing Safe Harbour Rules: If the assessee has exercised the safe harbour option under Rule 10THD(1) & the AO has not passed any order under rule 10THD(4) declaring the exercising of option to be invalid, the option is treated as valid.
• The Transfer Pricing regime does not apply & the AO has no authority to make any reference to the TPO to ascertain the arm’s length price of the assessee’s specified domestic transactions. CBDT’s circular dated 10.3.2006 could not have and does not lay down anything to the contrary. [Mehsana District Co-operative vs. DCIT (Gujarat High Court)].
• ITAT Mumbai pronounced that where one of the supplier admitted providing accommodation entry would not lead to conclusion that purchase made by the assessee from him is also bogus.
• Shantivijay Jewels Ltd. Vs. DCIT. Jewellery received during Marriage can’t be treated as Unexplained: Delhi ITAT in the case of Sh. VIBHU AGGARWAL, VS. DCIT, held that the jewellery received by assessee at the time of marriage cannot be treated as unexplained under the provisions of the Income Tax Act.
• Unrealized Interest on NPAs not Taxable on Notional Basis: Delhi HC in CIT vs. Brahmaputra Capital & Financial Services Ltd. held that Unrealized Interest on Non-Performing Assets (NPA) cannot be taxed on notional basis.
• Bombay High Court held that the assessee is not required to explain the “source of source” prior to insertion of the proviso to s. 68. If the assessee has discharged the primary onus placed upon it u/s 68 by filing confirmation letters, the Affidavits, the full address and pan numbers of the creditors, the Revenue has to proceed against the persons whose source of funds are alleged to be not genuine. [ Pr. CIT vs. Veedhata Tower Pvt. Ltd (Bombay High Court)]
• ITAT Delhi held that  S. 56(2)(viia)/ Rule 11UA: The “fair market value” of shares acquired has to be determined by the taking the book values of the underlying assets and not their market values.
• On the plain reading of Rule 11UA, it is revealed that while valuing the shares the book value of the assets and liabilities declared by the TEPL should be taken into consideration.
• There is no whisper under the provision of 11UA of the Rules to refer the fair market value of the land as taken by the Assessing Officer as applicable to the year under consideration.[Minda SM Technocast Pvt. Ltd vs. ACIT (ITAT Delhi)

INDIRECT TAX

• Due Date for GSTR-1 for the month of March for aggregate annual turnover exceeding Rs.1.5 Crore -10 May, 2018.
• GST council meeting in its meeting recently discusses change in GST rate for digital transactions and imposition of Sugar Cess. Keeping in view the need to move towards a less cash economy, the Council has discussed in detail.
• Service tax circular no 209 dated 04-05-18 regarding Place of Provision of Service (POPS)  rules wrt development of softwares.

FAQ on E-WAY BILLS:

• Query: What has to be done to the e-way bill, if the vehicle breaks down?
• Answer: If the vehicle breaks down when the goods are being carried with EWB, then the transporter can cause to repair the vehicle and continue the journey. If he is going to change the vehicle, then he has to enter the new vehicle details for that EWB on the web-site using ‘Update vehicle number’ option and continue the journey with new vehicle.

MCA updates

• The Companies (Registration Offices and Fees) Second Amendment Rules 2018 has been notified on 7th May 2018. Accordingly, in case the due date of filings of Annual Return or Annual Financial Statement of the Companies Act, 2013 expires after 30/06/2018, the additional fee @Rs.100 per day shall become payable in respect of MGT-7, AoC-4, AoC-4 XBRL and AoC-4 CFS.

• In all other cases where the belated annual returns or balance sheet/financial statement which were due to be filed whether under the Companies Act,1956 (23AC,23ACA,23AC XBRL,23ACA XBRL,20B,21A) or the Companies Act, 2013 (MGT-7, AoC-4, AoC-4 XBRL and AoC-4 CFS) additional fee as per the applicable slab for the period of delay up to 30th June 2018 plus @Rs.100 per day w.e.f 1st July 2018 shall become payable.

SEBI updates

• SEBI allowed domestic stock exchanges to extend equity derivatives trading until 11.55 pm. The new timings will also allow a better alignment with commodity markets amid implementation of universal exchanges, which function until 11:55 pm.

Key dates:

• GSTR-1 for the taxpayers with annual turnover more than Rs 1.5 cr for the March on monthly  basis: 10.05.2018
• Return of TDS/TCS collected in March: 31.05.2018
• Due date for filling of GSTR-6– 31 . may . 2018
• Due date for filling GST TRAN-2- 30.06.2018

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