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
Disallowance justified for non-deduction of TDS from payment to Netherlands entity for use of its ICT infrastucture, as the same is taxable as "royalty" - Vanderlande Industries (P.) Ltd. v. Assistant Commissioner of Income-tax, Circle-13 - [2022] 135 taxmann.com 144 (Pune - Trib.)
SECTION 68 OF THE INCOME-TAX ACT, 1961 - CASH CREDITS
Bank deposits : Notice issued in SLP filed against High Court ruling that where AO made addition on account of a huge amount of cash deposited in bank account of assessee, since Tribunal found that along with deposits made by assessee there were also simultaneous withdrawals from its bank account leaving behind a negligible balance which showed that such deposits and withdrawals from bank represented trading activities of assessee, Tribunal was justified in estimating income only at rate of 2 per cent of such amount deposited with bank - Principal Commissioner of Income-tax v. Shitalben Saurabh Vora - [2021] 133 taxmann.com 442 (SC)
SECTION 80P OF THE INCOME-TAX ACT, 1961 - DEDUCTIONS - INCOME OF CO-OPERATIVE SOCIETIES
Where assessee had not claimed deduction under section 80P(2)(a)(i) in its return of income, it could not be allowed such deduction in view of condition imposed under section 80A(5) even though it was otherwise eligible for such deduction - Shree Datta Prasad Sahakari Patsanstha Ltd. v. Income-tax Officer - [2022] 134 taxmann.com 324 (Mumbai - Trib.)
SECTION 147 OF THE INCOME-TAX ACT, 1961 - INCOME ESCAPING ASSESSMENT - GENERAL
Second proviso to section 147 : Where notice under section 147 was issued to assessee on ground that mistakes had occurred in assessment order in over-assessing business loss of assessee, since reopening was made on issues which were under appeal before Commissioner (Appeals) in original assessment, reassessment proceedings in subject assessment year were contrary to second proviso to section 147(1) - Principal Commissioner of Income-tax v. Kerala State Electricity Board - [2021] 133 taxmann.com 440 (Kerala)
Power under pre-amended section 147 is power of reassessment, not power of review - Oracle Financial Services Software Ltd. v. Deputy Commissioner of India-tax, Circle 13(1)(1) - [2022] 135 taxmann.com 143 (Bombay)
GOODS AND SERVICES TAX LAWS
PUBLIC NOTICE 48/2015-20, DATED 10-02-2022
Procedure of quota for import of allocation of Calcined Pet Coke & Raw Pet Coke notified: Notice
Editorial Note : The DGFT has issued public notice to notify the procedure of quota for import of allocation of Calcined Pet Coke & Raw Pet Coke for the year 2022-2023.
CLASSIFICATION OF GOODS
Switch Board Cabinet : Switch board cabinet used in Railway coaches and locomotives cannot be called as parts of railway under heading 8607; such items are classifiable under specific heading 8537 and liable to GST of 18% - Prag Polymers, In re - [2021] 133 taxmann.com 433 (AAR- UTTAR PRADESH)
SECTION 7 OF THE CENTRAL GOODS AND SERVICES TAX ACT, 2017 - SUPPLY - SCOPE OF
GST is not applicable on amount recovered by employer from employees for usage of bus transportation facility as supply of service is absent - DR Willmar Schwabe (I) (P.) Ltd., In re - [2021] 133 taxmann.com 434 (AAR- UTTAR PRADESH)
SECTIONS 16 OF THE CENTRAL GOODS AND SERVICES TAX ACT, 2017 - INPUT TAX CREDIT - ELIGIBILITY AND CONDITIONS FOR TAKING CREDIT
Employer can claim input tax credit from 1-2-2019 for providing transportation facility to employees in vehicle having approved seating capacity of more than 13 persons (including driver) to extent of cost borne by him - DR Willmar Schwabe (I) (P.) Ltd., In re - [2021] 133 taxmann.com 434 (AAR- UTTAR PRADESH)
SECTION 54 OF CENTRAL GOODS AND SERVICES TAX ACT, 2017 - REFUND - TAX
Refund of unutilised input tax credit due to exports cannot be curtailed based on amendment to provisions as the same is applicable prospectively - Lankhorst Euronete India (P.) Ltd., In re - [2022] 135 taxmann.com 146 (Commissioner Appeals - GST - Goa)
FEMA BANKING AND INSURANCE LAWS
CIRCULAR NO. 23 RBI/2021-22/155, DATED 10-02-2022
RBI issues operational instructions for 'Credit Default Swap' transactions; allows FPIs to buy/sell CDS protections
Editorial Note : The RBI, issues operational instructions w.r.t transactions in Credit Default Swap (CDS) by Foreign Portfolio Investors (FPIs). FPIs are eligible to be categorised as non-retail users and are allowed to buy and sell CDS protection. The aggregate limit of the notional amount of CDS sold by FPIs shall be 5% of the outstanding stock of corporate bonds. FPIs shall not sell any CDS protection once aggregate limit is utilised. These Directions shall come into effect from May 09, 2022.
CIRCULAR NO. 22 RBI/2021-22/156, DATED 10-02-2022
RBI issues directions on 'Voluntary Retention Route’ (VRR) for FPIs
Editorial Note : RBI has enhanced the investment limit under VRR by issuing Statement on Developmental and Regulatory Policies dated 10-02-2022. VRR limit enhanced to Rs. 2,50,000 crore from earlier limit of Rs.1,50,000 crore. RBI through this circular has provided detailed directions w.r.t VRR such as who will be eligible investors, eligible instruments, how the portfolio will be managed and other operational guidelines. These Directions shall be applicable with effect from 01-04-2022.
领英推荐
CIRCULAR NO. RBI/2021-22/157, DATED 10-02-2022
RBI issues Rupee Interest Rate Derivatives directions; allows banks to deal in forex settled ‘Overnight Indexed Swaps’
Editorial Note : RBI updated the Rupee Interest Rate Derivatives (Reserve Bank) Directions, 2019. Major updation includes defining the “Foreign Currency Settled OIS (FCS-OIS). Market hours for IRD transactions in OTC market shall be from 9:00 AM to 5:00 PM on each business day or as specified by the RBI .A market-maker may undertake transactions in FCS-OIS beyond onshore market hours. Now Non-residents may also undertake FCS-OIS transactions with the market-makers having AD Cat-I for specific purposes.
SECTION 13 OF THE SECURITISATION AND RECONSTRUCTION OF FINANCIAL ASSETS AND ENFORCEMENT OF SECURITY INTEREST ACT, 2002 - ENFORCEMENT OF SECURITY INTEREST
Defaulting Borrower has to clear entire dues to get back his property which was taken over by bank & auctioned under SARFAESI Act - Bank of Baroda v. Karwa Trading Company - [2022] 135 taxmann.com 154 (SC)
INSOLVENCY AND BANKRUPTCY CODE
SECTION 5(8) OF THE INSOLVENCY AND BANKRUPTCY CODE, 2016 - CORPORATE INSOLVENCY RESOLUTION PROCESS
Financial debt : Where appellant/bank sanctioned housing loans to some of Home buyers/allottees who had purchased flats/units in a residential project floated by corporate debtor, since liability to repay home loan was on individual Home buyers, appellant/bank could not be considered as 'secured financial creditor' - Axis Bank Ltd. v. Value Infracon India (P.) Ltd. - [2022] 135 taxmann.com 109 (NCL-AT)
SECTION 31 OF THE INSOLVENCY AND BANKRUPTCY CODE, 2016 - CORPORATE INSOLVENCY RESOLUTION PROCESS - RESOLUTION PLAN
Approval of : Approved Resolution Plan is binding on all creditors including Central Government and State Government, hence, where petitioner underwent a CIRP in which a Resolution Plan had been approved, demands raised against petitioner by Officer of State Government for purpose of issuance of Mining Dues Clearance Certificate and renewal of trading licence which pertained to period prior to Plan Effective date would stand automatically extinguished in terms of approved resolution plan - Ferro Alloys Corpn. Ltd. v. State of Odisha - [2022] 135 taxmann.com 106 (Orissa)
SECTION 61 OF THE INSOLVENCY AND BANKRUPTCY CODE, 2016 - CORPORATE PERSONS ADJUDICATING AUTHORITIES
Appeals and Appellate Authority : Power to recall judgment is not permitted in IBC; neither section 424 of Companies Act, 2013, nor rule 11 of NCLAT Rules, 2016 grants power to NCLAT to recall an order passed by it after said order has been challenged before Supreme Court, same being dismissed - Apya Capital Services (P.) Ltd. v. Guardian Homes (P.) Ltd. - [2022] 135 taxmann.com 105 (NCL-AT)
SECTION 238 OF THE INSOLVENCY AND BANKRUPTCY CODE, 2016 - OVERRIDING EFFECT OF CODE
Recoveries of NHB-Refinanced tagged loans lying with CD, belong to NHB and have to be paid to NHB. These funds are not available for other FCs - Union Bank of India v. National Housing Bank - [2022] 135 taxmann.com 142 (NCL-AT)
NCLAT Approved RP that extinguishes FDs without fully paying FD holders, is legally valid under IBC, 2016 - Raghu K S v. R. Subramaniakumar Administrator of Dewan Housing Finance Corporation Ltd. - [2022] 135 taxmann.com 145 (NCL-AT)
OPINIONS
Budget 2022: Introduction of Crypto tax - Ashesh R. Safi, Partner, Deloitte Haskins and Sells LLP, Kripa Ray, Manager, Deloitte Haskins and Sells LLP, Karan Vakharia, Deputy Manager, Deloitte Haskins and Sells LLP - [2022] 135 taxmann.com 149 (Article)
Taxation of VDA: deciphering the cryptic proposal - Ankita Chowdhry, Chartered Accountant, Shubham Jain, Chartered Accountant - [2022] 135 taxmann.com 150 (Article)
Budget 2022- A Budget for Start-ups - Annanya Mehan, Associate, Sarvaank Associates - [2022] 135 taxmann.com 153 (Article)
Customs proposals– A catalyst to Make in India and PLI schemes - P.S. Krishnan, Partner, Grant Thornton Bharat LLP, Mallikarjun N., Director, Grant Thornton Bharat LLP, Prasanna C.P., Consultant, Grant Thornton Bharat LLP - [2022] 135 taxmann.com 148 (Article)
Budget 2022–Taxing VDA’s – Will GST follow suit? - P.S. Krishnan, Partner, Grant Thornton Bharat LLP, Prashanth C., Manager, Grant Thornton Bharat LLP - [2022] 135 taxmann.com 151 (Article)
Budget Proposal about SEZs and vision on economic growth - P.S. Krishnan, Partner, Grant Thornton Bharat LLP, Mallikarjun N., Director, Grant Thornton Bharat LLP, Mallikarjun Sivapurapu, Manager, Grant Thornton Bharat LLP - [2022] 135 taxmann.com 152 (Article)
That’s it from us for today! Stay Tuned for more updates from?Taxmann.com
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