Daily Updates

INCOME TAX ACT

SECTION 40(a)(i)

BUSINESS DISALLOWANCE – INTEREST, ETC., PAYABLE OUTSIDE INDIA

Commission payments to the nonresident agents are not taxable in India, as the agents are remaining outside, services are rendered abroad and payments are also made abroad. The services rendered by the non-resident agent could at best be called as a service for completion of the export commitment and would not fall within the definition of "fees for technical services" and, therefore, section 9 was not applicable and, consequently, section 195 did not come into play. Therefore, the disallowance made by the Assessing Officer u/s 40(a)(i) towards export commission paid by the assessee to the non-resident was rightly deleted by the Tribunal. In GE India Technology's case, it was held by SC that the tax deducted at source obligations under Section 195 (1) of the Act arises, only if the payment is chargeable to tax in the hands of the non-resident recipient. When the transaction does not attract the provisions of Section 9 of the Act, then there is no question of applying Explanation 4 to Section 9 of the Act. Consequently, the ratio of SC decision in G.E. India Technology's case would apply notwithstanding insertion of Explanation 4 to Section 9 (1) (i) of the Act with corresponding introduction of Explanation 2 to Section 195 (1) of the Act, both by the Finance Act, 2012, with retrospective effect from 01.04.1962 - [2016] 66 taxmann.com 321 (Madras)

SECTION 74

LOSSES UNDER HEAD CAPITAL GAINS

Setting off deemed short term capital gain : Where deemed short term capital gain arose on account of sale of depreciable assets that was held for a period to which long term capital gain would apply, assessee would be entitled to claim setting off said gain against brought forward long term capital losses and unabsorbed depreciation - [2016] 66 taxmann.com 330 (Bombay)

SECTION 132A

SEARCH & SEIZURE - REQUISITION OF BOOKS OF ACCOUNT, ETC.

Reassessment : Accounts which were duly verified during regular assessment of assessee could not be reappreciated merely because further a search was conducted in premises of assessee as same would amount to reopening of concluded assessment - [2016] 66 taxmann.com 264 (Karnataka)

COMPANIES ACT

SECTION 445

WINDING UP - COPY OF WINDING UP ORDER TO BE FILED WITH REGISTRAR

Contract of Company (in liquidation) with its employees comes to an end on passing of winding up order - [2016] 66 taxmann.com 243 (Bombay)

SECTION 529A

WINDING UP - OVERRIDING PREFERENTIAL PAYMENTS

Bonus is not included in category of wages under sections 529 and 529A and cannot be accorded priority - [2016] 66 taxmann.com 243 (Bombay)

CENTRAL EXCISE ACT

SECTION 35C

APPEALS - ORDERS OF - APPELLATE TRIBUNAL

Remand order of Tribunal may be 'conditional' i.e., Tribunal may impose suitable conditions including making of certain deposit as a condition of remanding matter back to adjudicating authority, only if same is necessary due to reasons attributed to assessee - [2016] 66 taxmann.com 268 (Gujarat)

CUSTOMS ACT

SECTION 27

REFUND – GENERAL

Refund of customs duty paid by SEZ units is governed by section 27 of Customs Act; hence, said refund claim units would lie before Customs Authorities and not before SEZ authorities under the SEZ Act/rules - [2016] 66 taxmann.com 271 (Gujarat)

SECTION 130E

APPEALS - MAINTAINABILITY OF - SUPREME COURT

Where High Court has dismissed review petition against its own judgment, then, proper course is to challenge 'main order'. If 'main order' of High Court is not challenged, appeal/special leave petition against 'order of High Court dismissing review petition' is not maintainable before Supreme Court - [2016] 66 taxmann.com 269 (SC)

STATUTES

DIRECT TAX LAWS

Section 139A of the Income-tax Act, 1961 - Permanent Account Number - Jurisdiction of PANs of trusts submitting ITR-7 for assessment years 2014-15 and 2015-16 as on 28-1-2016 - LETTER F.NO.DGIT(S)/DIT(S)-3/AST/CIT EXEMPTION JURIS/98/2015-16, DATED 22-2-2016

CORPORATE LAWS

Chartered Accountants Procedures of Meetings of Quality Review Board, and Terms and Conditions of Service and Allowances of the Chairperson and Members of the Board (Amendment) Rules, 2016 - Amendment in rule 9 - NOTIFICATION NO. GSR 148(E) [F.NO.1/30/2015/PI], DATED 8-2-2016 Thanks & Regards, Meetesh Shiroya