Daily Updates and News

INCOME TAX ACT

SECTION 4

FIRM - ASSESSABLE AS

Assessment as AOP : Where show-cause notice was issued under section 251(1)(a) intending (i) to make addition to income of firm as AOP as maximum number of members in firm exceeded prescribed number of twenty and (ii) for addition of disallowed expenditure, writ petition against it would not have any merit; objections were to be raised in appeals filed under Act - [2016] 67 taxmann.com 233 (Madras)

SECTION 36(1)(ii)

BONUS OR COMMISSION

Commission : Where assessee paid commission to its staff which was disallowed by Tribunal, matter required re-examination in view of ratio laid down in ShahzadaNand& Sons v. CIT AIR 1977 SC 1182 wherein it was held that there could be cases where commission could be paid to staff for carrying out extra services - [2016] 67 taxmann.com 234 (Bombay)

SECTION 37(1)

BUSINESS EXPENDITURE - ALLOWABILITY OF

Provision : Where assessee was managing consumer loyalty programs for its partner whose customers would be entitled to loyalty points on purchase of certain goods or services and audit objection was raised in respect of allowability of provision towards unredeemed loyalty points, same being addressed by Assessing Officer, there would remain no basis for initiating reassessment - [2016] 67 taxmann.com 232 (Karnataka)

Commission : Where assessee paid commission to taxi drivers and travel agents to procure more business, action of Tribunal to disallow said commission without scrutinizing material on record was not justified - [2016] 67 taxmann.com 234 (Bombay)

COMPANIES ACT

SECTION 530

WINDING UP - PREFERENTIAL PAYMENTS

If, in course of winding up, that is to say, after passing of winding up order but before company is actually wound up, Official Liquidator requires and uses licensed premises for beneficial winding up, licence fees payable during period of such beneficial use must rank as liquidation expenses and be accorded top priority, i.e., even over priority claims under sections 529, 529A and 530 - [2016] 67 taxmann.com 242 (Bombay)

STATUTES

DIRECT TAX LAWS

Section 197A of the Income-tax Act, 1961 - Deduction of tax at source - No deduction in certain cases - Inclusion of interest income in return of income filed by persons liable to pay Tax - PRESS RELEASE, DATED 23-3-2016

Section 194-IA of the Income-tax Act, 1961 – Payment on transfer of certain Immovable Property other than Agricultural Land – Correction and statement cum challan relating to TDS on sale of property under Section 194-IA – Withdrawal of Standard Operating Procedure (SOP) - LETTER F.NO.DIT(S)-2/FORM 26QB/100/2015, DATED 22-3-2016

CORPORATE LAWS

Section 396 of the Companies Act, 2013 - Registration Offices - Further Empowerment of Central Registration Centre (CRC) - NOTIFICATION [F. NO. A-42011/03/2016-AD.II], DATED 23-3-2016

Consolidated FDI Policy Circular 2015 - Review of FDI Policy on Pension Sector - Amendment in Paragraph 6.2.18.7 Bis. - PRESS NOTE NO.2 (2016 SERIES), DATED 23-3-2016

Consolidated FDI Policy Circular 2015 – Review of FDI on Insurance Sector - Amendment in Paragraph 6.2.18.7 - PRESS NOTE NO.1 (2016 SERIES), DATED 23-3-2016

Carriage by Air (Amendment) Act, 2016 - [NO.12 OF 2016], DATED 21-3-2016

Companies (Incorporation) Second Amendment Rules, 2016 - Substitution of Form INC-11 - NOTIFICATION [F.NO.01/13/2013 CL-V (PT-I)], DATED 23-3-2016

Bureau of Indian Standards Act, 2016 - [NO.11 OF 2016], DATED 21-3-2016

Liquidity Risk Management & Basel III Framework on Liquidity Standards – Liquidity Coverage Ratio (LCR), Liquidity Risk Monitoring Tools and LCR Disclosure Standards - CIRCULAR DBR.BP.BC.NO.86/21.04.098/2015-16, DATED 23-3-2016

Diamond Dollar Account (DDA) - Reporting Mechanism - A.P. (DIR SERIES 2015-16) CIRCULAR NO.54, DATED 23-3-2016

High Court and the Supreme Court Judges (Salaries and Conditions of Service) Amendment) Act, 2016 - [NO.13 OF 2016], DATED 21-3-2016 Thanks & Regards, Meetesh Shiroya