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
SECTION 9 OF THE INCOME-TAX ACT, 1961 - INCOME - DEEMED TO ACCRUE OR ARISE IN INDIA
Dividend: Where assessee, an FII based in Mauritius, had earned dividend income in respect of shares represented by Indian Depository Receipts (IDR) issued by SCB-UK and the dividend had been received by an overseas custodian bank in the UK and ultimately remitted to the assessee, since dividends had been paid by SCB-UK itself and none of these payments could be treated as paid by an Indian resident, dividend income in question could not be brought to tax in India under article 10 of India Mauritius treaty - Barclays Capital Mauritius Ltd. v. Assistant Commissioner of Income-tax, (IT) - [2023] 146 taxmann.com 134 (Mumbai - Trib.)
Royalties/fees for technical services - Subscription fee: Subscription fee received by the assessee, a corporation based in the USA, from providing access to its online chemistry databases and online journals to Indian customers would not qualify as 'royalty' in terms of section 9(1)(vi) and article12(3) of India-USA DTAA - American Chemical Society v. Deputy Commissioner of Income-tax (International Taxation) - [2023] 146 taxmann.com 133 (Mumbai - Trib.)
SECTION 36(1)(va) OF THE INCOME-TAX ACT, 1961 - EMPLOYEE'S CONTRIBUTIONS
PF/ESI: Deduction under section 36(1)(va) in respect of delayed deposit of amount collected towards employees' contribution to PF cannot be claimed when deposited within the due date of filing of return even when read with section 43B - Premier Irrigation Adritec (P.) Ltd. v. Assistant Commissioner of Income-tax, Circle-11(1) - [2023] 146 taxmann.com 389 (Kolkata - Trib.)
PF/ESI: Any failure to pay the employee's contribution to PF/ESI, within the prescribed due date under the respective Act or scheme will result in negating the employer's claim for deduction permanently forever under section 36(1)(va) - Suresh Electricals v. Deputy Commissioner of Income-tax - [2023] 146 taxmann.com 102 (Bangalore - Trib.)
SECTION 92C OF THE INCOME-TAX ACT, 1961 - TRANSFER PRICING - COMPUTATION OF ARM'S LENGTH PRICE
Adjustments - Interest: Where the Assessing Officer had made adjustments in hands of the assessee-company on account of interest on outstanding receivables since the assessee-company was a debt-free company and no interest was paid to creditor/supplier nor any interest had been earned from an unrelated party, the question of receiving any interest on receivables did not arise - Principal Commissioner of Income-tax v. Boeing India (P.) Ltd. - [2023] 146 taxmann.com 131 (Delhi)
SECTION 147 OF THE INCOME-TAX ACT, 1961 - INCOME ESCAPING ASSESSMENT - GENERAL
Condition precedent: SLP dismissed against High Court's ruling that where revenue had miserably failed to point out any facts or material which had not been disclosed by the assessee during the original assessment and the entire basis for re-opening after the expiry of four years from the end of the relevant assessment year was due to mistake of Assessing Officer that resulted in under assessment, reopening of assessment being on change of opinion, was impermissible in law - Assistant Commissioner of Income-tax v. CEAT Ltd. - [2023] 146 taxmann.com 108 (SC)
SECTION 195 OF THE INCOME-TAX ACT, 1961 - DEDUCTION OF TAX AT SOURCE - PAYMENT TO NON-RESIDENT
Salary payment: Section 195 has no application once the nature of payment is determined as salary and deduction of tax at source has been made under section 192 - Principal Commissioner of Income-tax v. Boeing India (P.) Ltd. - [2023] 146 taxmann.com 131 (Delhi)
GOODS AND SERVICES TAX LAWS
CLASSIFICATION OF GOODS
Test kit - C-Reactive Protein Test Kit and Hb1Ac: C-Reactive Protein Test Kit and HB1Ac Test kit fall under S. No. 125 of List 1 to Schedule I of Notification No. 01/2017-Central Tax (Rate) having description agglutinating sera attracting GST at the rate of 5 percent - Accurex Biomedical (P.) Ltd., In re - [2023] 146 taxmann.com 383 (AAAR-MAHARASHTRA)
SECTION 74 OF THE CENTRAL GOODS AND SERVICES TAX ACT, 2017 - DEMANDS AND RECOVERY– TAX OR INPUT TAX CREDIT INVOLVING FRAUD OR MISSTATEMENT OR SUPPRESSION
Assessment order passed without providing an opportunity of a personal hearing to the assessee was not sustainable and the authority was to be directed to pass a fresh order after affording an opportunity of a personal hearing to the assessee - Paras Industrial Sales v. State of U.P. - [2023] 146 taxmann.com 384 (Allahabad)
SECTION 130 OF THE CENTRAL GOODS AND SERVICES TAX ACT, 2017 - CONFISCATION OF GOODS OR CONVEYANCES AND LEVY OF PENALTY
Since it was premature for the high court to opine anything on whether there was any evasion of tax or not as the same was to be considered in an appropriate proceeding for which notice was issued by an appropriate authority, the high Court had materially erred in an entertaining writ petition against show cause notice and quashing and setting aside same, therefore, the impugned judgement passed by the high court was quashed and was to be set aside - State of Punjab v. Shiv Enterprises - [2023] 146 taxmann.com 385 (SC)
SECTION 171 OF THE CENTRAL GOODS AND SERVICES TAX ACT, 2017 - ANTI - PROFITEERING MEASURE
Petitioner can file a fresh petition before IT Grievance Redressal Committee for transfer of credit to its newly registered unit where Form GST ITC-02A was not allowed to be filed within 30 days from the date of registration of unit by common portal - Ramaraju Surgical Cotton Mills Ltd. v. Additional Commissioner of CGST and Central Excise - [2023] 146 taxmann.com 387 (Madras)
COMPANY AND SEBI LAWS
NOTIFICATION NO. G.S.R. 40(E), DATED 20-01-2023
MCA revises e-form AOC-5; seeks more disclosures relating to the address at which books of accounts are maintained
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Editorial Note: The MCA has notified the Companies (Accounts) Amendment Rules, 2023. As per the revised norms, E- form AOC-5 (Notice of address at which books of account are to be Maintained) has been revised. Now, it is mandatory to attach proof of address, copies of the utility bill, and a photograph of the registered office showing at least one director with form AOC-5. Earlier, the only board resolution was required to attach. The changes will be effective 23-01-2023.
MCA mandates NOC from charge holders for registration of Co. u/s 366
Editorial Note: The MCA has notified Companies (Authorised to Register) Amendment Rules, 2023. As per the amended norms a company desirous of registration u/s 366 is required to obtain a No Objection Certificate (NOC) from secured creditor along -with the charge holder, if any. Earlier, only the written consent or No Objection Certificate from all the secured creditors of the applicant was required. The change w.e.f 23rd Jan, 2023
Govt. mandates influencers/celebrities to make prominent disclosures for endorsements to curb misleading ads
Editorial Note: The Govt. has released the Endorsements Know-hows!’ for celebrities, influencers and virtual influencers on social media platforms. As per this scheme, the influencers are required to make certain disclosures. It includes not only benefits and incentives, but also monetary or other compensation, trips/hotel stays, media barters, free product discounts, gifts, and any personal/professional relationship etc.
COMPETITION LAW
SECTION 53T OF THE COMPETITION ACT, 2002 - APPEAL TO SUPREME COURT
SC affirms NCLAT order directing Google LLC to pre-deposit 10% of the penalty imposed by CCI and declining stay of CCI's order - Google LLC v. Competition Commission of India - [2023] 146 taxmann.com 380 (SC)
FEMA BANKING AND INSURANCE LAWS
SECTION 17 OF THE FOREIGN CONTRIBUTION (REGULATION) ACT, 2010 - FOREIGN CONTRIBUTION THROUGH SCHEDULED BANK
Belated opening of FCRA A/c with SBI and belated filing of FC-4 was to be condoned where petitioner-NGO received no foreign funds till the opening of A/c - WNS Cares Foundation v. Union of India - [2023] 146 taxmann.com 386 (Delhi)
INSOLVENCY AND BANKRUPTCY CODE
SECTION 12A OF THE INSOLVENCY AND BANKRUPTCY CODE, 2016 - CORPORATE INSOLVENCY RESOLUTION PROCESS - WITHDRAWAL OF APPLICATION
Where the corporate debtor had deposited the default amount and the respondent-operational creditor was permitted to withdraw said amount, an operational creditor was permitted to withdraw the section 9 application, which would stand withdrawn - Sanchit Saraf v. Kamakshi Kraftex (P.) Ltd. - [2023] 146 taxmann.com 104 (NCLAT- New Delhi)
ACCOUNTS AND AUDIT
Illustrative Checklist on Disclosure requirements under AS 11, The Effects of Changes in Foreign Exchange Rates
Editorial Note: AS 11 prescribes accounting for foreign currency transactions and foreign operations. In order to include foreign currency transactions and operations in financial statements, they must be expressed in the entity’s reporting currency and financial statements of foreign operations must be translated into the entity’s reporting currency. AS 11 guides on which exchange rate to use and how to recognise in the financial statements the financial effect of changes in exchange rates.
OPINIONS
Indian tax system in contract with the Dutch tax system - Rishabh Agarwal, CA - [2023] 146 taxmann.com 362 (Article)
Is it possible to claim the cost of land acquired prior to the sale of a capital asset for exemption under sections 54 / 54F? - V K Subramani, FCA - [2023] 146 taxmann.com 361 (Article)
Consequences of delayed filing of special resolutions without obtaining the approval for condonation of delay – a case study - Prof R Balakrishnan, FCS - FCWA - [2023] 146 taxmann.com 388 (Article)
That’s it from us for today! Stay Tuned for more updates from?Taxmann.com
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