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
UN releases Model double Taxation Convention 2021
Editorial Note: The United Nations has released the Model Double Taxation Convention 2021. This latest revision of the United Nations Model Tax Convention continues an ongoing review process intended to ensure that the contents of the Model keep up with developments, including in-country practice, new ways of doing business and new challenges.
NOTIFICATION F.NO. 225/81/2022/ITA-II, DATED 03-06-2022
CBDT revises guidelines for compulsory selection of ITRs for Scrutiny during FY 2022-23
Editorial Note: The CBDT has revised guidelines for compulsory selection of returns for Complete scrutiny during the financial year 2021-23 in cases pertaining to search and seizure/requisition.
CBDT releases MLI synthesised text for India- Estonia DTAA
Editorial Note: The Central Board of Direct Taxes (CBDT) has released the synthesised text for India- Estonia DTAA., incorporating the changes made by the MLI on the basis of respective positions taken by both the countries. The MLI provisions that are applicable are included in boxes in the relevant provisions of the convention.
NOTIFICATION NO. INV-11/2/2021—INV/4670, DATED 03-06-2022
Central Govt. approves 8.10% interest rate on provident fund deposits for year 2021-2022
Editorial Note: The Ministry of Labour and Employment, Government of India has conveyed the approval of the Central Government to credit interest @ 8.10% for the year 2021-22 to the account of each member of the EPF scheme.
SECTION 9 OF THE INCOME-TAX ACT, 1961 - INCOME - DEEMED TO ACCRUE OR ARISE IN INDIA
Royalty/FTS - Data processing services : Where assessee, Hong Kong-based company, mainly engaged in business of providing services/facilities for data processing through computer hardware and software to banking entities, had entered into an agreement with SCB, India for provision of data processing support services, since there was neither transfer of any of right in respect of any patent, invention, model, etc., or process or trademark or any similar property by assessee to SCB India, nor was there any imparting of information and entire equipment and technology which were used for processing data were solely for performing activity of assessee for itself and data were processed through programmed software which was standard facility, without any human intervention, payment made by SCB to assessee for said services did not fall within purview of royalty or fee for technical services under section 9 - Atos Information Technology HK Ltd. v. Deputy Commissioner of Income-tax (International Taxation) - [2022] 138 taxmann.com 439 (Mumbai - Trib.)
SECTION 10(10D) OF THE INCOME-TAX ACT, 1961 - INSURANCE POLICY, SUM RECEIVED UNDER
Life insurance policy: Deduction in respect of any premium or other payment paid on an insurance policy would be available in respect of any sum of premium upto 20 per cent of the sum assured - Bishista Bagchi v. Deputy Commissioner of Income-tax - [2022] 138 taxmann.com 419 (Kolkata - Trib.)
SECTION 23 OF THE INCOME-TAX ACT, 1961 - INCOME FROM HOUSE PROPERTY - ANNUAL VALUE
Mixed-use charges: Where 'mixed-used charges' were paid for purpose of regularizing usage of residential premises for certain commercial purposes which could not be construed as tax levied by local authority/Municipal Corporation and said collection of annual mixed-used charge would not make any difference in annual let out the value of the property, said sum was not allowable as a deduction as per proviso to section 23(1) - Amar Chand Garg v. ACIT - [2022] 138 taxmann.com 417 (Delhi - Trib.)
SECTION 37(1) OF THE INCOME-TAX ACT, 1961 - BUSINESS EXPENDITURE - ALLOWABILITY OF
Brokerage: Where assessee had made payment to 'S' and said payment had not been made for acquiring a brand name, but for facilitating the acquisition of brand name, which in turn, made substantial improvement in earning capacity of assessee's business, expenditure incurred by assessee company for payment made to 'S' was a revenue expenditure - Principal Commissioner of Income-tax v. Shalini Properties & Developers (P.) Ltd. - [2022] 138 taxmann.com 446 (Calcutta)
SECTION 48 OF THE INCOME-TAX ACT, 1961 - CAPITAL GAINS - COMPUTATION OF
Sum assured on an insurance policy: Where assessee paid the premium on the life insurance policy and the amount of premium paid by assessee, which was more than 20 per cent of the sum assured was, in fact, the investment made by the assessee, therefore, entire maturity value/gains at the time of extinguishment of rights of the assessee in said policy i.e. on date of maturity were liable to be treated as capital, gains, however, while computing capital gains, cost of acquisition will be taken as the amount paid towards premium minus 20 per cent of the sum assured, which amount shall be treated as not part of the investment, rather towards the cost of hedging of risk under an insurance policy - Bishista Bagchi v. Deputy Commissioner of Income-tax - [2022] 138 taxmann.com 419 (Kolkata - Trib.)
SECTION 56 OF THE INCOME-TAX ACT, 1961 - INCOME FROM OTHER SOURCES - CHARGEABLE AS
Valuation of shares: Where assessee, a joint venture company, formed by a resident company and a non-resident company, issued shares to non-resident shareholders at a higher amount than to resident shareholders, in view of the fact that project costs of the assessee were to be funded in the ratio of 40 per cent by non-resident and 60 per cent by the resident entity, such valuation of shares issued to non-resident shareholders was justified and, thus, order of AO rejecting such valuation of shares by the assessee in case of non-resident was to be set aside - Deputy Commissioner of Income-tax v. Mais India Medical Devices (P.) Ltd. - [2022] 139 taxmann.com 94 (Delhi - Trib.)
SECTION 80 OF THE INCOME-TAX ACT, 1961 - LOSSES - LOSS RETURN
Set off of b/f capital loss cannot be disallowed u/s 143(1) r.w.s. 80 when ITR for relevant AY was filed well within the due date - Kantibhai Ugarbhai Patel v. Commissioner of Income-tax (Appeals) - [2022] 139 taxmann.com 74 (Ahmedabad - Trib.)
SECTION 92CA OF THE INCOME-TAX ACT, 1961 - TRANSFER PRICING - REFERENCE TO TPO
Sub-section (3): Time-limit specified under section 92CA(3A) is mandatory and not a directory and, therefore, TPO is bound by time-limit for passing of order under section 92CA(3) - Swiss Re Global Business Solution India (P.) Ltd. v. Deputy Commissioner of Income-tax - [2022] 138 taxmann.com 418 (Bangalore - Trib.)
SECTION 220 OF THE INCOME-TAX ACT, 1961 - COLLECTION AND RECOVERY OF TAX - WHEN TAX PAYABLE AND WHEN ASSESSEE DEEMED-IN-DEFAULT
Pre-deposit for stay: Where Assessing Authority directed the assessee to deposit 20 per cent of demand of tax for a stay of whole demand and had dealt with all issues raised by the assessee, Assessing Authority was justified in not exercising discretion to grant an unconditional stay or stay on payment of lesser amount than 20 per cent of tax demand - Mascot Construction Co. v. Principal Commissioner of Income tax - [2022] 138 taxmann.com 443 (Bombay)
SECTION 245 OF THE INCOME-TAX ACT, 1961 - REFUNDS - SETTING OFF AGAINST TAX DUE
Condition precedent: Where refund adjustment was sought to be made against demand which was the subject matter of appeal and had been stayed by virtue of assessee having deposited 20 per cent of tax demand and assessee had made out his objections to notice under section 245, the action of revenue in adjusting refund as regards the subject matter of intimation issued under section 245 was to be set aside and the matter was to be remanded back for reconsideration of aspect relating to notice under section 245 - GMR Airports Ltd. v. Assistant Director of Income-tax - [2022] 138 taxmann.com 441 (Karnataka)
GOODS AND SERVICES TAX LAWS
CLASSIFICATION OF GOODS
Paintings: GST is payable at 12 per cent on paintings bought from individual art collectors - Astaguru Auction House (P.) Ltd., In re - [2022] 138 taxmann.com 522 (AAR - MAHARASHTRA)
Old cars: Old Cars are liable to 18 per cent GST - Astaguru Auction House (P.) Ltd., In re - [2022] 138 taxmann.com 522 (AAR - MAHARASHTRA)
Old jewellery: On old jewellery, GST is payable at 3 per cent - Astaguru Auction House (P.) Ltd., In re - [2022] 138 taxmann.com 522 (AAR - MAHARASHTRA)
Antique jewellery of age exceeding 100 years: GST is payable at 12 per cent on antique jewellery and antique watches - Astaguru Auction House (P.) Ltd., In re - [2022] 138 taxmann.com 522 (AAR - MAHARASHTRA)
Old watches: On watches with precious metal cases, GST is payable at 18 per cent - Astaguru Auction House (P.) Ltd., In re - [2022] 138 taxmann.com 522 (AAR - MAHARASHTRA)
领英推荐
Antique watches: Watches including old watches liable to 18 per cent - Astaguru Auction House (P.) Ltd., In re - [2022] 138 taxmann.com 522 (AAR - MAHARASHTRA)
Antique books: GST is payable at 12 per cent on antique books - Astaguru Auction House (P.) Ltd., In re - [2022] 138 taxmann.com 522 (AAR - MAHARASHTRA)
Desalinated water: Desalinated water is classifiable under Heading No. 2201 and supply of the same as potable water is eligible for exemption in terms of Entry at Sl. No. 99 of Notification No. 2/2017-Central Tax (Rate) - Chennai Water Desalination Ltd., In re - [2022] 138 taxmann.com 523 (AAR - TAMILNADU)
CLASSIFICATION OF SERVICES
Supply of desalinated water: Exemption to supply of desalinated water is not available under Notification No. 12/2017-Central Tax (Rate) as notification is applicable only to services and supply of desalinated water is in nature of supply of goods - Chennai Water Desalination Ltd., In re - [2022] 138 taxmann.com 523 (AAR - TAMILNADU)
RULE 32 OF THE CENTRAL GOODS AND SERVICES TAX RULES, 2017 - DETERMINATION OF VALUE IN RESPECT OF CERTAIN SUPPLIES
Rule 32(5) providing for taxable value as the difference between the purchase price and sale price will also be applicable in respect of second-hand goods such as paintings, antique watches, antique jewellery, old jewellery, old watches and antique books - Astaguru Auction House (P.) Ltd., In re - [2022] 138 taxmann.com 522 (AAR - MAHARASHTRA)
SECTION 62 OF THE CENTRAL GOODS AND SERVICES TAX ACT, 2017 - ASSESSMENT - NON - FILERS OF RETURNS
The penalty imposed through a rectification order is an additional liability and such an order passed without providing the opportunity for a hearing is not sustainable - Spy Agro Industries Ltd. v. Union of India - [2022] 139 taxmann.com 69 (Andhra Pradesh)
SECTION 114 OF THE CUSTOMS ACT, 1962 - PENALTY FOR ATTEMPT TO EXPORT GOODS IMPROPERLY, ETC.
Customs Broker lending out its digital ID and password to a logistic & clearing firm and handing over it blank annexures after putting signature thereon, which are used for the attempt to smuggle red sanders by filing shipping bills in name of non-existent exporters, CHA can be proceeded with for imposition of penalty under Section 114 of Customs Act, 1962 - R. S. Arunachalam v. Commissioner of Customs - [2022] 139 taxmann.com 67 (Chennai - CESTAT)
INSOLVENCY AND BANKRUPTCY CODE
SECTION 12A OF THE INSOLVENCY AND BANKRUPTCY CODE, 2016 - CORPORATE INSOLVENCY RESOLUTION PROCESS - WITHDRAWAL OF APPLICATION
NCLT cannot sit in appeal over the commercial wisdom of CoC in voting for withdrawal of CIRP - Vallal Rck v. Siva Industries and Holdings Ltd. - [2022] 139 taxmann.com 68 (SC)
SECTION 35 OF THE INSOLVENCY AND BANKRUPTCY CODE, 2016 - CORPORATE LIQUIDATION PROCESS - LIQUIDATOR
Powers and duties of: Sale by a Liquidator under IBC is a sale on behalf of the corporate debtor, and, therefore, such sale cannot be termed to be involuntary sale and a transfer fee can be levied when the sale is made by a Liquidator under IBC - Cotton Casuals (India) (P.) Ltd. v. Kanchan Dutta - [2022] 138 taxmann.com 513 (NCLAT- New Delhi)
SECTION 53 OF THE INSOLVENCY AND BANKRUPTCY CODE, 2016 - CORPORATE LIQUIDATION PROCESS
Assets, distribution of: Where corporate debtor was sold in e-auction process to appellant-auction purchaser in liquidation proceedings, the corporate debtor was sold as going concerned and appellant was not liable to pay any past or remaining unpaid outstanding liabilities of the corporate debtor - Shiv Shakti Inter Globe Exports (P.) Ltd. v. KTC Foods (P.) Ltd. - [2022] 138 taxmann.com 511 (NCLAT- New Delhi)
OPINIONS
Management Support Services vis-à-vis Other Income – An Analysis on the position under Treaties – Part II - CA Sri Harsha, Partner, SBS and Company LLP, CA Narendra, Senior Associate, SBS and Company LLP - [2022] 139 taxmann.com 96 (Article)
Special Valuation Branch (SVB) under Custom laws - Monitoring Instrument in International Trade - CA Mukul Gupta, Partner, NDM Advisors LLP, CA Bhawna Goel, Director, NDM Advisors LLP - [2022] 139 taxmann.com 95 (Article)
A Simplified overview of GST on various aspects of Real Estate Sector - CS Ajay Nolakha, B.Com, CS, LLB, DLL, MA (Eco.) - [2022] 139 taxmann.com 70 (Article)
Standard Operating Practise for NCLT Cases by CBIC – A facilitator for IBC Process - Shawn Jeff Christopher, Insolvency Professional & Chartered Accountant in Practice - [2022] 139 taxmann.com 97 (Article)
That’s it from us for today! Stay Tuned for more updates from?Taxmann.com
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