Daily Updates and News

INCOME TAX ACT

SECTION 12AA

CHARITABLE OR RELIGIOUS TRUST - REGISTRATION PROCEDURE

Cancellation of registration : SLP granted against High Court's ruling that in absence of any finding that activities of trust are not genuine or they are not being carried out in accordance with objects of trust, registration granted to trust under section 12A cannot be cancelled on ground that receipts from commercial activities are more compared to overall receipts of charitable organization - [2015] 64 taxmann.com 380 (SC)

SECTION 36(1)(vii)

BAD DEBTS

Writing off of bad debts : SLP granted against High Court's ruling that where accounts of assessee were open and subject to correction by auditors, bad debts could be written off even after closure of accounting period and same was to be allowed under section 36(1)(vii) - [2015] 64 taxmann.com 379 (SC)

SECTION 54F

CAPITAL GAINS - EXEMPTION OF, IN CASE OF INVESTMENT IN RESIDENTIAL HOUSE

Where assessee had fulfilled all conditions of investment of equivalent amount of capital gain in purchase of residential house qualifying for relief under section 54F, she would be entitled to exemption under section 54F for total investment irrespective of fact that part of such investment came from borrowed money - [2015] 64 taxmann.com 382 (Hyderabad - Trib.)

SECTION 92C

TRANSFER PRICING - COMPUTATION OF ARM’S LENGTH PRICE

Comparables and adjustments/Comparables – Illustrations : Matter was sent back to file of TPO/Assessing Officer when there was a specific challenge to calculation of OP/TC of relevant segment of comparable and TPO had not mentioned how he determined its percentage of profit - [2015] 64 taxmann.com 285 (Delhi - Trib.)

Comprables and adjustments/Adjustments - Operating profit : If otherwise operating expenses incurred in preceding year, though capitalized, as deferred revenue expenditure are before starting point of rendering services to AE and bear no relation with such services, then part amount of such expenses claimed as deduction during year, cannot be treated as operating expense; however, if expenses are in relation to such services they would be operating expenses - [2015] 64 taxmann.com 285 (Delhi - Trib.)

SECTION 115JA

MINIMUM ALTERNATE TAX

Deferred expenditure : SLP dismissed against High Court's ruling that no disallowance of actual expenditure for computing MAT just because it was shown as deferred revenue expenditure for shareholders - [2015] 64 taxmann.com 378 (SC)

SECTION 251

COMMISSIONER (APPEALS) - POWERS OF

Enhancement of income : In terms of section 251(2), issuance of show cause notice to assessee stating defects, allegation and manner of determining amount of enhancement and then fixing date of hearing after affording reasonable time to assessee to rebut allegations and then passing a speaking order making enhancement of income is mandatory - [2015] 64 taxmann.com 381 (Delhi - Trib.)

SECTION 268A

FILING OF APPEAL OR APPLICATION FOR REFERENCE BY INCOME-TAX AUTHORITY

Monetary limit : Where tax effect of appeal filed by revenue before Tribunal was below prescribed monetary limit but revenue could not produce document regarding audit objection about relevant transaction, exceptions provided in clause 8(c) of Instruction No. 3, could not be invoke so as to maintain appeal - [2015] 64 taxmann.com 365 (Madras)

COMPETITION ACT

SECTION 4

PROHIBITION OF ABUSE OF DOMINANT POSITION

Where there were other prominent brands of laptops available in India, it appeared that consumers in India had adequate choice and OP-computer manufacturer/seller did not enjoy a position of strength, hence no contravention of provisions of section 4 was made out against OP - [2015] 64 taxmann.com 387 (CCI)

SERVICE TAX

SECTION 65(104c)

TAXABLE SERVICES - BUSINESS SUPPORT SERVICES

Taking over management/running of business and bearing profit/loss on own account does not amount to 'business support services' and, therefore, profit so earned cannot be charged to service tax - [2015] 64 taxmann.com 374 (Bombay)

SECTION 78

PENALTY - FOR EVASION OF DUTY/TAX

To avail benefit of reduced penalty, payments must be made within 30 days from 'adjudication order' and not within 30 days from 'appellate order'; therefore, appellate authority cannot extend benefit of reduced penalty at appellate stage - [2015] 64 taxmann.com 376 (Delhi)

CENTRAL EXCISE ACT

SECTION 5A

EXEMPTIONS - CENTRAL EXCISE - SSI/THRESHOLD EXEMPTION

Mere sharing of certain facilities by two assessees cannot lead to holding one unit as dummy of another, where both assessees are having full manufacturing facilities - [2015] 64 taxmann.com 375 (Punjab & Haryana)

SECTION 37B

CIRCULARS/INSTRUCTIONS TO DEPARTMENTAL OFFICERS

Adjudicating authority imposing penalty under section 78 need not spell out option to pay reduced penalty in adjudication order itself and adjudication order cannot be regarded as invalid. - [2015] 64 taxmann.com 376 (Delhi)

CST & VAT

SECTION 7 OF HARYANA VALUE ADDED TAX ACT, 2003

CLASSIFICATION OF GOODS

Methyl parathion, cartap hydrochloride, acephate, acetamiprid, imidacloprid, pretilachlor, paraquat dichloride and carbendazim sold by assessee were covered under Entry No. 38B of Schedule B of Haryana VAT Act - [2015] 64 taxmann.com 372 (Punjab & Haryana)

STATUTES

CORPORATE LAWS

Agreements with adequate number of service providers widespread geographically - CIRCULAR NO.IRDA/HLT/REG/CIR/001/01/2016, DATED 4-1-2016

Master Direction – Opening and maintenance of Rupee/Foreign Currency Vostro Accounts of Non-Resident Exchange Houses - FED MASTER DIRECTION NO.2 (2015-16), DATED 1-1-2016

INDIRECT TAX LAWS (ST.EX.CUS. & (CST & VAT))

Reduction of Government Litigation – Providing Monetary limits for filing Appeals by Department before CESTAT/High Courts and Supreme Court – Clarification - INSTRUCTION F.NO.390/MISC./163/2010-JC, DATED 1-1-2016   Thanks & Regards, Meetesh Shiroya