Daily Tax & Corporate Law Digest | Editorial Board
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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(15) OF THE INCOME-TAX ACT, 1961 - CHARITABLE PURPOSE
ITAT denies tax exemption to a trust whose only 'charity' was to let out Kalyana Mandapams on a commercial basis at exorbitant rents - Kuchalambal Charities v. Income Tax Officer (Exemption) Ward-1, Bengaluru - [2022] 137 taxmann.com 36 (Bangalore - Trib.)
SECTION 2(22) OF THE INCOME-TAX ACT, 1961 - DEEMED DIVIDEND
Loans and advances to shareholders: Section 2(22)(e) would not be applicable where the assessee availed unsecured loan from its group company which was paid back with interest in the same year - Principal Commissioner of Income-tax v. Suprabha Industries Ltd. - [2022] 136 taxmann.com 259 (Calcutta)
SECTION 28(iv) OF THE INCOME-TAX ACT, 1961 - BUSINESS INCOME – VALUE OF ANY BENEFIT OR PERQUISITE, ARISING FROM BUSINESS OR EXERCISE OF PROFESSION
76% Gandhis held section 25 Company Young Indian was an adventure in the nature of trade under a cloak of charity, with the real purpose to gain control of properties valued at approx. Rs. 357 crores of publication company AJL which had ceased publication by paying a pittance of Rs.50 lakhs for 99% of shares in AJL in connivance with directors of AJL who were close to Gandhi's family and held high positions in AICC also. The acquisition of shares in AJL by YI was merely a step in the entire adventure which was in the nature of trade and commerce. The benefit has arisen to YI the moment the whole transaction had taken place right from the purchase of an asset in the form of a loan of Rs.90.21 crores due by AJL to AICC from AICC for a sum of Rs.50,00,000/- and in lieu of that, almost the entire shares of AJL have been acquired which was nothing but to get entire interest of the immovable assets of AJL - Young Indian v. Assistant Commissioner of Income-tax (E), Circle 1(1), New Delhi - [2022] 137 taxmann.com 12 (Delhi - Trib.)
SECTION 92C OF THE INCOME-TAX ACT, 1961 - TRANSFER PRICING - COMPUTATION OF ARM’S LENGTH PRICE
Internal TNMM cannot be rejected as MAM merely because segmental audit report refers to "information and explanation provided to us(auditor)" - V2 Tech Ventures (P.) Ltd. v. Deputy Commissioner of Income-tax 15(3)(1), Mumbai - [2022] 137 taxmann.com 26 (Mumbai - Trib.)
SECTION 144C OF THE INCOME-TAX ACT, 1961 - TRANSFER PRICING - REFERENCE TO DRP
Objection pending before DRP: Where objections to draft assessment order filed by the assessee within the time limit prescribed were pending disposal with DRP, impugned final assessment order passed under section 143(3) read with section 144C(3) by Assessing Officer was unjustified and same was to be set aside - Fiberhome India (P.) Ltd. v. National E-Assessment Centre, Additional/Joint/Deputy/Assistant Commissioner of Income-tax/Income-tax Officer - [2022] 136 taxmann.com 260 (Delhi)
SECTION 273B OF THE INCOME-TAX ACT, 1961 - PENALTY - NOT TO BE IMPOSED IN CERTAIN CASES
Illness of managing trustee of trust would come under reasonable cause as provided under section 273B for not filing return of income within due date; therefore, no penalty under section 272A(2)(e) to be imposed upon assessee-trust for late filing of its return of income due to ill health of its managing trustee - National Institute of Women Child & Rural Health Trust v. Joint Commissioner of Income-tax - [2022] 136 taxmann.com 261 (Chennai - Trib.)
GOODS AND SERVICES TAX LAWS
NOTIFICATION NO. 66/2015-20, DATED 01-04-2022
FTP & HBP amended to provide an extension of the exemption of imports under specified export schemes (AA, EPCG, EOU, etc.)
Editorial Note: The existing exemptions of imports under specified export incentive schemes (such as advance authorisation, Export Promotion of Capital Goods, Export oriented units, etc.) have been extended up to June 30, 2022. The DGFT has made suitable amendments under FTP & HBP to incorporate the above amendments.
CIRCULAR NO. 7/2022- CUSTOMS, DATED 31-03-2022
Clarification explaining jurisdictional powers of proper officers under Customs laws in terms of Finance Act, 2022
Editorial Note: The Finance Act, 2022 has made various amendments under the Customs law to extend the scope and powers of the Proper officers in order to nullify the impact of the judgment of the Supreme Court in the case of Canon India. In this regard, the Government has issued necessary notifications extending the scope of officers in terms of that amendment. The clarification explains the impact of such notifications.
CLASSIFICATION OF SERVICES
Construction of concrete roads: Where a municipal corporation awarded to the main contractor a contract for the construction of roads and the main contractor awarded part of said contract to the applicant-sub-contractor, such subcontract is liable to 12 per cent GST - Core Construction (Yatin Manoj Mora), In re - [2022] 136 taxmann.com 335 (AAR - MAHARASHTRA)
SECTION 73 OF FINANCE ACT, 1994 - RECOVERY OF SERVICE TAX NOT LEVIED OR PAID OR SHORT-LEVIED OR SHORT-PAID OR ERRONEOUSLY REFUNDED
Service Tax cannot be levied on movie theatre owner's share of net box office collections as consideration received by the distributor is for granting screening rights and not in the nature of business support services - Five Vision Promoters v. Commissioner, Central Excise & Service Tax, Ghaziabad - [2022] 137 taxmann.com 13 (Allahabad - CESTAT)
The penalty cannot be imposed when service tax is already paid before issuance of show cause notice - Five Vision Promoters v. Commissioner, Central Excise & Service Tax, Ghaziabad - [2022] 137 taxmann.com 13 (Allahabad - CESTAT)
Profits earned by the partner from a partnership firm are not liable to service tax as the partner of a partnership firm and partnership firm are the same; Order confirming demand of service tax based on income tax returns, set aside - Gautam Bhattacharya v. Commissioner of Central Tax - [2022] 137 taxmann.com 14 (Bangalore - CESTAT)
领英推荐
COMPANY AND SEBI LAWS
CIRCULAR NO. SEBI/HO/MIRSD/MIRSD_CRADT/P/CIR/2022/43, DATED 01-04-2022
SEBI extends the timeline for implementation of standardized rating scales used by CRAs
Editorial Note: SEBI in its earlier Circular dated July 16, 2021, advised CRAs to align their rating scales with the rating scales prescribed under the guidelines of the respective financial sector regulator or authority in terms of Regulation 9(f) of CRA Regulations, or to follow rating scales prescribed by Board. In view of the representation received from CRAs, SEBI has decided to extend the timeline for implementation of the standardized rating scales by June 30, 2022.
CIRCULAR NO. SEBI/HO/MIRSD/CRADT/CIR/P/2022/42, DATED 01-04-2022
SEBI standardizes the framework of industry classification for CRAs to bring uniformity in classifications
Editorial Note: With an objective to bring uniformity in the classifications being used across sectors and in the market, the SEBI has notified a standardized framework for industrial classification for adoption by the stakeholders. SEBI advised the CRA to use this framework for the purpose of rating exercises, peer benchmarking etc. The industry classification will be applicable to credit rating agencies w.e.f. October 01, 2022, meantime CRA can share their feedback and suggestions with the SEBI.
SECTION 18 OF THE REAL ESTATE (REGULATION AND DEVELOPMENT) ACT, 2016 - RETURN OF AMOUNT AND COMPENSATION.
NCDRC committed no error in allowing relief to aggrieved flat buyers in terms of section 18 of RERA as interpreted by SC - Imperia Structure Ltd. v. Brig. Harit Pant - [2022] 137 taxmann.com 32 (SC)
COMPETITION LAW
NOTIFICATION F. NO. CCI/CD/AMEND/COMB. REGL./2022, DATED 31-03-2022
CCI notifies revised format of Form II for filing of notice for proposed combinations
Editorial Note: The CCI has notified the CCI (Procedure in regard to the transaction of business relating to combinations) Amendment Regulations, 2022; substitute the existing form II which is filed for giving notice to CCI for entering into combination. The revised form II is divided into 7 parts. The form itself provides the format for the details to be given w.r.t assets and turnover of the parties to the combination. The revised form captures information in a more structured way.
FEMA BANKING AND INSURANCE LAWS
SECTION 118 OF THE NEGOTIABLE INSTRUMENTS ACT, 1881 - PRESUMPTIONS AS TO NEGOTIABLE INSTRUMENTS
The court cannot grant a declaration that bounced cheque was issued as a security, as such declaration would be contrary to section 118 of NI Act - Frost International Ltd. v. Milan Developers & Builders (P.) Ltd. - [2022] 137 taxmann.com 33 (SC)
INSOLVENCY AND BANKRUPTCY CODE
IBBI floats a discussion paper reviewing extant grievance redressal mechanisms for registered service providers
Editorial Note: IBBI has floated a discussion paper to review the existing grievance redressal and enforcement mechanism. Board has proposed 4 amendments to the existing mechanism i.e. enlarging the scope of IPAs w.r.t enforcement, examination of a complaint on basis of clarifications and records, Intimation to members of the CoC/AA about the outcome of order, revision in timelines of enforcement. Stakeholders can submit their comments in this regard electronically latest by 21st Apr 2022 by visiting the IBBI website.
SECTION 8 OF THE INSOLVENCY AND BANKRUPTCY CODE, 2016 - CORPORATE INSOLVENCY RESOLUTION PROCESS
Demand by the operational creditor: Where the appellant-operational creditor had not issued a demand notice demanding outstanding payment from the corporate debtor in requisite format and the corporate debtor had raised quality issues in reply to said notice, NCLT rightly dismissed the application filed under section 9 by the operational creditor for initiation of CIRP against the corporate debtor - Raghuvanshi Refractories v. Desai Impex (P) Ltd. - [2022] 136 taxmann.com 220 (NCL-AT)
ACCOUNTS AND AUDIT
A summary of a few clauses in CARO, 2020 and consequential amendment in Schedule III, issued by ICAI
Editorial Note: Keeping in view the requirement of new clauses in CARO,2020 and the corresponding amendments made in Schedule III to the Companies Act, 2013, a comprehensive revision of the Guidance Note on CARO 2020 (issued earlier) is being initiated by ICAI. However, a summary related to some of the clauses in CARO 2020 and consequential amendments to Schedule III to the Companies Act, 2013 has been provided.
That’s it from us for today! Stay Tuned for more updates from?Taxmann.com
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