CORPORATE AND PROFESSIONAL UPDATE DATED MARCH 29, 2016

CORPORATE AND PROFESSIONAL UPDATE DATED MARCH 29, 2016

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DIRECT TAX

  • Income Tax: Disallowance being 1/10th Global Depository Receipts – whether the GDR is nothing but increase in the capital and expenses relating to the same is capital in nature? – Section 35D(2)(iv) categorically deals with the expenses in connection with the issue, or public subscription of shares and debentures of the Company. – grievance of the AO is ill conceived – Tri
  • Income Tax: Interest accruing on FDRs treated as income from other sources – since the assessee is not having any other source of income de horse this business undertaking which was not set up, interest income earned by the assessee till 31/03/2011 cannot be brought to tax – to be reduced from the cost of project – Tri
  • Income Tax: Reopening of assessment – receipt of accommodation entries – without forming a prima facie opinion, on the basis of such material that income has escaped assessment the AO can not assume valid jurisdiction to initiate proceedings and to issue notice u/s 147/148 – Notice u/s 148 quashed – Tri

INDIRECT TAX             

  • Service Tax: Transport of passengers on domestic routes through its helicopters – the contracts were invariably between the appellant and the charter parties who hired appellant’s helicopters for the purpose of transporting passengers. – prima facie services clearly fall within the ambit of STGU – Tri
  • Service Tax: Eligibility for refund of accumulated CENVAT credit – Rule 5 of CCR – there was no taxability of any service provided by respondent prior to registration. Accordingly, input credit was not possible to be utilized for which that was accumulated. – credits were accumulated prior to registration – No refund can be granted – Tri
  • Central Excise: SSI Exemption – Clubbing of clearance value of the proprietaryship firm with the private limited company -, it is evident from the records that there was no manufacturing activity in other units – clubbing upheld – Tri
  • Customs: Seeking conversion of free shipping bills to Drawback shipping bills – a power given by Sec 149 of the Customs Act 1962 to the officers under a statute can not be curtailed by a Circular issued by CBEC – Tri
  • VAT and Sales Tax: Adequate rebut of Legal presumption – Deemed sale drawn by the authorities under Section 46(15)(d) of the AGST Act – the authorities have failed to discharge the obligation – HC

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CORPORATE AND PROFESSIONAL UPDATE DATED MARCH 17,2016

CORPORATE AND PROFESSIONAL UPDATE DATED MARCH 17,201629

DIRECT TAX

  • Income Tax: Income-tax (5th Amendment) Rules, 2016) – Rules in respect of fund manager regime under section 9A of the Income-tax Act, 1961 – Notification
  • Income Tax: Addition u/s 68 – merely because the bank statement an ITR of the lender were not submitted, in spite of submitting balance sheet and profit and loss account of the company, confirmation stating its PAN and also transactions are through account payee cheques and in absence of any inquiry, we are of the view that no addition can be made in the hands of the assessee
  • Income Tax: Penalty u/s 271C – non deduction of tds u/s 194LA – there was no mala fide intention on the part of the assessee for non-deduction of TDS since it had recovered the TDS from the concerned as soon as the violation of law was brought into assessee’s notice
  • Income Tax: Agricultural lands in terms of Sec 2(14) – Though the circumstance that the land is classified as Agricultural in the revenue records and the Village Panchayats President, Navallur, has certified that the land is away from municipality, other circumstances proves otherwise – Held as not an agriculture land
  • Income Tax: The assessee had a dividend income (income from other sources). Thus the assessee fell within the purview of the exception carved out in the explanation to Section 73 and that consequently the assessee would not be deemed to be carrying on a speculation business for the purpose of Sec. 73(1).
  • Income Tax: Addition made on inflation of purchases of raw material u/s. 69 – CIT(A) has wrongly relied on the input output consumption ratio – addition deleted

INDIRECT TAX            

  • Service Tax: Validity of Tribunal’s order waiving the penalty – the question of applicability of section 80 w.e.f. 14-5-2015 has not been examined by the Tribunal at all. There is rather no reference to Section 80 of the Finance Act, 1994. As the Tribunal’s order is cryptic and the reasons are wholly unsatisfactory, needs to be quashed and set aside – HC
  • Central Excise: Differential duty demand – demand arose on account of the fact that the appellant cleared the goods from its depot at a price higher than the price at which the duty was paid at the time of clearance from the factory – demand confirmed
  • Central Excise: SSI Exemption – The notification as amended was very clear and unambiguous. In the era of self assessment, it is the responsibility of the assessee to correctly determine the duty as per law. It is seen that the appellant failed to do so in this case
  • Central Excise: Denial of Cenvat credit on capital goods – stock taking was done by way of eye estimation – the allegation of shortage of raw materials, does not stand. – demand set aside
  • Central Excise: Refund claim – duty liability subsequent to clearance of their products – unjust enrichment – when duty is paid after clearance of goods, on insistence of anti-evasion branch, burden of duty is not passed on to the customers – refund allowed
  • Central Excise: Differential duty – as the appellant was clearing the goods on payment of duty and subsequently on their own revised the price and discharged the differential duty there seems to be no violation of any provisions – Demand on interest confirmed – But, no penalty be levied
  • Central Excise: MRP based valuation – removal of goods without packing – It is not the packaging that determines the applicability of mandate of affixing the ‘retail sale price’ but the product itself. Consequences of non-conforming packaging are not escapement from the mandate but the enforcement of penal detriment – appellant is eligible for the abatement
  • Central Excise: The duty can be demanded from a manufacturer of the goods as it is a factum record that the impugned goods have been fabricated on job work basis by the contractors, therefore, as per the Central Excise provision, the appellant cannot be the manufacturer of the said goods.
  • Customs: Rejection of refund claim – Period of limitation – Once the appellant has been given acknowledgement unless until this held to be fake or forged, the said acknowledgement has to be accepted as proof of filing the refund claim.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances; Hope the information will assist you in your Professional endeavors. For query or help, contact:  info@carajput.com or call at 9555555480 Continue reading

CORPORATE AND PROFESSIONAL UPDATE DATED MARCH 11, 2016

CORPORATE AND PROFESSIONAL UPDATE DATED MARCH 11, 2016

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DIRECT TAX

  • Income Tax: Qualification for exemption u/s 10(5) – LTC paid to the employees involving foreign travel – TDS on the payment of LTC to the employees – Revenue has rightly held the assessee to be in default, as the assessee has not deducted TDS intentionally on the reimbursement of expenditure incurred on LTC/LFC.
  • Income Tax: TDS u/s 195 – the assessee can not be said to have paid the consideration for use of or the right to use copyright but has simply purchased the copyrighted work embedded in the CD- ROM which can be said to be sale of ‘good’ by the owner. The consideration paid by the assessee thus as per the clauses of DTAA can not be said to be royalty
  • Income Tax: Non service of notice u/s 143(2) – Apparently, the notice was sent on the wrong address as the assessee has categorically given his address in the relevant return of income – Presumption can only be raised against the assessee for service of notice u/s 143(2) when the notice was sent on the correct address.
  • Income Tax: Rejection of books of accounts – denial of natural justice – Assessing Officer has not provided sufficient opportunity of being heard to the assessee rather rejected the books of accounts arbitrarily and declared the bills filed by the assessee as bogus unilaterally. – Matter remanded back
  • Income Tax: Revision u/s 263 – AO has to consider the provisions applicable under Rule 8D effective from assessment year 2008-09. But the AO made disallowance by following Co-ordinate Bench decision for earlier assessment year. It is apparent from facts and circumstances the order of the Assessing Officer is erroneous and prejudicial to the interest of Revenue – Revision proceedings are correct
  • Income Tax: Penalty u/s 271(1)(c) – the money has been appropriated by ICICI Bank after collection and the assessee has claimed the deficiency in realization as Bad debts. The income of 2% was not considered in profit and loss account by assessee. – The explanations given by the assessee cannot be considered as bonafide and assessee tried to conceal the income by misrepresenting the case – penalty confirmed
  • Income Tax: Eligibility of deduction u/s 80IC on freezing charges – freezing charges earned by the assessee is an integral part of the processing of vegetables and therefore is eligible for deduction u/s 80IC of the Act
  • Income Tax: Capital gains – calculation of number of trees – The evidence filed by the assessee in terms of certificate of Tehsildar or that of a retired IAS officer is of no evidentiary value, specially in the presence of Jamabandi, which is an actual proof of land holding and cultivation thereon.

INDIRECT TAX

  • Service Tax: ST-3 return form amended to insert the columns related to Swachh Bharat Cess – Service Tax (Second Amendment) Rules, 2016 – Notification
  • Central Excise: Extended period of limitation – When the material facts are disclosed, a particular classification followed by the appellant will not make a case for suppression – the appeal in so far as it relates to extended period is allowed.
  • Central Excise: SSI Exemption – Manufacture and clearing dutiable goods with the brand name or trade name of another person – for denial of exemption the brand name or trade name has a wider connotation, registration being not mandatory
  • Central Excise: Demand of duty for clearance of waste and scrap – the transparency in the appellant’s dispatch of waste and scrap and receiving the granules back cannot be questioned only on the ground that the Notification 214/86-CE is not applicable to waste and scrap.
  • Central Excise: Liability to pay the excise duty – consignee does not sent the certificate of re-warehousing within the period of 90 days – department cannot ask the appellant to pay the duty as the department cannot recover the duty twice for the same consignment and moreover as per the sub-clause (3) of Rule 20 it is the responsibility of the buyer to pay the duty
  • Customs: Valuation -As the Supply Agreement is consistent with the Technology Transfer Agreement, and the supplier had the right to terminate the supplies in case of non-payment of royalties, the payment of royalty is a condition of sale and includible in the assessable value
  • Customs: Invokation of Rule 9(1)(c) – Royalty and Technical know-how fee paid on domestic sale – Whether includible or not in the value of goods imported – Held that: Not to be included
  • Customs: Contravention of provisions of Regulation 13(e) and 13(o) of CHA Licensing Regulation, 2004. – CHA has not even claimed that it had ever verified the existence of the importer at the given address which means the appellant has failed to fulfil the requirement of Regulation 13(o) ibid. – Action against CHA sustained
  • Customs: Entitlement – Benefit of Notification No. 12/2012-Cus, – beyond doubt that ‘bulk drugs’ are also ‘drugs’ – benefit of exemption allowed

OTHER UPDATES

  • EPS: The Union Govt. after exempting EPF, considering a proposal to make it mandatory for Employer to route most of its saving to Employee Pension Scheme (EPS) a move for creating pensioned society.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances; Hope the information will assist you in your Professional endeavors. For query or help, contact: info@carajput.com or call at 9555555480 Continue reading