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 9 OF THE INCOME-TAX ACT, 1961 - INCOME - DEEMED TO ACCRUE OR ARISE IN INDIA
Permanent establishment - Agency PE : Where assessee, a foreign shipping company, entered into shipping agency agreement with two entities in India in view of facts that said entities were not exclusively working for assessee and services provided by them to various shipping companies including assessee were in course of their ordinary business as per article 5(5) of DTAA between India and Mauritius, they did not constitute agency PE of assessee in India - Integrated Container Feeder Service v. Joint Director of Income-tax, (Intl. tax), (Mum) - [2021] 133 taxmann.com 194 (Mumbai - Trib.)
SECTION 68 OF THE INCOME-TAX ACT, 1961 - CASH CREDIT
Unsecured loans : Where assessee had taken unsecured loans from some persons and Assessing Officer made addition under section 68 on ground that assessee had not been able to prove immediate source of cash-in-hands of party, since all ingredients contemplated under section 68 had been duly satisfied on aspect of identity of creditors, genuineness of transactions and their creditworthiness, said addition was to be deleted - Principal Commissioner of Income-tax. v. Gopal Heritage (P.) Ltd. - [2021] 133 taxmann.com 173 (Gujarat)
SECTION 92C OF THE INCOME-TAX ACT, 1961 - TRANSFER PRICING - COMPUTATION OF ARM'S LENGTH PRICE
Comparables and adjustments - Methods for determining ALP - TNMM : Location savings and advantages are very much relevant in cross border transaction but for limited purpose of carrying out exercise of examination and investigation of transaction and not as a basis for determining ALP and consequently adjustment thus, when local comparables are available, then instead of going to location saving as a basis of adjustment, TNMM shall be preferred - Parexel International Clinical Research (P.) Ltd. v. Deputy Commissioner of Income-tax - [2021] 133 taxmann.com 193 (Bangalore - Trib.)
Adjustments - Operating profit/cost, computation of : Where assessee was engaged in clinical trial and research services in India on behalf of its group companies for which assessee was entitled to remuneration and parent company had derived economic or commercial benefit from services offered by assessee-company and assessee would not have rendered this kind of services to unrelated party, same could not be treated as reimbursement of expenses or pass through cost and TPO was justified in marking up services so as to make TP adjustment while computing ALP - Parexel International Clinical Research (P.) Ltd. v. Deputy Commissioner of Income-tax - [2021] 133 taxmann.com 193 (Bangalore - Trib.)
SECTION 254 OF THE INCOME-TAX ACT, 1961 - APPELLATE TRIBUNAL - POWERS OF
General : When there is no direction by Tribunal to do fresh assessment and order for earlier assessment year has been set aside, Assessing Officer cannot take advantage of passing remark/observation on Tribunal's order so as to frame fresh assessment on same issue - Jaya Prakash v. Income-tax Officer, Ward-4(3)(5), Bengaluru - [2021] 133 taxmann.com 189 (Bangalore - Trib.)
SECTION 263 OF THE INCOME-TAX ACT, 1961 - REVISION - OF ORDERS PREJUDICIAL TO INTEREST OF REVENUE
General : Where assessment order was passed on basis of notice issued by Assessing Officer of a different jurisdiction, it could not be countenanced in law and consequently, revisional action under section 263 on said assessment order was not permissible in law - Minimax Commerce (P.) Ltd. v. Assistant Commissioner of Income-tax, Raipur - [2021] 133 taxmann.com 188 (Raipur - Trib.)
GOODS AND SERVICES TAX LAWS
Officers of DGGI, Ahmedabad initiated search operations In Kanpur: Press Release
Editorial Note : On specific intelligence, officers of Directorate General of GST Intelligence (DGGI), Ahmedabad with the support of officers of local Central GST initiated search operations in Kanpur on 22.12.2021. The search operations covered the factory premises of M/s Trimurti Fragrance Pvt Ltd, Kanpur, manufacturers of Shikhar brand Pan Masala and Tobacco products and the office/godowns of M/s Ganpati Road Carriers, Transport Nagar, Kanpur, involved in transportation of goods.
Changes in HSN codes as per HS-2022; CBIC issued Guidance Note on Correlation of Customs Tariff between 2021-2022
Editorial Note : The new (seventh) edition of the Harmonized System (HS) nomenclature, HS-2022, shall come into force from 1st January, 2022. The new HS-2022 have around 351 amendments at 6 Digit level whereas India follows 8 digit classification. For ease in co-relation between HS2021 and HS2022 at 8-digit level, CBIC has issued a correlation document(at 8 digit level).
SECTION 16 OF THE CENTRAL GOODS AND SERVICES TAX ACT, 2017 - INPUT TAX CREDIT - ELIGIBILITY AND CONDITIONS FOR TAKING CREDIT
Where applicant purchases second hand cars (goods) and after minor processing which does not change nature of goods, said goods are sold and assessee has opted for Margin Scheme and applies GST rate as per Notification No. 8/2018-Central Tax (Rate), dated 25-1-2018, it cannot claim input tax credit on indirect expenses incurred for purpose of business such as rent, commission, professional fees, telephone, etc. - Deccan Wheels, In re - [2021] 133 taxmann.com 235 (AAR - MAHARASHTRA)
SECTION 129 OF THE CENTRAL GOODS AND SERVICES TAX ACT, 2017 - DETENTION, SEIZURE AND RELEASE OF GOODS AND CONVEYANCES IN TRANSIT
Where Competent Authority detained perishable goods and vehicle on ground that an e-way bill had expired, while petitioner pleaded break down of vehicle on way, Competent Authority was to be directed to release goods and vehicle on assessee depositing or giving Bank guarantee or furnishing bond for possible tax with penalty - ATC Supply Chain Solution (P.) Ltd. v. State of Tripura - [2021] 133 taxmann.com 234 (TRIPURA)
COMPANY AND SEBI LAWS
领英推荐
PRESS RELEASE NO. 37/2021, DATED 23-12-2021
SEBI signs Enhanced Multilateral MoU of ‘International Organization of Securities Commissions’
Editorial Note : SEBI has signed the Enhanced Multilateral Memorandum of Understanding (EMMoU) of the International Organization of Securities Commissions (IOSCO) on December 22, 2021. EMMoU was introduced by IOSCO to expand the range of enforcement powers that signatories may use to safeguard the integrity and stability of markets, protect investors and deter misconduct and fraud.
FEMA BANKING AND INSURANCE LAWS
CIRCULAR NO. RBI/2021-2022/142 CO.DPSS.POLC.NO.S-1211/02-14-003/2021-22, DATED 23-12-2021
RBI extends timeline for card-on-file tokenisation till June 30,2022
Editorial Note : Based on representations from various stakeholders, the RBI has decided to extend the timeline for storing of Card-on-File (CoF) data by six months, i.e., till June 30, 2022, post this such data shall be removed. Earlier vide circular CO.DPSS.POLC.No.S33 / 02-14-008 / 2020-2021 dated March 31, 2021 this timeline was extended to December 31, 2021.
INSOLVENCY AND BANKRUPTCY CODE
CIRCULAR FILE NO. 30/38/2021-INSOLVENCY, DATED 23-12-2021
MCA seeks comments on proposed changes to IBC norms; proposes key changes for swift admission process
Editorial Note : MCA has sought public comments on proposed changes in IBC. Based on the issues raised by Insolvency Law Committee, Changes have been proposed to enable a swift admission process, streamline provisions pertaining to avoidable transactions and wrongful trading and norms relating to time period for approval of resolution plans. MCA has suggested that financial creditors should to rely on Information Utility (IU) records to establish default to expedite the admission of insolvency applications.
SECTION 14 OF THE INSOLVENCY AND BANKRUPTCY CODE, 2016 - CORPORATE INSOLVENCY RESOLUTION PROCESS - MORATORIUM
Supply of essential goods or services like electricity to corporate debtor should not be terminated or suspended or interrupted during moratorium period, however, dues arising from such supply during moratorium are paid and if they are not paid, section 14 will not protect - Harish Taneja v. Dakshin Haryana Bijli Vitran Nigam - [2021] 133 taxmann.com 146 (NCLAT- New Delhi)
ACCOUNTS AND AUDIT
Measurement of inventories in accordance with Accounting Standard 2
Editorial Note : Inventories encompass goods purchased and held for resale. It also includes finished goods produced or work in progress being produced by the entity and include materials, maintenance supplies, consumables and loose tools awaiting use in the production process. AS 2 provides guidance for valuation of inventory to be presented in the financial statements along with the cost formula used to assign cost to inventory and any write down thereof to net realizable value.
OPINIONS
Critical appraisal of penal provisions of Income-tax Act, 1961 - V. K. Subramani, CA - [2021] 133 taxmann.com 224 (Article)
Gratuity under the New Labour Code – What has changed? - Sudeep Das, CA, Ridhi Sanghvi, CA - [2021] 133 taxmann.com 276 (Article)
That’s it from us for today! Stay Tuned for more updates from?Taxmann.com
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