Daily Tax & Corporate Law Digest
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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 F. NO. 500/05/2018-FT&TR-III, DATED 06-04-2023
CBDT notifies jurisdictions of investment entities that won't be treated as passive non-financial entities for SFT reporting
Editorial Note:?Rule 114F defines the meaning of passive non-financial entity for the purpose of SFT reporting. As per said rule, a passive non-financial entity means an investment entity described in sub-clause (B) of clause (c) of the Explanation to Rule 114F(3), which is not located in any of the jurisdictions specified by the CBDT. The Board has notified such jurisdiction substituting jurisdictions that were previously notified vide Notification No. 78/2018 dated 5-11-2018.
SECTION 9 OF THE INCOME-TAX ACT, 1961 - INCOME - DEEMED TO ACCRUE OR ARISE IN INDIA
Permanent Establishment - Agency PE:?Where wholly owned subsidiary of the assessee, a German company, in India was engaged in the marketing of products of the assessee in India since the said entity was only undertaking marketing of contracts which were finalized by the assessee itself outside India, same could not be said to be habitually concluding order on behalf of the assessee and, thus, said entity could not be construed as dependent agent PE of the assessee in India?- Krones Aktiengesellschaft v. Deputy Commissioner of Income-tax, (International Taxation) - [2023] 148 taxmann.com 451 (Delhi - Trib.)
The sale of its global sports broadcasting business can't be taxed in India where assessee-co. Is tax resident of Mauritius and has no fixed place PE/DAPE in India?- Taj TV Ltd. v. Deputy Commissioner of Income-tax (IT)-4(1)(2) - [2023] 149 taxmann.com 112 (Mumbai - Trib.)
SECTION 37(1) OF THE INCOME-TAX ACT, 1961 - BUSINESS EXPENDITURE - ALLOWABILITY OF
Job work charges:?Where lower authorities disallowed job work charges paid by the assessee to job work contractors on the ground that notices issued under section 133(6) and thereafter summons served under section 131 to contractors had remained uncomplied with by contractors, since the assessee had filed formidable evidence to identify contractors as well as the factum of incurring job work expenses, said expenses deserved to be allowed?- United Foods (P.) Ltd. v. ACIT - [2023] 148 taxmann.com 452 (Delhi - Trib.)
SECTION 45 OF THE INCOME-TAX ACT, 1961 - CAPITAL GAIN - CHARGEABLE AS
Cost of asset:?Where detachable warrant had an existence on its own along with debenture purchased by the assessee, a part of the cost was attributable to the warrant and realisation thereof would be a sale consideration arising out of the transfer of capital asset and, as such, liable to capital gain?- Deepak Nitrite Ltd. v. Deputy Commissioner of Income-tax - [2023] 148 taxmann.com 450 (Gujarat)
SECTION 50 OF THE INCOME TAX ACT, 1961 - CAPITAL GAINS - COMPUTATION IN CASE OF DEPRECIABLE ASSETS
CIT rightly held AO's order as erroneous & prejudicial to revenue u/s 263 as it allowed payment by co. to shareholders under arbitral award as COI in computing capital gains?- Commissioner of Income-tax v. Paville Projects (P.) Ltd. - [2023] 149 taxmann.com 115 (SC)
SECTION 69A OF THE INCOME-TAX ACT, 1961 - UNEXPLAINED MONEYS
Purchase:?Where assessee-firm could not produce any evidence or material before lower authorities in regards to transactions of payments made by the assessee to different parties towards the purchase of unaccounted goods found in survey operation and merely stated that these transactions were not related to its business, impugned addition made in the hands of the assessee by treating amount so paid as undisclosed income was justified?- Samaddar Brothers v. Commissioner of Income-tax - [2023] 148 taxmann.com 453 (Calcutta)
SECTION 69B OF THE INCOME-TAX ACT, 1961 - UNDISCLOSED INVESTMENT
Stock:?Where during a survey conducted under section 133A at the business premises of the assessee-firm stock inventoried was found to be in excess of what was disclosed in books of account, and the assessee claimed that excess stock belonged to other firms since the assessee had failed to show any separate trade license, sale memo, purchase memo, books of account, etc. to explain excess physical stock so found, impugned addition made by estimating profit on the alleged difference of stock was justified?- Samaddar Brothers v. Commissioner of Income-tax - [2023] 148 taxmann.com 453 (Calcutta)
SECTION 69C OF THE INCOME-TAX ACT, 1961 - UNDISCLOSED EXPENDITURE
Purchases:?Where assessee-firm failed to discharge the burden cast upon it to explain alleged undisclosed purchases found during survey operation conducted upon it under section 133A, impugned addition made by Assessing Officer by estimating profit at the rate of 8.65 per cent on the amount of alleged purchases was to be sustained?- Samaddar Brothers v. Commissioner of Income-tax - [2023] 148 taxmann.com 453 (Calcutta)
SECTION 115JB OF THE INCOME TAX ACT, 1961 - MINIMUM ALTERNATE TAX - PAYMENT OF TAX
No transition amount adjustments u/s 115JB(2C) in case of Ind AS Co. if OFCDs were purely in the nature of equity with no embedded financial liability?- Reliance Industrial Investment and Holdings Ltd. v. Deputy Commissioner of Income-tax, Circle-3(3)(1) - [2023] 149 taxmann.com 113 (Mumbai - Trib.)
SECTION 153C OF THE INCOME TAX ACT, 1961 - ASSESSMENT OF INCOME OF ANY OTHER PERSON
Amendment to sec 153C by FA 2015 w.e.f. 1-6-2015 (w.r.t. incriminating material pertaining to the third party) shall apply to searches conducted before 1-6-2015?- Income Tax Officer v. Vikram Sujitkumar Bhatia - [2023] 149 taxmann.com 123 (SC)
GOODS AND SERVICES TAX LAWS
SECTION 2(30) OF THE CENTRAL GOODS AND SERVICES TAX ACT, 2017 - SUPPLY - COMPOSITE SUPPLY
Work being undertaken by the applicant as sub-contractor for conversion of short welded rails (SWR) to long welded rails (LWR) by flash butt welding process on railway tracks along with a supply of labour services are 'composite supply of services' falling under Heading No. 995429 and shall be taxable at the rate of 18 per cent vide Sl.No. 3(xii) of Notification No. 11/2017-Central Tax (Rate), dated 28-6-2017, as amended?- Purple Distributors (P.) Ltd., In re - [2023] 149 taxmann.com 116 (AAR-WEST BENGAL)
SECTION 2(68) OF THE CENTRAL GOODS AND SERVICES TAX ACT, 2017 - JOB WORK - DEFINITION OF
Conversion of short welded rails (SWR) to long welded rails (LWR) by flash butt welding process cannot be treated as 'job work'?- Purple Distributors (P.) Ltd., In re - [2023] 149 taxmann.com 116 (AAR-WEST BENGAL)
SECTION 2(119) OF THE CENTRAL GOODS AND SERVICES TAX ACT, 2017 - WORKS CONTRACT
Conversion of short welded rails (SWR) to long welded rails (LWR) by flash butt welding process can not be treated as a works contract?- Purple Distributors (P.) Ltd., In re - [2023] 149 taxmann.com 116 (AAR-WEST BENGAL)
SECTION 9 OF THE CENTRAL GOODS AND SERVICES TAX ACT, 2017 - LEVY & COLLECTION OF TAX
Sale of independent running staffing business division with all assets and liabilities, on a going concern basis, and consideration received in multiple stages, is the supply of financial service, covered under SAC 997119 liable to 18 per cent GST rate; the benefit of Sl. No. 2 of Notification No. 12/2017-Central Tax (Rate) is available subject to furnishing auditor's certificate that business is going concerned?- Pico2femto Semiconductor Services (P.) Ltd., In re - [2023] 149 taxmann.com 121 (AAR - KARNATAKA)
SECTION 29 OF THE CENTRAL GOODS AND SERVICES TAX ACT, 2017 - REGISTRATION - CANCELLATION OF
The date from which registration was required to be cancelled was mentioned wrongly in the application of cancellation of registration, and the consequent order cancelling registration from such date was allowed to be rectified?- Bansal Steels v. Commissioner, Central Goods & Service Tax - [2023] 149 taxmann.com 118 (Delhi)
SECTION 95 OF THE CENTRAL GOODS AND SERVICES TAX ACT, 2017 - ADVANCE RULING - DEFINITIONS
Question about the recipient's entitlement of input tax credit, and not related to the supply of applicant, is beyond the jurisdiction of Advance Ruling Authority?- Pico2femto Semiconductor Services (P.) Ltd., In re - [2023] 149 taxmann.com 121 (AAR - KARNATAKA)
SECTION 129 OF THE CENTRAL GOODS AND SERVICES TAX ACT, 2017 - DETENTION, SEIZURE AND RELEASE OF GOODS AND CONVEYANCES IN TRANSIT
Assessee was required to generate a fresh e-way bill when goods are transported in different vehicles due to the breakdown of the original vehicle; Authorities were not required to ascertain reasons for transporting goods in different vehicles?- Asian Switchgear (P.) Ltd. v. State Tax Officer - [2023] 149 taxmann.com 120 (Calcutta)
Valuation of goods must be established before appellate authority under GST enactments after deposition of 25 per cent of the amount determined by the State Tax Officer, and it could not be determined in writ proceedings based on submissions of the assessee?- T.V.H. Express v. State Tax Officer - [2023] 149 taxmann.com 117 (Madras)
High Court, in the exercise of its writ jurisdiction, cannot be concerned with disputed questions of fact, and it cannot interfere with the penalty imposed by State Tax Officer?- T.V.H. Express v. State Tax Officer - [2023] 149 taxmann.com 117 (Madras)
COMPANY AND SEBI LAWS
CIRCULAR NO. SEBI/HO/MIRSD/ MIRSD-POD-2/P/CIR/2023/52, DATED 06-04-2023
SEBI directs investment advisors and research analysts to display their information prominently in advertisements
Editorial Note:?SEBI has asked Investment Advisers (IAs) and Research Analysts (RAs) to prominently display information such as the name as registered with SEBI, its logo, its registration number etc. In addition, they are required to give the disclaimer that “registration granted by SEBI, membership of BASL (in case of IAs) and certification from NISM in no way guarantee performance of the intermediary or provide any assurance of returns to investors” in their advertisements.
领英推荐
FEMA BANKING AND INSURANCE LAWS
ADVISORY NO.DM/15/2022-DM, DATED 06-04-2023
Govt. cautions media platforms to refrain from displaying advertisements related to online betting
Editorial Note:?Earlier, the Ministry of Information & Broadcasting advised private television channels and digital news publishers, to refrain from showing advertisements or promotional content of betting sites. Despite this, the Ministry has been informed of recent instances where news publishers have violated the statutes. Now, the Ministry has taken strong exception to such practices and urged all media platforms to immediately refrain from showing such advertisements and promotional content.
CIRCULAR NO. RBI/2023-24/13 A.P. (DIR SERIES) CIRCULAR NO.01, DATED 06-04-2023
RBI launches online App for issuance and renewal of licenses for full-fledged money changers and non-bank AD category-II
Editorial Note:?The RBI has developed a software application, known as ‘APConnect’ for processing applications related to licencing of Full-Fledged Money Changers (FFMCs), non-bank Authorised Dealers (AD) Category-II, authorisation as Money Transfer Service Scheme (MTSS) Agent, renewal of existing licences/authorisations, for seeking approval and submission of various statements/returns. In this regard, RBI has directed them to register on the application within 3 months from the date of circular.
SECTION 5 OF THE PREVENTION OF MONEY LAUNDERING ACT, 2002 - ATTACHMENT OF PROPERTY INVOLVED IN MONEY LAUNDERING
Where some of the properties against which provisional attachment order had been passed by the respondent, were charged to the appellant, and it was a case of the appellant that being a secured creditor under the SARFAESI Act, had right over properties in priority over the respondent, Director of Enforcement in view of the fact that these issues required consideration but until then if property, which had been attached under provisions of PMLA was not disposed of, the property might get wasted or encroached upon, and value would also get eroded, subject properties were to be sold, and sale proceeds was to be deposited with Registrar?- Aditya Birla Finance Ltd. v. Directorate of Enforcement, Government of India - [2023] 148 taxmann.com 399 (Bombay)
SECTION 36 OF THE RECOVERY OF DEBTS AND BANKRUPTCY ACT, 1993 - POWER TO MAKE RULES
SC upholds mandatory e-filing of pleadings before DRTs/DRATs & directs phased replication of mandatory e-filing by other Tribunals/Courts?- M P High Court Bar Association v. Union of India - [2023] 149 taxmann.com 114 (SC)
INSOLVENCY AND BANKRUPTCY CODE
SECTION 65 OF THE INSOLVENCY AND BANKRUPTCY CODE, 2016 - CORPORATE PERSON'S ADJUDICATING AUTHORITIES - FRAUDULENT OR MALICIOUS PROCEEDINGS
Where financial creditor had accepted the due amount with 6 per cent interest per annum but was now demanding interest at the rate of 18 per cent, recovery proceedings of this nature did not fall within the scope and ambit of words 'for any purpose other than resolution' as defined under section 65 and, therefore, the impugned order of NCLT admitting CIRP application was to be set aside?- Anita Jindal v. Jindal Buildtech (P.) Ltd. - [2023] 148 taxmann.com 398 (NCLAT- New Delhi)
ACCOUNTS AND AUDIT
Classification and Valuation of ‘Advance to Foreign Supplier under Dispute’ when the matter pending litigation
Editorial Note:?Para 69 of Ind AS 1, Presentation of Financial Statements, classifies a liability as current when the entity does not have an unconditional right to defer settlement of the liability for at least twelve months after the reporting period. Due to this, the supplier of goods treated it as a current liability. Reconciling with the treatment of advance in the books of the supplier, the Indian buyer also classified it as a current asset. The story questions whether the buyer's classification is in accordance with Ind AS
OPINIONS
World Tax News: UAE provides relief to Start-ups and small businesses from upcoming Corporate Tax Law and more… -?Taxmann, Editorial Team - [2023] 149 taxmann.com 126 (Article)
Taxation of Crypto Currencies: Legislation and Challenges -?Sarabjeet Singh, Commissioner of Income-tax - [2023] 149 taxmann.com 122 (Article)
Income Tax Search and Seizure: Retrospective applicability of Section 153C “2015 amendment” as held by the Supreme Court -?Mohit Gupta, CA - [2023] 149 taxmann.com 124 (Article)
Analysis of Major FTP 2023 / HBP 2023 Amendments -?Sreeram Kaza, Indirect Tax Professional - [2023] 149 taxmann.com 125 (Article)
That’s it from us for today! Stay Tuned for more updates from?Taxmann.com.
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