CORPORATE AND PROFESSIONAL UPDATE DATED MARCH 5,2016

CORPORATE AND PROFESSIONAL UPDATE DATED MARCH 5,2016

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Direct Tax

  • TRANSFER PRICING – COMPUTATION OF ARM’S LENGTH PRICE: Where assessee had benchmarked its international transactions on TNMM basis and TPO had neither disputed assessee’s claim that TNMM was most appropriate method, nor comparables selected by assessee, it was not open for TPO to reject benchmarking done by assessee and make adhoc ALP additions in value of international transactions – [2016]  16 (Mumbai – Trib.)
  • ON BORROWED CAPITAL: Where assessee paid interest on borrowed capital which was used for acquisition of windmill for extension of existing business of generation of electricity through windmill, interest could not be allowed till capital asset acquired by assessee was put to use – [2016] INTEREST 277 (Chennai – Trib.)
  • UTILIZATION OF CAPITAL GAINS : Where assessee purchased a vacant site but couldn’t complete construction of house within prescribed period of three years to avail exemption from capital gain, whole of capital gain was liable to be taxed in previous year in which period of three years expired from date of sale of original asset

Indirect Tax

  • Following activities undertaken by the applicant would not amount to manufacture or deemed manufacture under Section 2(f) of the Central Excise Act 1944 namely; Inspection testing and installing batteries Cleaning lint brushing and deodorizing Touching up and re-stitching Filing debundling and jewellery correction Activities related to spectacles and frames Folding hanging and ironing Polishing shinning and coating Tagging Freebies Protective stickering Placing the products in original box Inserting warranty card Inserting moisture absorbing tablets Inserting books mark and Replacing shoe laces- (/s Amazon Seller Services Private Limited, Bangalore Versus The Commissioner of Central Excise, Thane-I – 2016 (3) TMI 69 – AUTHORITY FOR ADVANCE RULINGS).
  • Claim of interest on delayed Refund – delay in grant of refund – relevant date to be computed from the date of application of refund or from the date of rectification of defect in the refund application – The adjudicatory process by no stretch of imagination can be carried on beyond three months. It is required to be concluded within three months – Interest allowed from the date of application- (Union of India & Others Versus M/s Hamdard (Waqf) Laboratories – 2016 (3) TMI 68 – SUPREME COURT)

MCA Updates

SHARES – POWER OF COMPANY TO PURCHASE ITS OWN SECURITIES: In law, petitioner is entitled to buy back its own shares by means of a scheme under section 391 read with sections 100 – 104 of the Companies Act, 1956 , scheme cannot be said to be a colourable device to evade income tax, it is a legally permissible procedure which petitioner is entitled to follow to buy back its shares

Key Dates

E-Payment of Service Tax for Feb by companies: 06/03/2016

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