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 4 OF THE INCOME-TAX ACT, 1961 - INCOME - CHARGEABLE AS
Revision: Where the case of the assessee was selected for limited scrutiny assessment on the sole issue of business expenses, the Principal Commissioner could examine only that issue by invoking revision under section 263 which was before the Assessing Officer during the course of scrutiny assessment and not other issues regarding contractual income and professional charges received by assessee which had not been the subject matter of assessment in a limited scrutiny assessment - Mind Sports League (P.) Ltd. v. Principal Commissioner of Income-tax - [2023] 157 taxmann.com 815 (Kolkata - Trib.)
SECTION 9 OF THE INCOME-TAX ACT, 1961 - INCOME - DEEMED TO ACCRUE OR ARISE IN INDIA
Interest- Others: Where during the year assessee had made remittance to a foreign company of amounts invested in earlier years and hence, no taxability arose during the year, notice issued under section 148 treating said remittance as unexplained investment, was to be declared as void ab initio - BCP V Singapore FVCI (P.) Ltd. v. Assistant Commissioner of Income-tax, Circle 1(1)(2) - [2024] 159 taxmann.com 63 (Delhi - Trib.)
SECTION 10(37) OF THE INCOME-TAX ACT, 1961 - CAPITAL GAINS - CAPITAL GAIN ON COMPULSORY ACQUISITION OF URBAN AGRICULTURAL LAND
Interest: Where the Assessing Officer accepted the view of the assessee that interest received by it under section 28 on enhanced compensation on compulsory acquisition of land was a part of the enhanced value of land and same was exempt under section 10(37), since the issue was debatable, Principal Commissioner was not justified in setting aside assessment order under section 263 - Pawan Kumar v. Principal Commissioner of Income-tax - [2024] 159 taxmann.com 61 (Delhi - Trib.)
SECTION 10A OF THE INCOME-TAX ACT, 1961 - FREE TRADE ZONE
Reassessment: Where AO reopened assessment on the ground that in scrutiny assessment for a subsequent AY, it was found that the assessee had incurred substantial expenditure in foreign currency on employees posted abroad and, thus, said expenditure had not resulted into earning of any income from the eligible business of export of software, accordingly, the assessee was not eligible for deduction under section 10A to extent of a certain amount, since there was no failure on part of the assessee to disclose truly and fully material facts required for assessment and reopening was done merely on basis of a different view taken by AO in assessment for a subsequent AY, impugned reopening after 4 years was unjustified - Larsen & Toubro Infotech Ltd. v. Deputy Commissioner of Income-tax - [2023] 157 taxmann.com 812 (Mumbai - Trib.)
SECTION 28(i) OF THE INCOME-TAX ACT, 1961 - BUSINESS LOSS/DEDUCTIONS - ALLOWABLE AS
Revision: Where AO after calling for details and evidence from assessee had taken a plausible view by accepting the explanation of the assessee that loss debited to profit and loss account was not related to penny stock but was normal business loss related to real estate business of the assessee which was eligible for being carried forward and set off against profits of subsequent years, impugned revision under section 263 was unjustified - Konsortia Construction Company (P.) Ltd. v. Deputy Commissioner of Income-tax - [2023] 157 taxmann.com 811 (Kolkata - Trib.)
SECTION 37(1) OF THE INCOME-TAX ACT, 1961 - BUSINESS EXPENDITURE - ALLOWABILITY OF
Reassessment: Where AO issued a reopening notice on grounds that assessee had debited certain expenditures such as such as delayed remittance of employees contribution to EPF on one occasion, consultancy for the project, registrar and share transfer agent fees, etc. which were not allowable as per different provisions under Income Tax Act, since there was not even allegation in reasons recorded for reopening that there was any failure on part of the assessee to fully and truly disclose all material facts necessary for assessment, impugned reopening notice issued after four years was to be quashed - Everest Kanto Cylinder Ltd. v. Union of India - [2024] 159 taxmann.com 51 (Bombay)
SECTION 68 OF THE INCOME-TAX ACT, 1961 - CASH CREDIT
Bank deposits: Where AO made an addition under section 68 on account of difference between cash sales of the assessee and cash deposits in its bank account which was much higher, since though assessee had failed to submit any corroborative evidence to substantiate its explanation that cash deposits were on account of cash received from debtors before lower authorities, however, before instant Tribunal in course of hearing, it had submitted certain additional evidence and also requested to submit further additional evidence to establish genuineness of transactions, matter was to be remanded back to Assessing Officer for fresh consideration - Assistant Commissioner of Income-tax v. Manav Motors - [2023] 157 taxmann.com 814 (Raipur - Trib.)
Limitation period: Where search operation was conducted upon assessee on 15-9-2017, invocation of assessment proceedings under section 153A for assessment year 2008-09 by notice dated 7-12-2019 was beyond the period of limitation prescribed by statute, therefore, the impugned assessment order passed by the Assessing Officer in respect of the assessment year 2008-09 making addition under section 68 on account of share capital received by assesssee treating it as bogus was to be quashed - Deputy Commissioner of Income-tax v. Sai Kanaka Mahalakshmi Finance (P.) Ltd. - [2023] 157 taxmann.com 816 (Visakhapatnam - Trib.)
SECTION 92C OF THE INCOME-TAX ACT, 1961 - TRANSFER PRICING - COMPUTATION OF ARM’S LENGTH PRICE
Draft assessment order: Notice issued in SLP against order of High Court that where at stage of passing draft order, ACIT had assessed tax, passed a final order and also issued a demand notice, the procedure followed by ACIT was contrary to law and said the mistake could not be cured under section 292B - Commissioner of Income-Tax v. Cisco Systems Services BV, India Branch - [2024] 159 taxmann.com 67 (SC)
SECTION 115BAA OF THE INCOME-TAX ACT, 1961 - DOMESTIC COMPANIES - TAX ON
Filling of Form 10-IC: Where assessee was denied claim of reduced tax rate under section 115BAA due to non-submission of Form 10-IC, since delay in filing said Form had been condoned by Pr. Commissioner subsequently, assessee deserved benefit of reduced rate of taxation - KHR Hospitality India Ltd. v. Commissioner of Income-tax (Appeals) - [2023] 157 taxmann.com 810 (Kolkata - Trib.)
SECTION 271E OF THE INCOME-TAX ACT, 1961 - PENALTY - FOR FAILURE TO COMPLY WITH SECTION 269T
Pendency of assessment: Penalty proceedings under section 271E can be initiated while the Assessing Officer is in seisen of assessment proceedings of the relevant assessment year in which default had occurred and not afterwards - Pawan Kumar v. Joint Commissioner of Income-tax - [2023] 157 taxmann.com 813 (Delhi - Trib.)
GOODS AND SERVICES TAX LAWS
CLASSIFICATION OF GOODS
Animal feeds Bio pro-enhac: Where assessee claimed exemption on sale of a product named "Bio pro-enhac" under HSN 2309, and impugned order was passed stating that Bio pro-enchac is classified under HSN 2936 and taxable at rate of 18%, since fact that supplements and additives of shrimp feed will fall under category of shrimp feed was not analysed, impugned order was set aside to such extent and matter was remitted back - B.M.R. Industries (P.) Ltd. v. Assistant Commissioner (ST) - [2024] 159 taxmann.com 73 (Andhra Pradesh)
Animal feeds: Where assessee claimed exemption on sale of product named "Minwa and Minwa Plus" under HSN 2309, and the impugned order was passed stating that Minwa and Minwa plus is classified under HSN 2931 and taxable at rate of 18%, since products' main purpose is not to act either as a shrimp food or a food supplement or additive, but its main purpose is to maintain PH level in shrimp pond, it was held that said product does not fall within ambit of HSN code 2309 - B.M.R. Industries (P.) Ltd. v. Assistant Commissioner (ST) - [2024] 159 taxmann.com 73 (Andhra Pradesh)
SECTION 7 OF THE CENTRAL GOODS AND SERVICES TAX ACT, 2017 - SUPPLY - SCOPE OF
Since it is clear from circular No. 196/08/2023-GST that mere holding of shares by holding company in a subsidiary company cannot be treated as supply of service, order issued by revenue against assessee, a subsidiary of M/s. Yonex, Japan which proceeds on basis that said holding of shares amounts to "supply of service" was clearly illegal, arbitrary and without jurisdiction and thus same was to be quashed - Yonex India (P.) Ltd. v. Union of India - [2024] 159 taxmann.com 71 (Karnataka)
SECTION 17 OF THE CENTRAL GOODS AND SERVICES TAX ACT, 2017 - INPUT TAX CREDIT - CREDIT AND BLOCKED CREDITS, APPORTIONMENT OF
Where competent Authority had blocked input tax credit of assessee, and just within nine days of making representation before authority concerned, assessee rushed to High Court, writ petition of the assessee was to be disposed of by directing Authority to consider the representation of assessee and pass a reasoned order - Mujibar Mollah v. Deputy Commissioner of State Tax (GST) - [2024] 159 taxmann.com 40 (Calcutta)
SECTION 29 OF THE CENTRAL GOODS AND SERVICES TAX ACT, 2017 - REGISTRATION - CANCELLATION OF
Where Competent Authority had cancelled registration of assessee on ground that assessee had not filed returns for a continuous period of six months, since assessee did not have any case that it had in fact filed a return in a continuous period of six months, writ petition filed by assessee agaisnt cancellation order was to be dismissed - Gopal Enterprises v. Union of India - [2024] 158 taxmann.com 706 (Patna)
Where Competent Authority had cancelled GST registration of assessee on ground that assessee firm was non-existent at subject address since reply filed by assessee was not commensurate with reasons mentioned in SCN, an opportunity was to be granted to assessee to file a detailed response to SCN and authority was to re-adjudicate same - Maa Jhandewali Traders v. Principal Commissioner of GST, North Delhi - [2024] 158 taxmann.com 707 (Delhi)
SECTION 50 OF THE CENTRAL GOODS AND SERVICES TAX ACT, 2017 - PAYMENT OF TAX - INTEREST ON DELAYED PAYMENT
Where assessee was issued a notice pursuant to original notice indicating grounds and calculation, on which demand was raised under section 50 of CGST Act, however during the pendency of the petition, amendments were made to Section 50 through Finance Act, 2019 and Finance Act, 2021, therefore in view of said amendments and facts of case writ petition was to be disposed of directing assessee to approach revenue indicating the payable amount and seeking re-determination of demand - Swift Motors v. Superintendent Central Goods & Service tax - [2024] 159 taxmann.com 70 (Rajasthan)
SECTION 54 OF THE CENTRAL GOODS AND SERVICES TAX ACT, 2017 - REFUND - TAX, REFUND OF
Assessee would be liable for refund of amount paid as tax, interest and penalty which was paid on assurance that the department would release seized currency; therefore, assessee was allowed to file an application for refund of aforesaid amount - Goyal Metal Udyog v. Commissioner of Central Goods & Services Tax - [2024] 159 taxmann.com 36 (Delhi)
领英推荐
SECTION 67 OF THE CENTRAL GOODS AND SERVICES TAX ACT, 2017 - SEARCH, SEIZURE ETC. - POWER OF INSPECTION,SEARCH AND SEIZURE
During search, the department does not possess authority to seize currency; hence, currency seized by the department during search was required to be released to assessee - Goyal Metal Udyog v. Commissioner of Central Goods & Services Tax - [2024] 159 taxmann.com 36 (Delhi)
SECTION 73 OF THE CENTRAL GOODS AND SERVICES TAX ACT, 2017 - DEMANDS AND RECOVERY - TAX OR INPUT TAX CREDIT DUE NOT INVOLVING FRAUD MISSTATEMENT OR SUPPRESSION
Where assessee admitted short payment of tax by inadvertence, however Adjudicating Authority and Appellate Authority did not consider GSTR-9C submitted by the assessee, Adjudicating Authority was to be directed to revisit issue after taking into consideration GSTR-9C submitted by assessee - Sanjeevani Gum Udyog v. State of West Bengal - [2024] 158 taxmann.com 710 (Calcutta)
SECTION 107 OF THE CENTRAL GOODS AND SERVICES TAX ACT, 2017 - APPELLATE AUTHORITY - APPEALS TO
Since assessee had availed alternate remedy of filing an appeal and had made, inastant writ petition became infructuous regarding said aspect and was to be diposed of - Dada Motors (P.) Ltd. v. Union Territory of Chandigarh - [2024] 159 taxmann.com 68 (Punjab & Haryana)
SECTION 129 OF THE CENTRAL GOODS AND SERVICES TAX ACT, 2017 - DETENTION, SEIZURE AND RELEASE OF GOODS AND CONVEYANCES IN TRANSIT
Where assessee challenged the assessment order, appellate order, and demand notices for penalty under Section 129(1)of CSGT Act, High Court granted interim order directing Revenue not to invoke assessee's bank guarantee till disposal of petition, subject to depositing further 10% of assessed penalty - AMA (P.) Ltd. v. State of Kerala - [2024] 159 taxmann.com 75 (Kerala)
COMPANY AND SEBI LAWS
NOTIFICATION NO. S.O. 446(E) DATED 02-02-2024
MCA adopts a centralized approach for processing all e-forms filed by Cos. starting from Feb 06, 2024
Editorial Note: MCA has notified that w.e.f 06th Feb, 2024 the Central Processing Centre (CPC) shall process and dispose off e-forms filed by the Companies. This is aimed at freeing up capacity at the offices of Regional Directors and Registrar of Companies to deal with enforcement matters. Further, it has been clarified that the jurisdictional Registrars shall continue to have jurisdiction over the companies whose e-forms are processed by the CPC in respect of all other provisions of the Companies Act, 2013.
SEBI floats addendum to a consultation paper on streamlining ICDR and LODR norms for ease of doing business
Editorial Note: Earlier, the SEBI on 11th Jan, 2024 issued a consultation paper on Interim Recommendations of the Expert Committee for facilitating ease of doing business and harmonization of the provisions of the ICDR and LODR Regulations. Now, the committee has proposed that the requirement to deposit an amount equal to 1 % of the issue size available for subscription to the public with designated stock by the issuer is to be done away with. The stakeholders can submit their comments latest by 09th Feb, 2024.
SEBI proposes to allow Category I and II AIFs to encumber equity for infrastructure investee Cos. to ease debt-raising
Editorial Note: SEBI proposes to allow Category I and II AIFs to create an encumbrance on equity of an investee company only for borrowing by the said investee company where the investee company is in the business of development, operation or management of projects in any of the infrastructure sub-sectors listed in the Harmonised Master List of Infrastructure issued by the Govt., from time to time. AIFs however, will not be allowed to create encumbrance on equity of foreign investee Cos.
SEBI proposes guardrails and additional measures to revamp nomination facilities in securities market
Editorial Note: To provide convenience to investors, and establish uniformity in the nomination facilities and procedures, SEBI has issued a consultation paper to revise & revamp nomination facilities in the Indian securities market. Proposals include secure and verifiable methods, such as digital signatures or Aadhar, for making, changing, or cancelling nominations. Acknowledgement of these actions will be provided to investors. Stakeholders may submit their comments by Mar 08, 2024.
FEMA BANKING AND INSURANCE LAWS
SECTION 17 OF THE SECURITISATION AND RECONSTRUCTION OF FINANCIAL ASSETS AND ENFORCEMENT OF SECURITY INTEREST ACT, 2002 - APPLICATION AGAINST MEASURES TO RECOVER SECURED DEBTS
Where respondent-borrower approached DRT during pendency of writ petition before High Court seeking refund of the amount since, borrower had already availed statutory remedies under the SARFAESI Act, 2002, High Court ought not to have entertained prayer of borrower for refund of any amount - State Bank of India v. Varun Roshan Kohli - [2024] 159 taxmann.com 59 (Calcutta)
ACCOUNTS AND AUDIT
Customer Identification under Ind AS 115 when operating as principal or agent under a contract
Editorial Note: An entity shall apply Ind AS 115 to a contract only if the counterparty is a customer. A customer is a party contracted with an entity to obtain goods or services that are an output of the entity's ordinary activities. An entity shall determine whether the nature of its promise is a performance obligation to provide the specified goods or services itself (i.e. the entity is a principal) or to arrange for those goods or services to be provided by the other party (i.e. the entity is an agent).
OPINIONS
Budget 2024: Laying down a roadmap for ‘Viksit Bharat’ - Ankita Chowdhry, Chartered Accountant, Medha Sharma, Chartered Accountant - [2024] 159 taxmann.com 82 (Article)
New ITR Forms - Changes introduced in ITR-2, 3 and 5 for Assessment Year 2024-25 - Taxmann Advisory and Research Team (Income Tax) - [2024] 159 taxmann.com 87 (Article)
An Overview of Direct Tax Proposals in The Finance Bill, 2024 - M. K. Pithisaria, Advocate, CA Abhishek Pithisaria, Partner at SHAP & Co. LLP - [2024] 159 taxmann.com 86 (Article)
Deciphering the chronology of ISD Mechanism: Insights into Budget 2024 Amendments - Gaurav Jha, CA - [2024] 159 taxmann.com 85 (Article)
Practical issues in demat of securities of not small companies - Gaurav Pingle, Company Secretary - [2024] 159 taxmann.com 81 (Article)
Corporate Exit made easy: IBBI takes progressive steps towards transparent voluntary liquidations - Tamanna Gaba - CS & LL.B, Taxmann Advisory and Research Team (Corporate Laws) - [2024] 159 taxmann.com 84 (Article)
Deciding the Fate: A Legal Analysis of the Adjudicating Authority's Role in CIRP Initiation - Siddhant Asthana, Advocate, Student of Post Graduate Insolvency Programme, Indian Instituteof Corporate Affairs - [2024] 159 taxmann.com 47 (Article)
That’s it from us for today! Stay Tuned for more updates from Taxmann.com
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