Daily Updates and News

INCOME TAX ACT

SECTION 2(28A)

INTEREST

Liquidated damages : Where under loan agreement an additional obligation was cast upon borrower to pay penal interest in event of committing default in repayment of loan, penal interest, as liquidated damages, would be 'interest' under section 2(28A) eligible to exemption under section 10(23C) - [2016] 67 taxmann.com 61 (Madras)

SECTION 10(23G)

INFRASTRUCTURE CAPITAL FUNDS/COMPANY, ETC.

Debenture trusteeship fee : Where for assessment years 2000-01 and 2002-03 debenture trusteeship fee was exempted under section 10(23G), it would not be proper to deny it for assessment year 2001-02 - [2016] 67 taxmann.com 61 (Madras)

SECTION 35D

PRELIMINARY EXPENSES

Successive units, expenses on : Where no proof existed to show amount raised through public issue was used for capital expansion, disallowance of expenses on public issue was valid - [2016] 67 taxmann.com 59 (Madras)

SECTION 36(1)(vii)

BAD DEBTS

Section 36(i)(viia)(c) v. section 36(1)(viii) : It could not be held that deduction under section 36(1)(viii) would be computed first before applying deduction under section 36(1)(viia)(c); each of clauses of section 36(1) is independent and does not depend upon other clause for extension of benefit - [2016] 67 taxmann.com 61 (Madras)

SECTION 36(2)

BAD DEBTS

Loan : Written off part of debt is not admissible as 'bad debt' if debt has not been incurred while purchasing or selling goods in which assessee deals with - [2016] 67 taxmann.com 59 (Madras)

SECTION 37(4)

GUEST HOUSE EXPENSES

Where Tribunal disallowed maintenance expense, depreciation and rent paid in respect of guest house by relying upon Supreme Court's decision in Britannia Industries Ltd. v. CIT [2005] 278 ITR 546/148 Taxman 468, findings of Tribunal couldn't be interfered with - [2016] 67 taxmann.com 59 (Madras)

SECTION 80HHC

DEDUCTIONS – EXPORTERS

Income, nature of : Where Assessing Officer did not determine nature of income before disallowing deduction under section 80HHC, Tribunal was justified in remitting matter back - [2016] 67 taxmann.com 59 (Madras)

SECTION 201

DEDUCTION OF TAX AT SOURCE – CONSEQUENCE OF FAILURE TO DEDUCT OR PAY

There is no question of 'harmonious construction' of a CBDT Circular issued by the CBDT. At best, it is an external aid of construction of a provision in the Income-Tax Act. It is well settled that if a Circular issued by the Department favours an Assessee then it should be so done even where such interpretation goes contrary to the legislative intent. The contention of Revenue that the CBDT Circular 5 of 2010 has to be harmoniously construed with Section 201(3) of the Act to glean an intention to permit the Department to initiate cases four years earlier than 31st March, 2011.This contention cannot be accepted. The plain words in Circular "pending cases", in respect of which orders have to be passed in terms of the proviso to Section 201(3) before 31st March 2011" being favourable to the assessee must be given effect even if contrary to the legislative intent of the proviso to section 201(3) - [2016] 67 taxmann.com 124 (Delhi)

SECTION 271(1)(c)

PENALTY - FOR CONCEALMENT OF INCOME

Disallowance of claim, effect of : Where assessee received interest with amount of refund but did not include it in his profit and loss account under a bona fide belief that since matter was subjudice, it was not be included in profit and loss account but disclosed same in notes to accounts it could not be said that assesse had furnished inaccurate particulars of income - [2016] 67 taxmann.com 60 (Calcutta)

CST & VAT

SECTION 60 OF DELHI VALUE ADDED TAX ACT, 2004

ACCOUNTS AND AUDIT - POWER TO ENTER PREMISES AND SEIZE RECORDS AND GOODS

Where Assessing Authority by an order passed under section 60(2)(f) had sealed three premises of assessee on account of failure to produce records as demanded by notice issued under section 59 and thereafter he by an order passed under section 60(4) required assessee to deposit Rs. 600 crores as a condition for de-sealing of said premises, impugned orders were unsustainable in law - [2016] 67 taxmann.com 50 (Delhi)

HOT RE-ROLLING STEEL MILLS ANNUAL CAPACITY DETERMINATION RULES, 1997

RULE 3

ANNUAL CAPACITY OF PRODUCTION - DETERMINATION OF

Where assessee was involved in manufacturing of Hot re-rolled products of non-alloy steel and it filed declaration claiming that furnace installed in factory was batch type and Commissioner, based on a certificate issued by NISST, concluded that furnace was pusher type, since assessee had not lead any rebuttal evidence, finding of Commissioner was proper and correct - [2016] 67 taxmann.com 64 (Andhra Pradesh)

STATUTES

CORPORATE LAWS

Introduction of Exchange Traded Cross Currency Derivatives Contracts on EUR-USD, GBP-USD and USD-JPY Currency Pairs and Exchange Traded Option Contracts on EUR-INR, GBP-INR and JPY-INR Currency Pairs -CIRCULAR NO.SEBI/HO/MRD/DP/CIR/P/2016/0000000038, DATED 9-3-2016

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

Odisha Value Added Tax (Amendment) Rules, 2016 – Amendment in rules 6, 9, 27, 27A, 30, 40, 41, 45, 49, 50, 81, 86, 87 & 125; Substitution of Rules 33, 65, Form VAT-101, Form VAT-101C, VAT-306A, Form VAT-312, Form VAT-320A, Form VAT-402A; omission of rule 8, 28, 32, 48, Form VAT-102, Form VAT-601, Form VAT-602, Form VAT-603, Form VAT-603A and insertion of rules 11A, 49A, 49B, 59A, 66A, FORM VAT-202A, FORM VAT-303A, FORM VAT-601A, FORM VAT-602A & Form VAT-605B - NOTIFICATION NO.1465-FIN-CT1-TAX-0001-2013, DATED 16-1-2016

Chhattisgarh Value Added Tax Rules, 2006 - Amendment in Rule 55 - NOTIFICATION NO.F-10-03/2016/CT/V(12), DATED 27-2-2016

Madhya Pradesh VAT (Second Amendment) Act, 2015 - NOTIFICATION [NO.4 OF 2016], DATED 14-1-2016

Delhi Vat Act, 2004 - Scrutiny of Returns - CIRCULAR NO.40 OF 2015-16 [NO.F.3(639)/POLICY/VAT/2016/1642-48], DATED 8-3-2016

Thanks & Regards,

Meetesh Shiroya