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
NOTIFICATION NO. 50/2022/F. NO. 370142/2/2022-TPL, DATED 06-05-2022
CBDT notifies Rule for computation of minimum investment & exempt income of specified person u/s 10(23FE)
Editorial Note: FA 2020 has inserted a new clause (23FE) in section 10 to provide an exemption to a wholly-owned subsidiary of the ADIA, a sovereign wealth, and a pension fund. The exemption is provided in respect of any income of the specified person like dividend, interest, or long-term capital gains arising from an investment made by it in India. The CBDT has notified Rule 2DCA for the computation of such investment and exempt income.
SECTION 9 OF THE INCOME TAX ACT, 1961 - INCOME - DEEMED TO ACCRUE OR ARISE IN INDIA
Where foreign agents were only marketing educational course of assessee-university among intended non-resident students for which commission was paid, services rendered by these agents could not be regarded to be managerial, technical or consultancy services and, thus, remittances made by assessee outside India to these agents could not be deemed to accrue or arise in India - Sharda Educational Trust v. Income Tax Officer - [2022] 138 taxmann.com 119 (Delhi - Trib.)
Whereby evaluating PhD thesis paper, they have not provided to the assessee-university any technical services but merely applied their skill for evaluating PhD thesis, no technical services were rendered to the assessee by PhD thesis evaluators and, thus, the assessee could not be treated as an assessee in default for not deducting the TDS from the remittance made to PhD thesis evaluators - Sharda Educational Trust v. Income Tax Officer - [2022] 138 taxmann.com 119 (Delhi - Trib.)
In view of Article 12(5) of DTAA between India and Singapore, services rendered by the Singapore party for educating the faculty and staff so that their professional and technical knowledge be upgraded/updated cannot be regarded to be a fee for technical services - Sharda Educational Trust v. Income Tax Officer - [2022] 138 taxmann.com 119 (Delhi - Trib.)
SECTION 12AA OF THE INCOME-TAX ACT, 1961 - CHARITABLE OR RELIGIOUS TRUST - REGISTRATION PROCEDURE
Grant of registration: Section 12AA provides for the procedure for registration and the Commissioner at the time of grant of registration is required to satisfy himself about objects of trust and genuineness of its activities and has to grant registration only if it is so satisfied; issue regarding satisfaction of genuineness of activity of a trust is not a matter which can be looked into at the time of grant of registration under section 12AA - Principal Commissioner of Income-tax, Exemptions v. Embassy Charitable Trust - [2022] 137 taxmann.com 449 (Karnataka)
SECTION 28(i) OF THE INCOME-TAX ACT, 1961 - BUSINESS LOSS/DEDUCTIONS - ALLOWABLE AS
Bonds: SLP dismissed against the impugned order of High Court holding that where assessee, engaged in construction work, received RBI bonds instead of cash as consideration for the project undertaken in Iraq as sub-contractor and incurred loss on sale of bonds, considering nature of business of the assessee, bonds were to be treated as current assets and assessee was entitled to claim the loss on sale of RB bonds - Commissioner of Income-tax v. Bhageeratha Engineering Ltd. - [2022] 137 taxmann.com 453 (SC)
SECTION 40A(3) OF THE INCOME-TAX ACT, 1961 - BUSINESS DISALLOWANCE - CASH PAYMENT EXCEEDING PRESCRIBED LIMITS RULE 6DD(B)
Where the assessee made cash payments to two concerns in excess of Rs. 20,000, since said two concerns were State Government companies over which State Government had deep and pervasive control and payment was made by way of legal tender i.e. Indian currency, said payments were covered by exception contemplated in rule 6DD(b) and, therefore, same could not be disallowed under section 40A(3) - Deputy Commissioner of Income-tax v. Vinod Arora - [2022] 137 taxmann.com 450 (Amritsar - Trib.)
SECTION 92C OF THE INCOME TAX ACT, 1961 - TRANSFER PRICING - COMPUTATION OF ARM’S LENGTH PRICE
Companies following an outsourcing module of business cannot be compared with the assessee, a captive service provider, which itself performs its function - Agilent Technologies (International) (P.) Ltd. v. Assistant Commissioner of Income-tax, Circle-1(1) - [2022] 138 taxmann.com 118 (Delhi - Trib.)
A company engaged in the area of Geographical Information Systems services and rendering services in the fields of Cadastral Mapping, Navigation Maps, 3-D Mapping, Photogrammetry/remote sensing services, power, etc. could not be compared with a back-office support service as that of the assessee - Agilent Technologies (International) (P.) Ltd. v. Assistant Commissioner of Income-tax, Circle-1(1) - [2022] 138 taxmann.com 118 (Delhi - Trib.)
SECTION 158BD OF THE INCOME-TAX ACT, 1961 - BLOCK ASSESSMENT IN SEARCH CASES - UNDISCLOSED INCOME OF ANY OTHER PERSON
Scope of: Where assessee had entered into agreements with third parties for conferring distribution rights of films for consideration and search conducted at premises of assessee revealed that assessee had not disclosed entire amounts received under agreements for assessment and assessee claimed that it did not receive the entire amount as part of it had been waived as the movie failed at the box office, however, Tribunal on examination of ledger accounts seized during the search, had come to a definite conclusion that assessee had already received the entire amount from distributors much before the release of the film, the addition of balance amount as undisclosed income under section 158BC was justified - Pyramid Films International v. Deputy Commissioner of Income-tax - [2022] 137 taxmann.com 413 (Madras)
SECTION 271(1)(c) OF THE INCOME-TAX ACT, 1961 - PENALTY - FOR CONCEALMENT OF INCOME
Disallowance of claim: Where assessee had mistakenly not added foreign exchange fluctuation amount to his income, no case for levy of penalty under section 271(1)(c) was made out and penalty so levied, was to be deleted - Vimalachal Print & Pack (P.) Ltd. v. Deputy Commissioner of Income-tax - [2022] 137 taxmann.com 415 (Ahmedabad - ITAT)
GOODS AND SERVICES TAX LAWS
PUBLIC NOTICE NO. 7/2015-2020, DATED 06-05-2022
The additional quantity of 2051 MT of raw sugar for export to the USA notified: Public Notice
Editorial Note: The additional quantity of 2051 MT of raw sugar for export to the USA under TRQ has been notified. The DGFT has issued a public notice in this regard.
RULE 2(l) OF THE CENVAT CREDIT RULES, 2014 - INPUT SERVICE
State Government Undertaking was depositing service tax on payment made for professional services received from CA under reverse charge mechanism can avail credit thereof - Rajasthan Urban Infrastructure Finance & Development Corporation Ltd. v. Commissioner of Central Excise and Service Tax - [2022] 138 taxmann.com 121 (New Delhi - CESTAT)
On failure by the assessee to produce relevant documents to avail Cenvat credit, the matter was remanded to Adjudicating Authority to allow credit upon production of a certificate from the service provider in support of the amount claimed - Rajasthan Urban Infrastructure Finance & Development Corporation Ltd. v. Commissioner of Central Excise and Service Tax - [2022] 138 taxmann.com 121 (New Delhi - CESTAT)
SECTION 2(30) OF THE CENTRAL GOODS AND SERVICES TAX ACT, 2017 - SUPPLY - COMPOSITE SUPPLY
The activity of road cutting for laying cables would constitute composite supply as cables cannot be laid without cutting road - Tiruppur City Municipal Corporation, In re - [2022] 137 taxmann.com 436 (AAAR - TAMILNADU)
SECTION 7 OF THE CENTRAL GOODS AND SERVICES TAX ACT, 2017 - SUPPLY - SCOPE OF
Renting of locker for the common public at bus stand is an activity undertaken by the municipality as a function entrusted under article 243W of Constitution; services of rent or fee collection for such a facility is neither a supply of goods nor of service - Tiruppur City Municipal Corporation, In re - [2022] 137 taxmann.com 436 (AAAR - TAMILNADU)
If any transaction/activity undertaken by the municipality is held as neither a supply of goods nor a supply of service, the same situation would also be applicable to contractors providing the same back-to-back services to the municipal corporation - Tiruppur City Municipal Corporation, In re - [2022] 137 taxmann.com 436 (AAAR - TAMILNADU)
Consideration received by renting of bunk stalls in bus stand by the municipality through tender contractors is exempted as it falls under 'renting of immovable property service - Tiruppur City Municipal Corporation, In re - [2022] 137 taxmann.com 436 (AAAR - TAMILNADU)
领英推荐
Providing facilities of TV advertisement in bus stand by the municipality through tender contractors is exempted as this activity falls under renting of immovable property service - Tiruppur City Municipal Corporation, In re - [2022] 137 taxmann.com 436 (AAAR - TAMILNADU)
SECTION 73 OF THE FINANCE ACT, 1994 - RECOVERY OF SERVICE TAX NOT LEVIED OR PAID OR SHORT-LEVIED OR SHORT-PAID OR ERRONEOUSLY REFUNDED
The extended period of limitation was not invocable due to a lack of allegation of suppression or any falsification of accounts - Rajasthan Urban Infrastructure Finance & Development Corporation Ltd. v. Commissioner of Central Excise and Service Tax - [2022] 138 taxmann.com 121 (New Delhi - CESTAT)
No allegation of suppression or any falsification of accounts, a penalty not leviable - Rajasthan Urban Infrastructure Finance & Development Corporation Ltd. v. Commissioner of Central Excise and Service Tax - [2022] 138 taxmann.com 121 (New Delhi - CESTAT)
Service tax is not liable to be paid for composite contracts involving the transfer of property in goods prior to 1-6-2007 and Cenvat credit availed for such payment is ineligible; Such credit used for payment of service tax which was not required to be paid is considered as a reversal of credit - Swarnandhra IJMII Integrated Township Development Company (P.) Ltd. v. Commissioner of Customs, Central Excise & Service Tax. - [2022] 138 taxmann.com 120 (Hyderabad - CESTAT)
SECTION 73 OF THE CENTRAL GOODS AND SERVICES TAX ACT, 2017 - DEMANDS AND RECOVERY - TAX OR INPUT TAX CREDIT DUE NOT INVOLVING FRAUD MISSTATEMENT OR SUPPRESSION
Interest/penalty can be imposed only when input tax credit has been availed and utilised; for the attempt to wrongly avail credit petitioner would not be liable to a penalty imposed but liable for the token penalty - Aathi Hotel v. Assistant Commissioner (ST) (FAC) - [2022] 137 taxmann.com 435 (Madras)
COMPANY AND SEBI LAWS
NOTIFICATION NO. SEBI/LAD-NRO/GN/2022/83, DATED 04-05-2022
SEBI specifies separate non-refundable filing fees be paid by InvIT for the initial offer and right issues
Editorial Note: SEBI has notified the SEBI (InvITs) (Amendment) Regulations, 2022. Now InvITs are required to pay non-refundable filing fees of 0.1% in the case of the initial offer and 0.05% in the case of the right issue of the total issue size including the greenshoe option at the time of filing of the draft placement memorandum or offer letter w.r.t private placement. Earlier, the InvIT was required to pay non-refundable filing fees of 0.1% of the total issue size irrespective of the type of issue.
PRESS RELEASE NO. 15/2022, DATED 06-05-2022
SEBI constitutes an advisory committee on Environmental, Social and Governance (ESG) matters
Editorial Note: The SEBI has constituted a committee for advising on ESG-related matters in the securities market. The terms of reference of the Committee include enhancements in business responsibility and sustainability report (BRSR), disclosures in the rationale by ESG rating providers on what and how qualitative factors were factored in the ESG ratings/observations, examining whether ESG funds need to have prudential norms, long term plan to prescribe ESG disclosures for all the Mutual Fund schemes etc.
SECTION 8 OF THE ARBITRATION AND CONCILIATION ACT, 1996 - POWER TO REFER PARTIES TO ARBITRATION WHERE THERE IS AN ARBITRATION AGREEMENT
SC refers to a larger Bench on the question of applicability of the 'Group of Companies doctrine' to arbitration jurisprudence in India - Cox & Kings Ltd. v. SAP India (P.) Ltd. - [2022] 138 taxmann.com 134 (SC)
REGULATION 11 OF THE SECURITIES AND EXCHANGE BOARD OF INDIA (SUBSTANTIAL ACQUISITION OF SHARES AND TAKEOVERS) REGULATIONS, 2011 - CONSOLIDATION OF HOLDINGS
Where promoters of target company acquired its shares in excess of prescribed limit and thus, violated Regulation 11(1) of SAST regulation and for alleged violation SEBI initiated proceeding after 10 years, since information regarding the said acquisition was available in the public domain, considering the lapse of time in culminating proceedings, the direction issued by SEBI to promoters to make on public announcement could not be sustained - RV Lifestyle Ltd. v. Securities and Exchange Board of India - [2022] 137 taxmann.com 403 (SAT - Mumbai)
FEMA BANKING AND INSURANCE LAWS
NOTIFICATION NO. S.O. 2134(E),DATED 06-05-2022
Govt. further extends the validity of the Udyog aadhar memorandum from 31st March 2022 to 30th June 2022
Editorial Note: Ministry of Micro, Small and Medium enterprises has come out with an amendment notification. The ministry has extended the validity of EM Part-II and UAMs from 31.03.2022 to 30.06.2022. This would facilitate the holders of EM Part-II and UAMs to avail of benefits of the provisions under various existing schemes and incentives and will provide them with more time to migrate to the new portal.
SECTION 3 OF THE PREVENTION OF MONEY LAUNDERING ACT, 2002
The court cannot proceed on the basis of preponderance of probabilities, even in cases of PMLA( offences u/ss 3 & 4 of PMLA) - J.Sekar @Sekar Reddy v. Directorate of Enforcement - [2022] 138 taxmann.com 132 (SC)
SECTION 3 OF THE FOREIGN EXCHANGE MANAGEMENT ACT, 1999 - DEALING IN FOREIGN EXCHANGE, ETC.
Where ED filed a complaint alleging violation of section 9 on the ground that the respondent made a voluntary statement that he had accumulated Rs. 21.80 lakh from commission for the conversion of Bangladeshi currency to Indian currency although, he was not an authorised dealer in foreign exchange, however, during the trial of the case, the respondent took a plea that his confessional statement was recorded by force, in view of the fact that when two statements were apparent on the face of the record, the view that helps accused and in favour of him was be accepted and thus, appeal against acquittal order passed by Magistrate was to be dismissed on the contest - Enforcement Officer, Enforcement Directorate v. Laxmi Narayan Roy - [2022] 137 taxmann.com 404 (Calcutta)
OPINIONS
Reassessment of Income Escaping Assessment – The Saga Continues - Sanjeeva Narayan, CA - [2022] 138 taxmann.com 131 (Article)
A decennium for the Indian APA regime – Creating a future from learnings - Rajiv Bhutani, Partner, Transfer Pricing, Tax & Regulatory Services at BDO India - [2022] 138 taxmann.com 130 (Article)
Critical Analysis of important recommendations by CLC to revamp Company Law - Gaurav N. Pingle, CS - [2022] 138 taxmann.com 133 (Article)
That’s it from us for today! Stay Tuned for more updates from?Taxmann.com
Taxmann Academy presents the Tax and Accounts Professional (TAP) Course!
Enrol in the Foundation Level of TAP course?and get practical training in book-keeping, income-tax returns, GST returns, TDS returns, Payroll, MS-Office, Labour Laws, and much more.
Join the Taxmann Academy Now!?https://taxmann.social/4mb5
Don’t feel Trapped; Enrol in TAP!?
Batch Begins 16th?May 2022
#TaxmannUpdates?#TAPonTAP?#Tax?#Accounts?#Career?#CareerDevelopment?#TaxandAccountsJobs?#IncomeTax?#GST