CORPORATE AND PROFESSIONAL UPDATE April 29, 2016
CORPORATE AND PROFESSIONAL UPDATE April 29, 2016
DIRECT TAX:
Income Tax has issued a circular on Limitation for penalty proceedings under sections 271D and 271E of the Income-tax Act, 1961 vide circular No. 10/2016.
LTCG cannot be disallowed merely based on information received from DDIT. [Kamlesh Mundra vs. ITO (ITAT Mumbai)].
Interest paid for shares acquisition would partake character of shares cost. [DCIT vs. Fritz D. Silva ( ITAT Mumbai)].
No penalty for bonafide mistake in claiming both depreciation and deduction u/s. 24(a). [B. L. International vs. ACIT (ITAT Delhi)].
Disallowance u/s 14A – Held that – Identical issue had arisen in the earlier year as find that the AO had not mentioned as to how much expenditure was incurred by the assessee for earning tax free income. We are of the opinion that if the assessee had not incurred any expenditure to earn tax free income then the AO cannot invoke the provisions of section 14A r. w. Rule 8D of the Rules (Korn Ferry International Pvt. Ltd., DCIT-3 (2) , Mumbai Versus DCIT-3 (2) , Mumbai, Korn Ferry International Pvt. Ltd.)- 2016 (4) TMI 962 ITAT MUMBAI
The contributions made by the members to the assessee cannot be a subject matter of tax merely because the part of its excess of income over expenditure is invested in mutual funds. It is also not the case of the Revenue that the dividend received from mutual funds have not been offered to tax by the assessee. The concept of Mutual concerns not being subject to tax is based on the principle of no man can profit out of itself. Therefore the test to be satisfied before an association can be classified as a Mutual concern are complete identity between the members i.e. contributors and the participants, the action of the mutual concern must be in furtherance of its objectives and there must be no scope of profiteering by the contributors from a fund. (CIT vs. Air Cargo Agents Association Of India (Bombay High Court)
CBDT clarifies that officer below the rank of JCIT can’t initiate penalty proceedings u/s 271D or 271E SECTION 271D, READ WITH SECTION 271E, OF THE INCOME-TAX ACT, 1961 – FAILURE TO COMPLY WITH PROVISIONS OF SECTION 269SS – PENALTY FOR – COMMENCEMENT OF LIMITATION FOR PENALTY PROCEEDINGS UNDER SECTIONS 271D AND 271E CIRCULAR NO.9/DV/2016 [F.NO.279/MISC./M-116/2012-ITJ], DATED 26-4-2016
Demand couldn’t be raised even if assessee belatedly reversed credit on exempted goods[2016] 68 taxmann.com 252 (New Delhi – CESTAT) Mahindra & Mahindra Ltd. v. Commissioner of Central Excise
Additional payment even if made to the retiring partner in excess of capital account is not in nature of any profit or income within the meaning of sec.28(va) of the Act and it cannot be brought to tax as business income- (M/s. Sharadha Terry Products Ltd. Versus The Assistant Commissioner of Income Tax, Salary Circle-I, Coimbatore and Vica-Verssa – 2016 (4) TMI 1004 – ITAT CHENNAI).
Agricultural income as defined u/s 2(1A ) – The only explanation put forth by the assessee is that the income was generated by harvesting yield like natural grass or allowing seasonal farmer cum workmen to cultivate lands in shares is not sufficient enough to conclude the receipt as agricultural income- (Vijay H. Jaiswal: Prop M/s Three Circles Versus ACIT, 21 (2) , Mumbai – 2016 (4) TMI 1012 – ITAT MUMBAI)
TDS not deductible on tips collected by hotels and paid to staff [ITC Ltd. Gurgaon vs. Commissioner of Income Tax (TDS) {SC}].
Discount allowed to distributors by telecom Co. on sale of prepaid SIM cards isn’t commission, [2016] 68 taxmann.com 357 (Delhi – Trib.) Bharti Hexacom Ltd. v. Assistant Commissioner of Income-tax
No penalty for non deduction of tax based on CA certificate. [Smt. Aishwarya Rai Bachchan vs. Additional Commissioner of Income tax (ITAT Mumbai)].
Mobilization expenses to move asset to client premises allowable as revenue expenses. [DewanChand Ramsaran industries Pvt. Ltd. vs. ACIT (ITAT Mumbai)].
Delhi restaurants, migrating to new composition scheme, need not to pay tax on opening stock April 28, 2016
TDS on commission paid to a non-resident for services rendered outside India. [ CIT vs. Farida Leather Company (Madras HC)].
Updation of SCOMET list classifying export and import Items. Notification no. 05 / (2015-2020).
INDIRECT TAX:
Penalty under section 271(1)(c) – Held that – In the case under consideration although both the lower authorities have alleged that the assessee had furnished inaccurate particulars with a mala fide intention, the same has not been substantiated convincingly by the department so as to attract penalty. The only finding against the assessee is that she could not produce the relevant vouchers after a lapse of ten years.(Rekha Jindal Versus ITO, Ward-20 (4) , New Delhi)- 2016 (4) TMI 1039 – ITAT DELHI.
ST: If the appellant in the capacity of recipient of service files the refund application before the Central Excise Authorities it should be proper and maintainable under Section 11B of the Central Excise Act 1944 – M/s Chambal Fertilizers and Chemicals Ltd. Vs. CCE, Jaipur-I (2016 (4) TMI 845 – CESTAT New Delhi)
VAT & ST: Attachment of personal property – Since the source of acquisition of property cannot be traced to the funds of the company and since the dues are of a Private Limited company independent properties of the Director cannot be attached – Revtiben Nareshbhai Bangera Vs. CTO (2016 (4) TMI 178 Gujarat High Court)
Refund of Service tax paid in excess – Banking and Financial Services – Unjust enrichment – production of certificate of Chartered Accountant showing that excess amount collected had been refunded on 31.03.2004 and 27.10.2004 respectively – Held that – the evidence produced by the appellant before the appellate authority should be considered by the original authority. ( M/s. Kerala Venture Capital Funds (Pvt.) Ltd. Versus The Commissioner of Central Excise (Adjudication) , The Customs Excise & Service Tax Appellant Tribunal )- 2016 (4) TMI 940 – KERALA HIGH COURT
It was held that the activity of placing various food items, prepared by the appellants as well as various bought out readymade items, in a tray either at the time of placing the tray in the trolley or at the time of serving the passengers on board does not amount to manufacture of a new commodity as contemplated under section 2 (f) of Central Excise Act, 1944 and accordingly the Excise duty cannot be demanded on the total value of manufactured and bought products put in the tray. (Taj Sats Air Catering Ltd. Vs. CCE Delhi-II (CESTAT New Delhi)
Service Tax/Excise/Customs : Where assessee-respondent did not receive notice for hearing, Tribunal’s ex parte order, disposing of revenue’s appeal on merits in favour of revenue, was set aside and matter was remanded back to Tribunal [2016] 68 taxmann.com 251 (Punjab & Haryana) Mittal Construction Co. v. Commissioner of Central Excise
Job Work – Removal of drums without payment of duty – Held that – the Company was undertaking a job work. M/s. HPCL and will not allow its raw material to be utilized for the manufacture of drums for others or to allow to dispose of the production of drums in any manner other than to supply them. That is how the allegations in the show-cause notice regarding deliveries of drums to undisclosed parties was denied and termed as imaginary.(Ashok Patel, Deputy Managing Director, M/s Standard Drum And Barrel Manufacturing Co. Versus The Commissioner of Central Excise, Mumbai-II And Others)- 2016 (4) TMI 1070– BOMBAY HIGH COURT
FAQ on Company Law:
Question:- A Private Limited company accepted unsecured loan from its existing two Directors. This is exempt deposit under section 73 of the Companies Act, 2013. Subsequently above two Directors resigned from the Directorship of the Company. Is the loan becomes deposits after their resignation? Is the loan becomes repayable after resignation not to attract deposit Rules ?
Answer: Rule 2(c)(viii) of the Companies (Acceptance of Deposits) Rules 2014 provides that any amount received from a person who, at the time of receipt of amount, was director of Company shall not be treated as Deposits. So, there is no necessity to repay the loan as at the time of acceptance of loan the person who has given loan were directors and the money can be retained till the date of maturity.
COMPANY LAW:
Question:-We filed Form LLP Form-1 for the reservation of name of LLP on 08/02/2016. However the said Proposed name was duly approved by ROC but we were not able to file LLP Form-2 and now 60 days has been lapsed. But still that name is showing as not –expired. Should we proceed for further proceedings regarding incorporation or should we confirm from ROC office regarding the validity of approved name.
Answer: If the Company/LLP name was approved and the name expired between periods 25th March to 30th April 2016, the Name reservation date is extended till 10th May 2016.
Query: We filed Form INC-29 and there is resubmission but when we affixing DSC, the size of e-form automatically increase by 2 MB and there is pop-error as file size cannot exceed 5 MB. Kindly advice as is there any alternate way as its last date of resubmission is also approaching?
Answer: This is a technical issue on the part of new modified MCA Portal, you can compress the attachments and try accordingly.
Further as far as last date of resubmission is concerned – MCA has already made provision regarding extending resubmission due date. Now, the stakeholders shall be allowed to resubmit the e-form until 10th May 2016, in case the resubmission due date was between 25th March and 30th April 2016.
Pre-MEF 2016-17 data verification would be live. Please check at www.meficai.org from 27/04/2016.
Govt. mandates Panic Button and GPS in mobile phone.
Anti-dumping duty on synchronous digital hierarchy transmission equipment: Notification No. 15/2016-Customs.
Key Dates:
- Deposit of TDS deducted during during March (Other than u/s 194IA in case of purchase of property) through Challan No. ITNS-281- 30/04/2016
- Excise Return ER-7 for FY 2014-15 by other excise units- 30/04/2016
- E-Filling of information of declarations in Form 60 received upto 31stMarch in Form 61-30/04/2016
- Filling of option to avail composition scheme in DVAT-01- 30/04/2016
- Filling of withdrawal from composition Scheme in DVAT-03 – 30/04/2016
- Today (30.04.2016) is due date to deposit TDS deducted during March, 2016. TDS statements for Q4 by all deductors to be filed by 15.05.2016.
- Today (30.04.2016) is due date to file excise return for F.Y. 2014-15 in ER-5 (By units paying duty above 1Cr) & ER-7 (by other units).
- Filing of DVAT return verification form for quarter ended March where return not signed with digital signature: 28/04/2016
- Return of DVAT TDS for quarter ending March: 28/04/2016
- Return by scheduled banks branches in delhi engaged in sale of silver, gold, repossessed vehicles for quarter ending March: 28/04/2016
- Service Tax Return for half year ended March in ST-3 -29/04/2016
- Success comes to those who have the will power to win over their snooze buttons.
Satisfaction is the highest level of happiness and it is easily attained when you have no expectations from anyone.
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