Daily Tax & Corporate Law Digest | Editorial Board
Dear Reader,
Today’s newsletter analytically summarizes today’s top Tax & Corporate Law stories reported at?taxmann.com, in a unique section-wise format.
INCOME TAX
SECTION 2(14) OF THE INCOME-TAX ACT, 1961 - CAPITAL GAIN - CAPITAL ASSET
Right to sue : Right to receive compensation/damages for release of right to sue on account of breach of contract for sale of land is not a capital asset and thus not chargeable to tax as capital gains - Income-tax Officer v. Ganeshsagar Infrastructure (P.) Ltd. - [2022] 135 taxmann.com 313 (Ahmedabad - Trib.)
SECTION 32 OF THE INCOME-TAX ACT, 1961 - DEPRECIATION - UNABSORBED DEPRECIATION
Period of carry forward : In view of amended section 32(2) by Finance Act, 2001 with effect from 1-4-2002, unabsorbed depreciation of assessment year 1997-98 could be allowed to be carried forward and set-off after a period of 8 years - Principal Commissioner of Income-tax v. JCT Ltd. - [2022] 135 taxmann.com 295 (Calcutta)
SECTION 69A OF THE INCOME TAX ACT, 1961 - UNEXPLAINED MONEYS
HC declines to quash additions u/s 69A to politician's income of Rs. 11.5 crores unaccounted cash seized from employee of politician's trust - Durai Murugan Kathir Anand v. Additional Commissioner of Income-tax, Central Range-1, Chennai - [2022] 136 taxmann.com 70 (Madras)
SECTION 92C OF THE INCOME-TAX ACT, 1961 - TRANSFER PRICING - COMPUTATION OF ARM'S LENGTH PRICE
Comparability factors - Turnover filter : High turnover is a ground for excluding companies as not comparable with a company that has low turnover - Atmecs Technologies (P.) Ltd. v. Income-tax Officer - [2022] 135 taxmann.com 311 (Bangalore - Trib.)
Comparability factors - Related party transaction : Where related party transaction of selected company was above 15 per cent, said company should be excluded from list of comparable companies - Atmecs Technologies (P.) Ltd. v. Income-tax Officer - [2022] 135 taxmann.com 311 (Bangalore - Trib.)
Adjustments - Capacity utilization : Once it is accepted that assessee has under utilized capacity during subject assessment year and is, accordingly, factually and legally eligible to an adjustment for same, such a benefit cannot be denied to assessee only for reason that data about comparable companies is not available - Atmecs Technologies (P.) Ltd. v. Income-tax Officer - [2022] 135 taxmann.com 311 (Bangalore - Trib.)
Comparability factors - Foreign comparables : Foreign AE can be considered as tested party when foreign AE is less/least complex entity and requisite information is available about tested party and comparable - Atmecs Technologies (P.) Ltd. v. Income-tax Officer - [2022] 135 taxmann.com 311 (Bangalore - Trib.)
Royalty agreements with guaranteed minimum clause are not comparables when assessee's royalty agreement with AE lacks such a clause - Diesel Fashion India Reliance (P.) Ltd. v. Assistant Commissioner of Income-tax, 3(1)(1), Mumbai - [2022] 136 taxmann.com 71 (Mumbai - Trib.)
SECTION 115JB OF THE INCOME-TAX ACT, 1961 - MINIMUM ALTERNATE TAX - PAYMENT OF TAX
Computation of book profit : Where compensation received by assessee for release of right to sue was treated as capital receipt and not chargeable to tax, it had to be excluded from computing book profit under section 115JB - Income-tax Officer v. Ganeshsagar Infrastructure (P.) Ltd. - [2022] 135 taxmann.com 313 (Ahmedabad - Trib.)
SECTION 147 OF THE INCOME TAX ACT, 1961 - INCOME ESCAPING ASSESSMENT - GENERAL
Reassessment Notice will be quashed if issued for the reason that it is 'likely' that assessee might have claimed incorrect deduction - HDFC Bank Ltd. v. Assistant Commissioner of Income-tax-2(3), Mumbai - [2022] 136 taxmann.com 69 (Bombay)
GOODS AND SERVICES TAX LAWS
CLASSIFICATION OF GOODS
Popcorn : Popcorn is classifiable under Tariff Item 1904 10 90, attracting GST of 18% - Shyam Sundar Sharma, In re - [2021] 124 taxmann.com 609 (AAR- UTTAR PRADESH)
SECTION 54 OF GUJARAT GOODS AND SERVICES TAX ACT 2017 - REFUND - TAX, REFUND OF
Input tax credit received from Input Service Distributor lying unutilized due to exports eligible for refund - IPCA Laboratories Ltd. v. Commissioner - [2022] 136 taxmann.com 68 (Gujarat)
SECTIONS 73 OF THE FINANCE ACT, 1994 - RECOVERY OF SERVICE TAX NOT LEVIED OR PAID OR SHORT-LEVIED OR SHORT-PAID OR ERRONEOUSLY REFUNDED
Discounts offered by car manufacturers to their dealers for onward transmission to corporate customers were not liable to tax as business auxiliary services - Autobahn Enterprises (P.) Ltd. v. Commissioner of Service Tax - [2022] 136 taxmann.com 73 (Mumbai - CESTAT)
Finality to doubt about tax liability of commission received by car dealer was accorded by C.B.E. & C. after much delay; suppression of facts cannot be alleged to extend period of limitation for raising demand - Autobahn Enterprises (P.) Ltd. v. Commissioner of Service Tax - [2022] 136 taxmann.com 73 (Mumbai - CESTAT)
领英推荐
COMPANY AND SEBI LAWS
SECTION 161 OF THE COMPANIES ACT, 2013 - DIRECTORS - APPOINTMENT OF ADDITIONAL DIRECTOR, ALTERNATE DIRECTOR AND NOMINEE DIRECTOR
Where Articles of Association of company gives power to Board of Directors only to fill casual vacancies in Board, appointment of Additional Directors under pretext to fill casual vacancies as caretakers was against cardinal principle of corporate law and therefore, appointment of said directors was invalid - Tap World v. Kerala Chamber of Commerce and Industry - [2022] 135 taxmann.com 298 (NCLT - Kochi)
SECTION 168 OF THE COMPANIES ACT, 2013 - RESIGNATION OF DIRECTOR
Where director of company tendered her resignation and same was placed before Board of Directors and was duly received and acknowledged by Board mere non-submission of Form DIR 12 by Company or Form DIR 11 by resigned director to ROC does not make resignation invalid - Tap World v. Kerala Chamber of Commerce and Industry - [2022] 135 taxmann.com 298 (NCLT - Kochi)
SECTION 185 OF THE COMPANIES ACT, 2013 - DIRECTORS - LOANS TO
Where directors of company had given loan without obtaining approval of Central Government to a company in which they were also directors/members, same was in violation to provisions of section 295 and therefore, said directors were to be disqualified under section 283 (1) (h) and their DIN were liable to be blocked for such incurred disqualification - Tap World v. Kerala Chamber of Commerce and Industry - [2022] 135 taxmann.com 298 (NCLT - Kochi)
COMPETITION LAW
SECTION 26 OF THE COMPETITION ACT, 2002 - PROCEDURE FOR INQUIRY UNDER SECTION 19
Informant must file certificate u/s 65B of the Evidence Act in respect of the electronic evidence submitted by him - AIOVA Sellers Association v. Amazon Seller Services (P.) Ltd. - [2022] 136 taxmann.com 72 (CCI)
INSOLVENCY AND BANKRUPTCY CODE
SECTION 12A OF THE INSOLVENCY AND BANKRUPTCY CODE, 2016 - CORPORATE INSOLVENCY RESOLUTION PROCESS
Withdrawal of application : Where although 'assignee' of loan had filed an application to withdraw CIRP application, RP had not presented said application before Adjudicating Authority and instead constituted Committee of Creditors, RP had defeated endeavour of assignee seeking pre-Committee of Creditors constitution withdrawal under regulation 30A(1)(a) and therefore, impugned order passed by Adjudicating Authority whereby it dismissed interlocutory application filed by assignee challenging action of RP was to be set aside - CFM Asset Reconstruction (P.) Ltd. v. Vishram Narayan Panchpor RP - [2022] 135 taxmann.com 299 (NCLAT- New Delhi)
SECTION 22 OF THE INSOLVENCY AND BANKRUPTCY CODE, 2016 - CORPORATE INSOLVENCY RESOLUTION PROCESS - RESOLUTION PROFESSIONAL
Appointment of : Where appellant-Interim Resolution Professional (IRP) was replaced by Committee of Creditors (CoC) by majority votes and said decision had been approved by NCLT, appellant-IRP had no vested right to continue on post of IRP/RP - Mohd. Nazim Khan v. Committee of Creditors of International Trenching (P.) Ltd. - [2021] 133 taxmann.com 455 (NCLAT- New Delhi)
ACCOUNTS AND AUDIT
Mandatory requirement for disclosure of accounting ratios in Ind AS Financial Statement
Editorial Note : In order to bring greater transparency in the financial statements, an amendment to Schedule III to the Companies Act, 2013 was introduced by the MCA. Wherein, several new disclosures that are grouped under “Additional Regulatory Information”(ARI) were mentioned. In this story, we will discuss the disclosures of 11 key accounting ratios i.e. one of the disclosures specified under ARI.
OPINIONS
Liability to Pay Interest is automatic but recovery is not - CS Abhishek Goyal, Advocate - [2022] 136 taxmann.com 75 (Article)
Appointment of managing director in private limited companies under the provisions of companies act 2013 - Prof R Balakrishnan, FCS - FCWA - Pune - [2022] 136 taxmann.com 74 (Article)
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