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
SECTION 9 OF THE INCOME-TAX ACT, 1961 - INCOME - DEEMED TO ACCRUE OR ARISE IN INDIA
Royalty/FTS - Commission : Where assessee had paid sales commission to foreign agents and foreign agents had provided details of market trends and requirements of foreign buyers, which were usually provided by any agent and sales commission had been paid on value of sales effected through them and in effect, they had acted as link between assessee and its customers, tax authorities were not correct in law in holding that commission was paid for rendering technical managerial services - Deccan Creations (P.) Ltd. v. Deputy Commissioner of Income-tax - [2022] 134 taxmann.com 144 (Bangalore - Trib.)
SECTION 92C OF THE INCOME-TAX ACT, 1961 - TRANSFER PRICING - COMPUTATION OF ARM'S LENGTH PRICE
Methods for determination of - Most appropriate method, determination of : Where assessee-company, engaged in provision of ITeS to both AE's as well as non-AE's, applied internal TNMM to benchmark said transaction but TPO proceeded to apply external TNMM on ground that nature of services being performed in AE segment were totally different from nature of services in non-AE segment and no audited segments were maintained, since services rendered to AE and non-AE were that of customer care and technical support and TPO/Assessing Officer had not pointed out any discrepancy related to segmental analysis based on valid allocation keys furnished by assessee in its TP study, Assessing Officer should adopt internal TNMM for benchmarking said transaction - Majorel India (P.) Ltd. v. ACIT - [2022] 134 taxmann.com 148 (Delhi - Trib.)
Adjustments - Interest : Where TPO had treated delayed receipt of receivables from AEs as unsecured loans advanced to AEs and applied interest rate of 12.60 per cent (i.e., PLR of SBI 300 basis points) to receivables, DRP had rightly directed TPO to compute adjustment by applying rate of LIBOR plus 400 basis points on receivables due from its AE - Majorel India (P.) Ltd. v. ACIT - [2022] 134 taxmann.com 148 (Delhi - Trib.)
Adjustment - Operating revenue : Where assessee-company reported international transaction of Import of raw material and it also received subsidy under Package Scheme of Incentives (PSI) given by Government of Maharashtra, which was included in operating revenues, since purpose of subsidy was industrial growth and it was linked with setting up of industrial units and, thus, it was a capital receipt, it could not form part of operating revenue for benchmarking transaction of import of raw material - Hyundai Construction Equipment India (P.) Ltd. v. ACIT - [2022] 134 taxmann.com 143 (Pune - Trib.)
If there is no value addition to goods traded, RPM is the MAM, but value of manufacturing is to be excluded - Robertshaw Controls India (P.) Ltd. v. Assistant Commissioner of Income-tax, Circle-5 - [2022] 134 taxmann.com 332 (Pune - Trib.)
SECTION 244A OF THE INCOME-TAX ACT, 1961 - REFUNDS - INTEREST ON
Scope of : Where final refund determined by ITSC was wrongfully retained by Assessing Officer and same was granted after a delay of considerable period of almost 98 months, since final refund determined by ITSC would fall within ambit of expression 'any amount due' under section 244A, assessee was to be granted interest under said section on said refund - Kotak Mahindra Bank Ltd. v. Assistant Commissioner of Income-tax - [2022] 134 taxmann.com 147 (Mumbai - Trib.)
GOODS AND SERVICES TAX LAWS
CLASSIFICATION OF SERVICES
Medical education services : Fees and charges received from students for imparting medical education are exempted as courses are recognized by law - Kasturba Health Society, In re - [2022] 134 taxmann.com 252 (AAR - MAHARASHTRA)
Services provided by hospital : Recoupment charges recovered by hospital from in-patients are exempted under healthcare service - Kasturba Health Society, In re - [2022] 134 taxmann.com 252 (AAR - MAHARASHTRA)
Health Insurance Services by hospital : Charges received by hospital from patients as regards health insurance scheme is liable to GST of 18 per cent since hospital is an insurance service provider as per law - Kasturba Health Society, In re - [2022] 134 taxmann.com 252 (AAR - MAHARASHTRA)
Renting services by hospital : Renting of space to bank, canteen service provider and parking by hospital is liable to GST of 18 per cent - Kasturba Health Society, In re - [2022] 134 taxmann.com 252 (AAR - MAHARASHTRA)
Restaurant service by Hospital canteen : Supply of food by hospital canteen to in-patients and employees is exempted but taxable at 5 per cent when supplied to others - Kasturba Health Society, In re - [2022] 134 taxmann.com 252 (AAR - MAHARASHTRA)
SECTION 22 OF THE CENTRAL GOODS AND SERVICES TAX ACT, 2017 - REGISTRATION - PERSONS LIABLE FOR
Registration is required when taxable services of renting of property and restaurant services are supplied and turnover is above threshold limit - Kasturba Health Society, In re - [2022] 134 taxmann.com 252 (AAR - MAHARASHTRA)
SECTION 123 OF THE FINANCE ACT, 2019 - SABKA VISHWAS - (LEGACY DISPUTE RESOLUTION) SCHEME
Benefit of SVLDRS is available when particular amount has been admitted as tax liability in statement tendered by Director during investigations; Such admission can be termed as quantification of duty - Nabeel Construction (P.) Ltd. v. Union of India - [2022] 134 taxmann.com 335 (Bombay)
领英推荐
Rejection of declaration without affording an opportunity of personal hearing violates principles of natural justice rendering the decision invalid in law - Nabeel Construction (P.) Ltd. v. Union of India - [2022] 134 taxmann.com 335 (Bombay)
COMPANY AND SEBI LAWS
NOTIFICATION NO. SEBI/LAD-NRO/GN/2022/72, DATED 28-01-2022
SEBI amends KYC registration agency regulations; mandates audit trail of the client’s KYC records
Editorial Note : SEBI notifies SEBI {KYC (Know Your Client) Registration Agency} (Amendment) Regulations, 2022 on 28/01/2022. Amendments has been made in regulations 2,7,14,15,16,18 and Schedule1. SEBI has introduced two new terms namely “change in control” & “controlling interest”. Now it is mandatory to obtain board approval whenever there is a change in the controlling interest of KRA. Further, it is mandatory for KRA to maintain audit trails of the client’s KYC records.
COMPETITION LAW
SECTION 3 OF THE COMPETITION ACT, 2002 - PROHIBITION OF AGREEMENTS
Anti-competitive agreements : Where impugned acts of table tennis promoting society in communicating its decision of restricting players/coaches from joining/playing for non-affiliated clubs/organizations vide WhatsApp messages prima facie seemed to limit or control provision of services, and thereby stood captured within framework of section 3(1) read with section 3(3) and also, bye-laws of National Sports Federation prima facie appeared to be unfair being restrictive in nature and denied market access to players as well as organisers, DG was to be directed to conduct investigation into matter - TT Friendly Super League Association v. Suburban Table Tennis Association - [2022] 134 taxmann.com 121 (CCI)
INSOLVENCY AND BANKRUPTCY CODE
SECTION 3(12) OF THE INSOLVENCY AND BANKRUPTCY CODE, 2016 - CORPORATE INSOLVENCY RESOLUTION PROCESS
Default : Where agreed debt forming part of settlement agreement between corporate debtor and operational creditor was an admitted operational debt which had to be paid off within stipulated time, since corporate debtor had failed to perform its obligation under aforesaid agreement, petition for initiating corporate insolvency resolution process against corporate debtor was to be admitted even if specific permission had not been sought to re-file proceedings on cause of action having arisen in favour of operational creditor - Jai Balaji Industries Ltd. v. BST Infratech Ltd. - [2022] 134 taxmann.com 120 (NCLT - Kolkata)
SECTION 28 OF THE INSOLVENCY AND BANKRUPTCY CODE, 2016 - CORPORATE INSOLVENCY RESOLUTION PROCESS - COMMITTEE OF CREDITORS - APPROVAL OF
Approved RP that extinguishes FDs without fully paying FD holders, is legally valid under IBC,2016 - Vinay Kumar Mittal v. Dewan Housing Finance Corporation Ltd. - [2022] 134 taxmann.com 333 (NCL-AT)
SECTION 49 OF THE INSOLVENCY AND BANKRUPTCY CODE, 2016 - CORPORATE LIQUIDATION PROCESS - TRANSACTIONS DEFRAUDING CREDITORS
NCLAT sets aside RP giving recoveries from avoidance transactions to SRA instead of creditors of CD; sends RP back to CoC - 63 Moons Technologies Ltd. v. Administrator of Dewan Housing Finance Corporation Ltd. - [2022] 134 taxmann.com 334 (NCL-AT)
OPINIONS
Future of Non-Fungible tokens in India – Mystery yet to be unravelled - Ankita Chowdhry, Chartered Accountant - [2022] 134 taxmann.com 338 (Article)
Union Budget 2022: Tax expectations from the IBC lens - Mehak Ahuja, CA, Harsh Biyani, CA, Amit Bahl, CA - [2022] 134 taxmann.com 337 (Article)
That’s it from us for today! Stay Tuned for more updates from?Taxmann.com
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