Corporate And Professional updates on 24th January 2019

Direct Tax:

Case Laws on Income Tax:

Orchid Infrastructure Developers Pvt. Ltd and Ajay Kumar Gupta & ORS. Vs. Union of India & ORS.

Liability to pay interest u/s 234B(2A) – retrospective legislation – sub-section (2A) to Section 234B would be applicable to all proceedings in which orders are pending and /or in which orders u/s 245D(4) are passed on or after 1st June, 2015

 CIT -6, New Delhi Vs. NDR Promoters Pvt. Ltd.

Addition u/s 68 – unexplained money receipt in the form of share capital/share premium – The reasoning given is contrary to human probabilities, for in the normal course of conduct, no one will make investment of such huge amounts without being concerned about the return and safety of such investment.

CIT-7 Vs. M/S. Oracle (OFSS) BPO Services Ltd.

Constitutional validity – Section 80A(5) bars and prohibits the assessee from claiming the deduction u/s 10A and 10B and Chapter VIA if no such claim was made in the return of income. It is also mandatory that the return of income for claiming such deduction should be filed within the time stipulated u/s 139 (1) – The amendment made cannot be faulted and quashed on the ground that it was discriminatory, arbitrary, unreasonable and violative of Article 14 – However, amendment or correction in the claim allowed.

Indirect tax:

FAQ’s on GST:

QUES. What is the time of supply of services for deposits and advances in cases of the recipient issuing a bank guarantee or making a deposit before assumption of risk and issuance of a policy?

ANS. As per the proviso to Section 2(31) of the CGST Act, 2017, a deposit given in respect of the supply of goods or services or both shall not be considered as payment made for such supply unless the supplier applies such deposit as consideration for the said supply. In case of advances, however, the time of supply is the time of receipt of advance as provided in section 13(2)(a) of the CGST Act, 2017.

QUES. Whether the service provided by the re-insurance company to an insurer will be treated as a supply?

ANS. The service of re-insurance falls within the scope of supply, and is chargeable to GST.

Budget Related Updates:

• The Government Assigned Piyush Goyal temporary additional charge of the finance and corporate affairs ministries in the absence of finance minister Arun Jaitley, Due To Medical problem.
• When preparations for the interim budget for 2019-20 are in full swing and the date is too near. Honorable prime Minister Narendra modi advised the president that during the period of indisposition of Arun Jaitley, the portfolios of finance and corporate affairs held by him, be temporarily assigned to Piyush Goyal.
• There was no clarity on whether Jaitley would be back for presenting his sixth budget, scheduled for 1 February or Not.
• The forefront of the National Democratic Alliance government’s trying to deal with a series of current economic affairs, including an instant depreciation in the value of the rupee, a spike in oil prices and a liquidity faced by small businesses. The interim budget comes with high expectations of an election year budget.
• India Ratings and Research last week said it expects India’s fiscal deficit to widen by 70 basis points in the fiscal 2019-20 if a relief package is decided by the government for small and marginal farmers. The budget may try to bring some kind of a feel-good factor for sections like farmers, the middle class and small and medium enterprises.

SEBI Updates:

New Rules for Surplus Reserves of SEBI:

• Framing of New Rules is decided by Central Government for mandate regulators and other autonomous bodies to transfer surplus funds to the exchequer.
• The New Guidelines may come soon within a month. The move would make the Securities and Exchange Board of India and a dozen other regulators, such as the Insurance Regulatory and Development Authority of India and a dozen other regulators, such as the Insurance Regulatory and Development Authority of India to shell out a significant portion of their reserves into the Consolidated Fund of India. The Centre has been eyeing these resources that would help it reduce fiscal deficit.
• SEBI to provide details of expenses they require for their internal operations. The rest of it would go to a public account and the government can allocate funds as and when required,” said a source cited above. According to him, a final consensus is required on the operational aspect of the surplus fund.

Other Updates:

• India to surpass China as oil demand center in 2019.
• NCLAT may look in issue of frivolous bids under CIRP.
• Reliance Industries gets CCI nod to acquire Hathway, DEN.
• To approve Power Tariff Policy soon.
• 32 Lakh jobs created in November EPFO payroll data.
• IL&FS effect ICRA downgrades 6 funds from HDFC, UTI, and Birla AMC.
• Six extensions later, Govt. cancels sole bid for Solar Unit, Power Plant.
• Indian Oil to shut half of Panipat refinery from mid-Feb for maintenance.
• HDFC Life reports 20% rise in net profit at Rs 913 cr in 9 months of FY19.
• Move to allow NITI Aayog to steer drug-price control raises hackles.
• India 4th most attractive investment marketaccording to PWC survey.
• NMDC revives sponge iron unit in Telangana.
• Reliance gets green signal for Jamnagar refinery expansion.
• Sun Pharma replaces formulations distributor with own unit.
• India likely to overtake US in Steel Consumption in 2019.
• Jaypee Infratech Bankruptcy Lenders may extend deadline to submit revival plan.
• Aluminium, zinc edge up on signs of tighter China supply.
• IL&FS Crisis Govt. to seek special dispensation from Reserve Bank
• India’s 7% Growth good, but not enough jobs getting created, says Raghuram Rajan.
• Reliance Nippon Life Asset Q3 net profit drops 17 % to Rs 109 Crore.
• Commerce Ministry seeks stakeholders’ views on report to revive SEZs.
• Reliance Retail 94th among top 250 Global Retailers.
• Sun Pharma shares up 5% after firm replaces domestic formulations distributor
• Installment Payment allowed for PA benefit-based health Policy Claims
• Advances, Margin boost Kotak Bank Net Profit by 13.5%
• Brokerages hopeful of govt meeting FY19 disinvestment target.
• SBI chief to seek open offer exemption for Etihad.
• Bank of Maharashtra Q3 net loss widens 7-fold to Rs 3,764 crore.
• Retail sector investments double to Rs 1,300 crore in 2018
• TCS 3rd most-valued IT services brand globally.
• to spend 6.5% more on food subsidies in FY-20.
• may relax sourcing norms for single-brand retailers
• SBI’s plan to sale Essar Steel loans face uncertainty.
• Foreign firms can now open offices without RBI nod.
• Voda Idea board clears Rs 25,000 cr rights issue.
• Secondary steel producers to play big role for 300 mn tonne industry
• India needs $80-bn investments in next 5 years for grid transmission infra.
• Investment through P-notes rises to Rs 79,513 cr till December-end.
• Cabinet clears $400-m standby swap facility for SAARC nations.
• NMPT targets 44 mt of cargo handling in 2018-19.
• HAL to outsource ALH to domestic private sector company.
• Piyush Goyal given interim charge of finance till Arun Jaitley resumes.
• United Spirits Q3 profit up 43% on demand for premium brand.
• India cuts coffee output estimate by 16% as heavy rains trim yield.
• Moody’s upgrades IDBI Bank rating on improved solvency.
• India, China affecting world economy much more.
• India’s industrial activity likely to remain subdued in near term.

Key Due Dates:

• TDS return for Purchase of Property For the month of December 2018 is 30^thJanuary 2019.
• Due Date of GSTR-1 for Quarterly Return Filler of taxable supplies is 31st January 2019.

Quote of the Day:

In business ‘professionalism’ is not a tactic but a moral value.