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
Notification No. 66/2022, Dated 17-06-2022
Applicability of TP Safe Harbour Rules extended till AY 2022-23: CBDT
Editorial Note: The CBDT has extended the applicability of provisions of Rule 10TD(1) & Rule 10(2A) till Assessment Year 2022-23. Rule 10TD prescribes a list of eligible international transactions where the transfer price declared by the assessee shall be required to be accepted by the Income-tax Authorities.
Press Release, Dated 17-06-2022
Income-tax Dept. conducted search operation in J&K and Delhi
Editorial Note: Income Tax Department has carried out search and seizure operations on 15.06.2022 on a leading manufacturer and seller of Jamawar Shawls, Pashmina and Kashmiri Shawls. The search operation covered more than 15 premises spread across Srinagar, Anantnag and Delhi. The search action has led to the seizure of unaccounted cash of more than Rs. 46 lakh.
Press Release, Dated 17-06-2022
Net Direct Tax collections for FY 2022-23 grown at over 45% over collections of the preceding year: CBDT
Editorial Note: The CBDT has released data for its direct tax collections for the Financial Year 2022-23. The figures of Direct Tax collections for the Financial Year 2022-23, as of 16-06-2022, have shown an increase of 45% over the collections of the preceding year.
Notification No. G.S.R. 454(E), Dated 15-06-2022
Govt. notifies Sovereign Gold Bond Scheme 2022-23
Editorial Note: The Government has notified Sovereign Gold Bond Scheme 2022-23. The Sovereign Gold Bonds will be issued in two tranches and the period of subscription would be June 20-June 24, 2022 and August 22-August 26, 2022.
SECTION 2(47) OF THE INCOME-TAX ACT, 1961 - CAPITAL GAINS - TRANSFER
Immovable property: Where assessee stood guarantor for a bank loan and his mortgaged property was taken over and sold in auction by the bank, since there were conflicting judicial precedents on the issue under consideration as to whether the transfer of mortgaged asset would amount to transfer of an asset or not where no consideration flew to the assessee, assessee's view that no capital gains accrued in his hands would be a plausible one and no penalty could be levied on the assessee under section 271(1)(c) for non-disclosure of capital gains - Ajaybhai I Gogia v. Income-tax Officer - [2022] 139 taxmann.com 125 (Rajkot - Trib.)
SECTION 4 OF THE INCOME-TAX ACT, 1961 - INCOME - CAPITAL OR REVENUE RECEIPTS
Subsidy: Where assessee was granted subsidy under West Bengal Incentive Scheme, 2000 and amount of subsidy which was given was in nature of reimbursement of 75 per cent of sales tax/VAT actually paid by assessee, since the object of assistance under subsidy scheme was to enable the assessee to set up a new unit and reimbursement of 75 per cent of sales tax paid had been termed as Industrial Promotion Assistance, receipt of subsidy would be a capital receipt - Principal Commissioner of Income-tax v. Budge Budge Refineries Ltd. - [2022] 139 taxmann.com 124 (Calcutta)
SECTION 9 OF THE INCOME TAX ACT, 1961 - INCOME - DEEMED TO ACCRUE OR ARISE IN INDIA
The mere presence of PE in India will not trigger a higher rate of tax under Article 7(1) on interest received by Japanese co. from Indian customer - Deputy Commissioner of Income-tax, International Taxation, Circle 3(2)(1), Mumbai v. Marubeni Corporation - [2022] 139 taxmann.com 367 (Mumbai - Trib.)
SECTION 10(23C) OF THE INCOME-TAX ACT, 1961 - EDUCATIONAL INSTITUTION
Denial of exemption: Application of assessee for grant of approval under section 10(23C)(vi) had rightly been rejected as it was time-barred and there is no statutory provision nor there is any power for Commissioner (Exemption) to condone the delay after considering reasonable reasons - Bishnupur Public Education Institute v. Commissioner of Income-tax (Exemption) - [2022] 139 taxmann.com 121 (Kolkata - Trib.)
SECTION 40A(3) OF THE INCOME-TAX ACT, 1961 - BUSINESS DISALLOWANCE - CASH PAYMENT EXCEEDING PRESCRIBED LIMITS
Where Assessing Officer made disallowance under section 40A(3) in respect of cash payments exceeding prescribed limit for buying Stock-in-trade from two companies, since assessee claimed that payment in cash was made out of business expediency and on the insistence of seller, such claim of the assessee was required to be verified by Assessing Officer before making disallowance, therefore, the matter was to be remanded for doing same - T C Srinivasa v. Income-tax Officer - [2022] 139 taxmann.com 120 (Bangalore - Trib.)
SECTION 41(1) OF THE INCOME-TAX ACT, 1961 - REMISSION OR CESSATION OF TRADING LIABILITY
Sales tax: Provision of section 41(1) could be invoked only when the assessee had claimed a deduction in the earlier year at the time of the creation of liability and therefore, where the assessee had not claimed any deduction in the earlier year towards sales tax portion of subsidy, provision of section 41(1) could not have been invoked - Principal Commissioner of Income-tax v. Budge Budge Refineries Ltd. - [2022] 139 taxmann.com 124 (Calcutta)
SECTION 92CA OF THE INCOME-TAX ACT, 1961 - TRANSFER PRICING - REFERENCE TO TPO
Where a reference to TPO under section 92CA was made beyond the permissible period of 21 months from the end of the relevant assessment year, as prescribed under section 153, such reference being barred by limitation was liable to be set aside - Virtusa Consulting Services (P.) Ltd. v. Dispute Resolution Panel (DRP) - [2022] 139 taxmann.com 361 (Madras)
SECTION 132B OF THE INCOME-TAX ACT, 1961 - SEARCH AND SEIZURE - RETAINED ASSETS, APPLICATION OF
Period of limitation: Where assessee-company had filed various applications under section 132B for release of diamonds seized during a search conducted upon the company, namely AD, however, revenue retained said asset even after expiry of 120 days from date of last authorization for search, such seized diamonds were to be released to the assessee in view of the provision of section 132B(1) - Ashish Jayantilal Sanghavi v. Income-tax Officer - [2022] 139 taxmann.com 126 (Gujarat)
SECTION 271(1)(c) OF THE INCOME-TAX ACT, 1961 - PENALTY - FOR CONCEALMENT OF INCOME
Appeal against addition, the effect of: Merely because assessee's appeal in respect of addition on basis of which penalty under section 271(1)(c) was levied, had been admitted by High Court, it could not be said that issue was debatable so as to delete penalty - Ajaybhai I Gogia v. Income-tax Officer - [2022] 139 taxmann.com 125 (Rajkot - Trib.)
GOODS AND SERVICES TAX LAWS
CLASSIFICATION OF GOODS
Oxygen plant: PSA medical oxygen generation plant is merely an air separator classifiable under tariff item 8421 39 90 and liable to GST of 18 per cent; it is not a therapeutic device - Freeze Tech Innovations, In re - [2022] 139 taxmann.com 167 (AAR - TAMILNADU)
Dry powder containing protein powder: Dry powder containing protein powder with vitamins and minerals is classifiable under heading 2106 as it is in the nature of protein concentrate - Windlas Biotec Ltd., In re - [2022] 139 taxmann.com 359 (AAAR-UTTARAKHAND)
SECTION 2(52) OF THE CENTRAL GOODS AND SERVICES TAX ACT, 2017 - GOODS
Transfer of business unit as a whole with assets and liabilities will be treated as a transfer of going concern for the purpose of exemption subject to fulfilment of conditions and production of documentary evidence with regard to entity's ability to continue in operation for foreseeable future - Cosmic Ferro Alloys Ltd., In re - [2022] 139 taxmann.com 360 (AAR-WEST BENGAL)
SECTION 13 OF THE CENTRAL GOODS AND SERVICES TAX ACT, 2017 - SUPPLY - TIME OF SUPPLY OF SERVICES
Escalated value recovered by the service provider for construction of road shall be added to transaction value for payment of GST as a service provider and service recipient are unrelated parties and the contract has been executed after implementation of GST though awarded before GST - B P Sangle Constructions (P.) Ltd., In re - [2022] 139 taxmann.com 166 (AAR - MAHARASHTRA)
SECTION 111 OF THE CUSTOMS ACT, 1962 - CONFISCATION OF IMPROPERLY IMPORTED GOODS, ETC.
Where appellant filed a bill of entry without IEC due to delay in granting IEC number by Government Department; confiscation of imported goods and redemption of the fine was to be set aside - Bankey Bihari Engineers LLP v. Commissioner of Customs - [2022] 139 taxmann.com 355 (New Delhi - CESTAT)
领英推荐
COMPANY AND SEBI LAWS
Notification No. G.S.R. 456(E), Dated 17-06-2022
Govt. amends NFRA Rules, 2018; prescribes a maximum penalty up to Rs. 5000 for any non-compliance with NFRA rules
Editorial Note: The Government has notified the National Financial Reporting Authority Amendment Rules, 2022. As per the amended rules in case of the contravention a maximum fine of Rs. 5,000 will be levied, and where the contravention is a continuing one, a further fine not exceeding Rs. 500 for every day after the first during which the contravention continues will be levied. Earlier the general penalty as mentioned in section 450 of the Companies Act, 2013 used to be levied.
Notification No. S.O. 2809(E), Dated 17-06-2022
Govt. designates the Court of Additional Special Judge, Jammu & Srinagar as the ‘Special Court’ under SCRA, 1956
Editorial Note: The Central Government has designated the Court of Additional Special Judge, Anti-Corruption, Jammu and Srinagar as the Special Court under Section 26A of the Securities Contracts (Regulation) Act, 1956 and Section 22C of the Depositories Act, 1996 with the objective of exercising the jurisdiction in Jammu division and Kashmir division respectively in the Union territory of Jammu and Kashmir.
Notification No. S.O. 2810(E), Dated 17-06-2022
Govt. designates the Court of Sessions Judge, Leh and Kargil as the ‘Special Courts’ under SCRA, 1956
Editorial Note: The Central Government has designated the Court of Sessions Judge, Leh and Kargil as the Special Courts under Section 26A of the Securities Contracts (Regulation) Act, 1956 and Section 22C of the Depositories Act, 1996 with the objective of exercising the jurisdiction in District Leh and District Kargil respectively in the Union territory of Ladakh.
SECTION 15HA OF THE SECURITIES AND EXCHANGE BOARD OF INDIA ACT, 1992 - PENALTY FOR FRAUDULENT AND UNFAIR TRADE PRACTICES
SEBI WTM had rightly barred stock brokers for 4 years from proprietary trading for manipulation of share prices - MBL and Company Ltd. v. Securities & Exchange Board of India - [2022] 139 taxmann.com 357 (SC)
SECTION 212 OF THE COMPANIES ACT, 2013 - SERIOUS FRAUD INVESTIGATION OFFICE - INVESTIGATION BY
SC sets aside Delhi HC order staying SFIO investigations in respect of 9 Sahara Group companies - Serious Fraud Investigation Office v. Sahara Housing Investment Corporation Limited - [2022] 139 taxmann.com 358 (SC)
FEMA BANKING AND INSURANCE LAWS
SECTION 50 OF THE PREVENTION OF MONEY LAUNDERING ACT, 2002 - POWERS OF AUTHORITIES REGARDING SUMMONS, PRODUCTION OF DOCUMENTS AND TO GIVE EVIDENCE, ETC.
A person cannot as a matter of right claim to have his lawyers present during the recording of his statement u/s 50 of PMLA - Director of Enforcement v. Satyendar Kumar Jain - [2022] 139 taxmann.com 356 (Delhi)
INSOLVENCY AND BANKRUPTCY CODE
SECTION 30 OF THE INSOLVENCY AND BANKRUPTCY CODE, 2016 - CORPORATE INSOLVENCY RESOLUTION PROCESS - RESOLUTION PLAN - SUBMISSION OF
Institutions of CoC, IRP, RP, Liquidator, IBBI, Insolvency Professional Agencies, and Information utilities are statutory/public authorities and these institutions can certainly be termed as an agency or instrumentality of the state who carry out executive, administrative, commercial and in some situations, quasi-judicial functions as well, therefore all these actors/institutions associated with the conduct of CIRP are bound to follow principles of natural justice which are enshrined in Constitution of India as a public policy, whether codified or not and same are to be applied necessarily in all administrative/statutory functions under I&B Code unless excluded explicitly or by necessary implications - Rathi Graphic Technologies Ltd. v. Raj Kumar Rathi - [2022] 139 taxmann.com 362 (NCLT - Allahabad)
SECTION 33 OF THE INSOLVENCY AND BANKRUPTCY CODE, 2016 - CORPORATE LIQUIDATION PROCESS
Initiation of: Where appellant-corporate debtor had failed to establish by means of any documentary evidence that there was a material irregularity in the liquidation process, the order of liquidation passed by Adjudicating Authority was justified - Anilkumar Dudalal Kaneriya v. CA Vineeta Maheshwari - [2022] 139 taxmann.com 174 (NCLAT- New Delhi)
SECTION 238A OF THE INSOLVENCY AND BANKRUPTCY CODE, 2016 - CORPORATE INSOLVENCY RESOLUTION PROCESS
Limitation period: Where the account of the corporate debtor was declared NPA on 30-5-2015 but the corporate debtor acknowledged its liability through numerous revival letters and the last such revival letter was dated 28-11-2015, the application filed under section 7 on 6-7-2018 was not barred by limitation - Anilkumar Dudalal Kaneriya v. CA Vineeta Maheshwari - [2022] 139 taxmann.com 174 (NCLAT- New Delhi)
SECTION 240A OF THE INSOLVENCY AND BANKRUPTCY CODE, 2016 - MICRO, SMALL AND MEDIUM ENTERPRISES
Application of Code to: Where corporate debtor was not MSME as on date of filing of the application under section 7 or as on date of commencement of CIRP and was not even registered as an MSME under MSME Act, benefits under section 240A could not be granted - Anilkumar Dudalal Kaneriya v. CA Vineeta Maheshwari - [2022] 139 taxmann.com 174 (NCLAT- New Delhi)
OPINIONS
Grey Maze of Tax Evasion and Tax Avoidance vis-à-vis to Corporate Governance: Emerging Apprehensions of a Digital Economy - Rishi Raj Bhardwaj, Assistant Professor - [2022] 139 taxmann.com 366 (Article)
An Explainer on CBDT Circular on TDS on Benefits or Perquisites u/s 194R - Mayank Mohanka, Senior Partner in M/s. S M Mohanka & Associates & Founder Director in Tax Aaram India Pvt. Ltd. - [2022] 139 taxmann.com 353 (Article)
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