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
PRESS RELEASE, DATED 09-02-2024
Income Tax Dept. conducts search operations in Chhattisgarh on Politically Exposed Person
Editorial Note: The Income-tax Department initiated search and seizure operations in the case of a Politically Exposed Person (PEP), his close associates and few Government officials on 31/01/2024. The search operation has resulted in seizure of unaccounted cash and jewellery exceeding Rs. 2.50 crore.
SECTION 37(1) OF THE INCOME-TAX ACT, 1961 - BUSINESS EXPENDITURE - ALLOWABILITY OF
Advertisement expenses: Where assessee, engaged in business of import and trading in foreign made foreign liquors in India, incurred expenditure towards advertisement and sales promotion on direction of a company and such expenditure had also benefited said company, since there was a direct nexus between expenditure incurred and business of assessee, assessee would still be entitled to claim deduction of said expenditure under section 37(1) - Sun Tan Trading Co. Ltd. v. Deputy Commissioner of Income-tax, Circle 1(3)(1) - [2024] 159 taxmann.com 217 (Bombay)
SECTION 68 OF THE INCOME-TAX ACT, 1961 - CASH CREDIT
Cash receipts: Where assessee had received Rs. 30 lakhs in cheque from AR recorded in 'Ikraranama' and Rs. 60 lakhs in cheque from MBPPL recorded in Sale Deed and Rs. 25 lakhs in cash recorded in 'Ikrarnama' as handwritten jotting of cash received and AO had treated cash receipts as unexplained cash credit for reason that same exceeded amount recorded in 'Ikrarnama' and, thus, same not part of sale consideration of property and also assessee failed to discharge its onus under section 68, however, assessee contended that advance of Rs. 30 lakh received from AR had been returned back to him subsequently with interest, in view of fact that assessee being no more and represented by legal heir matter was to be remanded to AO to verify whether said amount was returned to AR and if same was returned then cash amount received by assessee would be within limits of Rs. 90 lakhs as sale consideration as per 'Ikrarnama' and in that case, same should not be treated as unexplained cash credit rather should be treated as part of sale consideration of property but if assessee failed in demonstrating evidences, addition should be sustained - Shrinath Tandon v. Income Tax Officer, Ward-2(5) - [2024] 159 taxmann.com 212 (Jabalpur - Trib.)
SECTION 80G OF THE INCOME-TAX ACT, 1961 - DEDUCTIONS - DONATION TO CERTAIN FUNDS, CHARITABLE INSTITUTIONS
SLP dismissed against order of High Court that where Commissioner had not recorded any reason for assessee-trust's failure to meet conditions outlined in clauses (i) to (v) of section 80G(5), and no objection was raised regarding genuineness of activities of trust, denial of approval under section 80G solely due to lack of significant charitable activity as per its objects would be unjustifiable - Commissioner of Income-tax (Exemptions) v. Gangadeen Niranjan Lal Data Charitable Trust - [2024] 159 taxmann.com 208 (SC)
SECTION 92C OF THE INCOME-TAX ACT, 1961 - TRANSFER PRICING - COMPUTATION OF ARM’S LENGTH PRICE
Comparables: Where Assessing Officer computed arithmetic mean of comparables selected by TPO for determining ALP of international transactions of assessee and made addition to assessee's income, since no inquiry had been carried out by Commissioner (Appeals) and he had simply issued directions to Assessing Officer for computing arithmetic mean of comparables with margin of tested parties, matter was to be remanded back for deciding afresh - Assistant Commissioner of Income-tax-1(1)(1) v. AJE India (P.) Ltd. - [2024] 159 taxmann.com 215 (Mumbai - Trib.)
SECTION 92CA OF THE INCOME-TAX ACT, 1961 - TRANSFER PRICING - REFERENCE TO TPO
Revision: Where Assessing Officer had completed assessment giving a go bye to mandatory provisions of section 92CA and CBDT Instruction No. 3 of 2016, such an assessment order definitely fell within meaning of erroneous and prejudicial to interest of revenue as envisaged under section 263 - JP Morgan Chase Bank N.A v. Commissioner of Income-tax (IT) - [2024] 159 taxmann.com 209 (Mumbai - Trib.)
SECTION 276C OF THE INCOME-TAX ACT, 1961 - OFFENCE AND PROSECUTION - WILFUL ATTEMPT TO EVADE TAX, ETC.
Wilful attempt to evade payment of tax : Where assessee had deposited tax due as declared in return along with interest within five days of service of show cause notice and it was neither a case of under reporting of income nor that of showing diminished tax liability, prosecution for alleged offence punishable under section 276C(2) was to be quashed - Unique Trading Co. v. Income Tax Officer-18(3)(5) - [2024] 159 taxmann.com 216 (Bombay)
GOODS AND SERVICES TAX LAWS
SECTION 7 OF THE CENTRAL GOODS AND SERVICES TAX ACT, 2017 - SUPPLY - SCOPE OF
Supply of food by employer, i.e., assessee to their employees is a composite supply of food held as 'supply of service' as per schedule-II of GST Act and amount collected by applicant is consideration on which GST is liable to be paid as providing canteen facility is an activity in furtherance of business which is mandated under Factories Act when number of employees exceeds 250 - Sundaram Clayton Ltd., In re - [2024] 159 taxmann.com 224 (AAR - TAMILNADU)
SECTION 9 OF THE CENTRAL GOODS AND SERVICES TAX ACT, 2017 - LEVY & COLLECTION OF TAX
Where assessee had sought relief for neutralizing impact of unforeseen additional tax burdens on government contracts since introduction of GST in July 2017 for ongoing contracts awarded before that date, instant writ petition was to be disposed of by giving liberty to assessee to file appropriate representations in aforesaid regard before concerned authority - Sonex Engineers Co-operative Society Ltd. v. State of West Bengal - [2024] 159 taxmann.com 220 (Calcutta)
SECTION 22 OF THE CENTRAL GOODS AND SERVICES TAX ACT, 2017 - REGISTRATION - PERSONS LIABLE FOR
Where petitioner's bid, for settlement of a market, was rejected by respondent-authority for not enclosing GST clearance certificate, tender document provided that GST clearance certificate to be annexed to bid documents, if necessary, petitioner's annual aggregate turnover in a financial year not above Rs. 20,00,000, reason for disqualifying petitioner's bid was not to be sustained - Nazimuddin Ahmed v. Principal Secretary - [2024] 159 taxmann.com 193 (Gauhati)
SECTION 29 OF THE CENTRAL GOODS AND SERVICES TAX ACT, 2017 - REGISTRATION - CANCELLATION OF
Where appeal filed against order of cancellation of GST was rejected on ground of limitation, since, relaxation in time limit to file appeal was given during Covid-19 pandemic, such limit should be considered in period of limitation and accordingly petition filed by assessee was allowed and department was directed to restore GST registration of assessee - Smt Ready Mix Concrete v. Additional Commissioner - [2024] 159 taxmann.com 223 (Madras)
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 in spite of request, no personal hearing was provided to assessee and order was issued and there was breach of principles of natural justice, therefore, impugned order was to be quashed and set aside and matter was remanded for reconsideration - JRK Diagnostic v. Deputy State Tax Officer-I - [2024] 159 taxmann.com 218 (Madras)
SECTION 129 OF THE CENTRAL GOODS AND SERVICES TAX ACT, 2017 - DETENTION, SEIZURE AND RELEASE OF GOODS AND CONVEYANCES IN TRANSIT
Detention order and imposing penalty at rate 200 % for a non-taxable movement of JCB machine that was returning from work was not in accordance with as law as assessee, owner of said machine, did not had intention to evade tax, therefore said order of detention was to be set aside - Mohammad Shamasher v. State of West Bengal - [2024] 159 taxmann.com 192 (Calcutta)
领英推荐
SECTION 168 OF THE CENTRAL GOODS AND SERVICES TAX ACT, 2017 - BOARD - INSTRUCTIONS OR DIRECTIONS, POWERS TO ISSUE
Where input tax credit claimed by petitioner in returns filed for period from July, 2017 to March, 2018 in GSTR-3B was disallowed on ground of mismatch between GSTR-3B and GSTR-2A to extent of mismatch, impugned orders was to be set aside and matter was to be remitted back to assessing authority to consider case of petitioner afresh in light of Para 4 of circular dated 27-12-2022 - Kochi Medicals v. State Tax Officer - [2024] 159 taxmann.com 225 (Kerala)
COMPANY AND SEBI LAWS
GENERAL CIRCULAR NO. 01/2024, DATED 07-02-2024
MCA extends the deadline for filing Form BEN-2 & Form 4D for LLPs without additional fees until May 15, 2024
Editorial Note: MCA vide. Notifications dated 09.11.2023 and 27.10.2023 had prescribed E-form LLP BEN-2 and E-form LLP Form no. 4D. In view of the transition of MCA-21 from V2 to V3 and to promote compliance on the part of reporting LLPs, the MCA has decided to allow LLPs to file Form LLP BEN-2 and LLP Form No. 4D, without payment of any additional fees, upto 15.05.2024. The two forms shall be made available in version 3 for filing purposes w.e.f 15.04.2024.
CIRCULAR NO. SEBI/HO/DDHS/DDHS-POD/P/CIR/2024/10, DATED 08-02-2024
Floor price for institutional placement for privately placed InvITs shall be NAV per unit of such InvIT: SEBI
Editorial Note: Earlier, in terms of SEBI Master Circular for InvITs dated July 06, 2023, Institutional placement of InvIT was required to be made at a price not less than the average of weekly high & low closing prices of units on stock exchange 2 weeks before relevant date. Now, the SEBI has decided that floor price for institutional placement for privately placed InvITs shall be NAV per unit of such InvIT. The price shall be based on the full valuation of all existing InvIT assets.
SECTION 11 OF THE SECURITIES AND EXCHANGE BOARD OF INDIA ACT, 1992 - FUNCTIONS OF BOARD
SEBI impounds Rs. 7.41Crores of wrongful gains from Zee Business Guest Experts giving stock recommendations and "Profit makers" - Nirmal Kumar Soni., In re - [2024] 159 taxmann.com 239 (SEBI)
FEMA BANKING AND INSURANCE LAWS
SECTION 45 OF THE PREVENTION OF MONEY LAUNDERING ACT, 2002 - OFFENCES TO BE COGNIZABLE AND NON-BAILABLE
Delhi HC denies bail to AAP MP Sanjay Singh in PMLA case saying "Court bound by law and cannot be influenced by position of petitioner" - Sanjay Singh v. Directorate of Enforcement - [2024] 159 taxmann.com 213 (Delhi)
SECTION 118 OF THE NEGOTIABLE INSTRUMENTS ACT, 1881 - PRESUMPTION AS TO NEGOTIABLE INSTRUMENTS
Where Trial Court convicted accused for offence punishable under section 138 and said order was passed after going through cheque, notice, preliminary evidence in form of an affidavit and other documents attached to complaint and Magistrate was satisfied that there existed sufficient ground to proceed against accused under Section 138 of N.I. Act, instant petition for quashing summoning order and complaint pending before Trial Court was to be dismissed - Sumit Juneja v. State of H.P. - [2024] 159 taxmann.com 214 (Himachal Pradesh)
ACCOUNTS AND AUDIT
Consequences of stock damage after the reporting date on NRV for valuation purposes
Editorial Note: The stock shall be valued at cost or Net Realizable Value (NRV) whichever is lower keeping a prudence approach for valuing the inventory. For calculating NRV, the consequences of stock damage after the reporting date on NRV bring complexity that should be dealt with carefully. When damage occurs to stock after reporting date, it has implications for the valuation process. This case study discusses challenges and consequences of stock damage after the reporting date on NRV for valuation purposes
OPINIONS
World Tax News: Chile collects more than USD 1,001 million VAT on digital services - Taxmann, Editorial Team - [2024] 159 taxmann.com 237 (Article)
Gender Diversity in the Boardroom - Mahak Agarwal, Executive, Vinod Kothari and Company - [2024] 159 taxmann.com 238 (Article)
Reverese CIRP: A Reform for The Future or A Challenge for The Present: An Overview - Kriti Vardhan Pandey, Advocate & Student of Post Graduate Insolvency Programme at Indian Institute of Corporate Affairs, Gurgaon, Akash Kumar, Advocate, Patna High Court - [2024] 159 taxmann.com 236 (Article)
That’s it from us for today! Stay Tuned for more updates from Taxmann.com
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