Direct Tax:-

IT: Repayment of loan – violation u/s 269SS – journal entries – there was no payment in cash either by the assessee or on its behalf. No penalty – CIT-II, Kanpur Vs Apex Finlease Ltd. C/O M/s M.L. Puri & Co. (2016 (10) TMI 636 – Allahabad High Court)

IT: When the property was shown as stock in trade it should not be considered for the purpose of exemption u/s 54F – CIT, ACIT Vs Shri Gregory Mathias (2016 (10) TMI 635 – Karnataka High Court)

CBDT extended the ‘due date’ for filing ITR and Tax Audit Reports for AY 2016-2017 for all categories of taxpayers in the state of J&K to 31. 12. 2016.

Bompaby High Court in the below citied case held that AO cannot rely on Instruction No.1/2015 dated 13.01.2015 to withhold refunds as the same has been struck down by the Delhi High Court in Tata Teleservices & the same is binding on all AOs across the Country. Action of the AO in not giving reasons for not processing the refund application is “most disturbing” and stating that he will wait till the last date is “preposterous”. Action of the AO suggests that it is not enough that the deity (Act) is pleased but the priest (AO) must also be pleased.(Group M. MediaIndia Pvt. Ltd. Vs. UOI)

Bangalore ITAT allows exemption u/s 11 to assessee-trust for AYs 2004-05 to 2007-08 despite Sec 12A registration granted only w.e.f. April 1, 2008, holds first proviso to Sec 12A(2) inserted vide Finance Act, 2014 (which provides for roll-back of registration for earlier years) as retrospective in nature. [TS-561-ITAT-2016(Bang)]

CBDT issues the income-tax (28th Amendment), rules, 2016, effective from 01.06.2016. Final rules on buy-back of shares notified. CBDT notification of 17.10.2016.

CBDT issued Circular No.35 of 2016 dated 13.10.2016 on applicability of TDS provisions of section 194-I of the income-tax act, 1961 on lump sum lease premium paid for acquisition of long term lease-regarding.

Section 14A cannot be invoked, where no regular activities were undertaken by the assessee in respect of the investments to earn exempt income and no change in the investments during the year.[M/s Power Grid Corp of India Ltd. vs. DCIT, ITAT – Delhi].

Taxability- compulsory acquisition of capital asset

More than one business & filing of tax audit report with return

Indirect Tax:-

SC allows Revenue appeal, sets aside CESTAT order to the extent penalty levied u/s 11AC of Central Excise Act was reduced as against confirmed duty demand. [TS-418-SC-2016-EXC]

CESTAT holds that financial advisory services in respect of energy, banking, transport & urban infrastructure shall be taxable as “Banking and Other Financial Services” (BoFS) w.e.f. August 2002, cannot be classified as “Management Consultancy Services” (MCS) for prior period . [TS-416-CESTAT-2016-ST]

ST/ED: CENVAT credit – capital goods – installation of bulk milk coolers & DG sets at milk collection centres to store milk – Credit allowed – Glaxo Smithkline Consumer Health Ltd. Vs CCE, Chandigarh-II (2016 (10) TMI 649 – CESTAT Chandigarh)

CBEC issued instructions for rationalization of procedures regarding handling exporters obligations under EPCG authorizations.

CBEC mission zero has been launched there with the objective of sharply reducing the pendency of adjudications, refunds, rebates and drawback in a time bound manner.


Concept of Input Service Distributor in GST

Q 8. Whether SGST credit can be distributed as IGST credit by an ISD to units located in different States?

Ans. Yes, an ISD can distribute SGST credit as IGST for the units located in different States.(Section 17(2)

Q 9. Whether the ISD can distribute the CGST and IGST Credit as CGST credit?

Ans. Yes, CGST and IGST credit can be distributed as CGST credit by an ISD for the units located in same State.

Q 10. Whether the SGST and IGST Credit can be distributed as SGST credit?

Ans. Yes, ISD can distribute SGST and IGST credit for the units located in same State.

Q 11. What are the documents through which the credit can be distributed by an ISD?

Ans. The document under which the credit can be distributed is yet to be prescribed. The Act provides that the credit can be distributed only through prescribed document.

Q 12. How to distribute common credit among all the units of an ISD?

Ans. The common credit used by all the units can be distributed by ISD on pro rata basis i.e. based on the turnover of each unit to the aggregate turnover of all the units to which credit is distributed.


GST Council meet ended in New Delhi after the States failed to come to a consensus on the rates, will meet again in the first week of  Nov’ 2016.

Under GST large taxpayer units to be shut down under GST at all locations i.e. Bengaluru, Chennai, Delhi, Kolkata & Mumbai, due to their failure.

Under GST every advance receipt against supplies shall get a transaction id which is to be mentioned against invoice issued later in GSTR-1.

Under GST Summary of invoices issued to be given in GSTR-1(including invoices issued for inward supplies from Unregistered Persons liable to Reverse Charge).

Central Govt proposes 26% peak rate for GST as Four-tier structure may be proposed at GST Council meet started; almost 20-25% of all taxable goods may come under the maximum rate.

FAQ on Company Law:

Query: Can a foreign resident form an OPC in India with Indian resident as his nominee?

Answer: As per Rule 3(1) of the Companies (Incorporation) Rules 2014, only a natural person who is an Indian citizen and resident in India shall be eligible to incorporate OPC .

No Body Corporate and Foreign Citizen resident in India is allowed to form OPC.


MCA is likely to update LLP Forms, LLP 3 & LLP 4 w.e.f. TODAY (20 Oct  2016)

E-forms- (SPICe) Simplified Proforma for Incorporating Companies Electronically and electronic AOA (SPICe AOA) revised on MCA portal w.e.f. 18.10.2016.

MCA is expected to revise the version of e-Forms: Form CHG-8, Form AOC-4 and Form 20-B  w.e.f. 22.10.2016.



has issued Guidance Note on audit of Consolidated Financial Statements (Revised 2016).

ICAI issued guidance note on audit of consolidated financial statements (Revised 2016). For details visit

NCLT has designated its members in different branches of the tribunal to hear appeal against order of registrar or such other officer officiating as the registrar of the Bench


SEBI has issued a circular easing rules on bullion as collateral now keep a higher quantum of up to 30 per cent of their total liquid assets bullion as commodities collateral.

ESIC Hikes wage ceiling from Rs.15000 to Rs.21000 w.e.f 1st Oct 2016

Key Dates:

Payment of ESI for the month of September :-21/10/2016

E-Payment of DVAT & CST tax for the month ended September- 21/10/2016

Issue of DVAT Certificate for deduction made in the month of September-22/10/2016

  • Silence is the strong fence around wisdom, if your foot slips, you can re-gain your balance, but if your tongue slips, you can never re-build your image again.
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