Daily Tax and 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 92C OF THE INCOME-TAX ACT, 1961 - TRANSFER PRICING - COMPUTATION OF ARM'S LENGTH PRICE
Comparability factors - Geographical location of comparable : While considering issue of comparability with an uncontrolled transaction, condition prevailing in market for which respective parties to transaction operate, including geographical location along with other factors, is relevant to decide which method is suitable for benchmarking said transaction - Firemenich Aromatics Production (India) (P.) Ltd. v. ACIT, Mum. - [2021] 133 taxmann.com 98 (Mumbai - Trib.)
Adjustments - Interest : Arm's length price of interest to be charged on ECB loan availed by assessee-company from AE had to be determined at six months USD LIBOR rate plus 350 basis points as per RBI circular - Firemenich Aromatics Production (India) (P.) Ltd. v. ACIT, Mum. - [2021] 133 taxmann.com 98 (Mumbai - Trib.)
Adjustment - Software charges : Where software charges were paid by assessee for obtaining access to ERP software and for regular recurrent services, since charges had been paid pursuant to agreement and assessee had already placed on record audit certificate along with sample third party invoices raised by vendors on its AE, TPO should allow this expenditure to assessee - Firemenich Aromatics Production (India) (P.) Ltd. v. ACIT, Mum. - [2021] 133 taxmann.com 98 (Mumbai - Trib.)
SECTION 254 OF THE INCOME-TAX ACT, 1961 - APPELLATE TRIBUNAL - ORDER OF
Power of Rectification : Power to rectify an order under section 254(2) is extremely limited; it does not extend to correcting errors of law or re-appreciating factual findings and those properly fall within appellate review of an order of Court of first instance and what legitimately fails for consideration are errors (mistakes) apparent from record - Vrundavan Ginning AND Oil Mill v. Assistant Registrar/President - [2021] 126 taxmann.com 227 (Gujarat)
GOODS AND SERVICES TAX LAWS
CIRCULAR NO. 167 / 23 /2021 - GST, DATED 17-12-2021
CBIC issued clarification on various issues relating to shift in GST liability from restaurant to Food aggregators
Editorial Note : From January 1st, 2022, the tax on supplies of restaurant services supplied through E-commerce operators (ECOs) shall be paid by ECOs. In this regard, the CBIC has clarified several points such as ITC reversal by ECOs, TCS requirement, compliance requirement etc.
CLASSIFICATION OF SERVICES
Education services : Where applicant provides pre examination as well as post examination related services to Educational Boards, Council and Universities, supply of these service shall get covered under Entry No. 66 of Notification No. 12/2017 - Central Tax (Rate), dated 28-6-2017 and shall be exempted from payment of tax - Management & Computer Consultants, In re - [2021] 133 taxmann.com 100 (AAR-WEST BENGAL)
COMPANY AND SEBI LAWS
CIRCULAR NO. SEBI/HO/DDHS/P/CIR/2021/0692, DATED 17-12-2021
SEBI amends operational guidelines on listing of Commercial Papers
Editorial Note : In order to bring about uniformity in requirements, SEBI has proposed certain amendments to circular pertaining to listing of Commercial Paper, SEBI has prescribed that now issuer needs to submit details of current tranche including ISIN, amount, date of issue, maturity, all credit ratings including unaccepted ratings, date of rating, name of the credit rating agency, its validity period, declaration that rating is valid as at date of issuance and listing, details of issuing and paying agent.
SECTION 165 OF THE COMPANIES ACT, 2013 - DIRECTORSHIP
Number of : Where respondent-Deputy Registrar of Companies had filed a complaint before competent Court at Chennai against petitioner alleging violation of section 165 and thereafter, shifted said complaint to Coimbatore, respondent was obligated to explain reasons for same to Court at Coimbatore and Magistrate would take a call on accepting or rejecting those reasons; proceedings pending at Chennai was to be quashed - Ravi Sam v. Deputy Registrar of Companies - [2021] 133 taxmann.com 91 (Madras)
COMPETITION LAW
SECTION 6 OF THE COMPETITION 2002 - REGULATION OF COMBINATIONS
Amazon fined Rs.202 crores for not disclosing that true purpose of its acquisition was to gain 'foot-in-the-door' in Indian retail sector - Amazon.com NV Investment Holdings LLC, In re - [2021] 133 taxmann.com 221 (CCI)
INSOLVENCY AND BANKRUPTCY CODE
SECTION 5(24) OF THE INSOLVENCY AND BANKRUPTCY CODE, 2016 - CORPORATE INSOLVENCY RESOLUTION PROCESS
Related party, in relation to a corporate debtor : Where corporate debtor acted on advice, direction and instructions of appellant in its normal business affairs relating to corporate debtor, appellant 'squarely came within ambit of related party as per section 5(24) and, thus, it could not be included as member of Committee of Creditors - Telangana State Trade Promotion Corporation v. A.P. Gems & Jewellery Park (P.) Ltd. - [2021] 133 taxmann.com 101 (NCLAT - Chennai)
SECTION 30 OF THE INSOLVENCY AND BANKRUPTCY CODE, 2016 - CORPORATE INSOLVENCY RESOLUTION PROCESS - RESOLUTION PLAN - SUBMISSION OF
SC upholds CoC's decision to exclude from further bidding process a PRA who was very casual in approach - Ngaitlang Dhar v. Panna Pragati Infrastructure (P.) Ltd. - [2021] 133 taxmann.com 219 (SC)
ACCOUNTS AND AUDIT
Ind AS 12: Disclosure of relationship between Tax Expense (Income) and Accounting Profit
Editorial Note : As per Ind AS 12, Income Taxes, An entity shall disclose either a numerical reconciliation between tax expense (income) and the product of accounting profit multiplied by the applicable tax rate(s), along with the basis on which the applicable tax rate(s) is (are) computed; or a numerical reconciliation between the average effective tax rate and the applicable tax rate, along with the basis on which the applicable tax rate is computed; or both.
OPINIONS
Opinion: Slump Sale V. Demerger - V. K. Subramani, CA - [2021] 133 taxmann.com 126 (Article)
GST and CSR: A Case in Furtherance of Business - Manjri Singh - [2021] 133 taxmann.com 197 (Article)
That’s it from us for today! Stay Tuned for more updates from?Taxmann.com
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