Daily Tax | Corporate Laws | Accounting Digest
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INCOME TAX
SECTION 28(i) OF THE INCOME-TAX ACT, 1961 - BUSINESS LOSS/DEDUCTIONS - ALLOWABLE AS
Illustrations: Where shares were acquired by assessee-company as per Board resolution and were to be taken as stock-in-trade and shares were sold by assessee at lower price resulting in loss, said loss was a business loss and not a capital loss - Pr. Commissioner of Income-tax v. Jupiter Enterainment Ventures (P) Ltd. - [2024] 167 taxmann.com 83 (Karnataka)
SECTION 35D OF THE INCOME-TAX ACT, 1961 - PRELIMINARY EXPENSES
General: SLP disposed as infructuous against order of High Court that where assessee's claim under section 35D for amortization of preliminary expenses was granted by Assessing Officer for earlier assessment year 2007-08, such claim could not be disallowed in subsequent assessment year 2008-09 by Commissioner through his revisionary powers without disturbing decision in initial year - Commissioner of Income-tax III v. Subex Ltd. - [2024] 167 taxmann.com 94 (SC)
Initial public offer of shares expenses: Where assessee-company incurred certain expenditure in relation to initial public offer of shares such as advertising, travelling, postage, market research, etc. and claimed deduction of same as revenue expenditure, since section 35D permitted only certain capital expenses as deductible and not others and assessee had already been granted benefit of deduction of direct expenses incurred in connection with initial public officer of shares, it could not claim deduction of indirect expenses incurred in connection with same object as revenue expenses - Inditrade Capital Ltd. v. Commissioner of Income-tax - [2024] 167 taxmann.com 82 (Kerala)
SECTION 36(1)(va) OF THE INCOME-TAX ACT, 1961 - EMPLOYEE’S CONTRIBUTIONS
Due date: Payments made by assessee-company towards employees’ contribution to PF and ESI after due date prescribed under relevant Act was not allowable as deduction under section 36(1)(va) - Inditrade Capital Ltd. v. Commissioner of Income-tax - [2024] 167 taxmann.com 82 (Kerala)
SECTION 37(1) OF THE INCOME-TAX ACT, 1961 - BUSINESS EXPENDITURE - ALLOWABILITY OF
Compensation: Where assessee-firm, engaged in business of real estate and land development, claimed deduction for compensation paid on account of breach of contract wherein it was agreed to transfer part of interest in built-up area of properties, since agreement was entered into by managing partner of assessee in his individual capacity and assessee was not a signatory to agreement nor had any manner of right, title or interest in said properties, question of permitting assessee to claim deduction under section 37(1) would not arise - Pr. Commissioner of Income-tax Central v. Canara Housing Development Company - [2024] 167 taxmann.com 77 (Karnataka)
Professional and consultancy charges: Where assessee-company incurred certain expenditure in relation to professional and consultancy charges, since nature of services that were provided by consultant showed that expenses were incurred in connection with obtaining benefits that were of an enduring nature, expenditure was capital in nature and, thus, not eligible for deduction under section 37(1) - Inditrade Capital Ltd. v. Commissioner of Income-tax - [2024] 167 taxmann.com 82 (Kerala)
SECTION 68 OF THE INCOME-TAX ACT, 1961 - CASH CREDIT
Bogus purchases: Where assessee's reply to reopening notice was not considered at all and order under section 148A(d) was issued with approval of Principal Commissioner, since there was non-application of mind while giving approval under section 151, impugned order under section 148A(d) and notice issued under section 148 were to be quashed - Yogendra Singh v. Union of India - [2024] 167 taxmann.com 64 (Allahabad)
SECTION 132B OF THE INCOME-TAX ACT, 1961 - SEARCH AND SEIZURE - RETAINED ASSETS, APPLICATION OF
Interest on cash seized: SLP dismissed against High Court ruling that where officer concerned despite order of Tribunal date 24-9-2014 had not returned cash seized to assessee, assessee would be entitled to interest on cash seized at rate of 12 per cent on account of inordinate delay in releasing same from order of Tribunal until payment - Joint Commissioner of Income-tax v. Vinoda B. Jain - [2024] 167 taxmann.com 62 (SC)
SECTION 151 OF THE INCOME-TAX ACT, 1961 - INCOME ESCAPING ASSESSMENT - SANCTION FOR ISSUE OF NOTICE
Condition precedent: Where Assessing Officer recorded reasons believing that income had escaped assessment after expiry of four years and Commissioner recorded his satisfaction regarding reasons recorded by Assessing Officer since 151 requires Principal Commissioner to be satisfied of reasons recorded where notice was issued beyond expiry of 4 years, there was no requirement for Commissioner to record his own reasons and reopening notice was valid - Venky Steels (P.) Ltd. v. Commissioner of Income-tax-II - [2024] 167 taxmann.com 60 (Patna)
SECTION 194C OF THE INCOME-TAX ACT, 1961 - DEDUCTION OF TAX AT SOURCE - CONTRACTORS/ SUB-CONTRACTORS, PAYMENTS TO
Common Area Maintenance charges: Where assessee-company had taken a shop in a mall on rent and it had paid Common Area Maintenance (CAM) charges to payee, since CAM charges paid were for separate and distinguishable services and could not be said to be for use of building, CAM charges paid were not covered by section 194-I and only TDS provision that could be applied was section 194C - Benetton India (P.) Ltd. v. JCIT - [2024] 167 taxmann.com 76 (Delhi - Trib.)
GOODS AND SERVICES TAX LAWS
Parcel Management System (PMS) of Indian Railways is integrated with the E-Way Bill (EWB) system: GSTN Update
Editorial Note: The GSTN has issued an update to inform that Parcel Management System (PMS) of Indian Railways has now been integrated with the E-Way Bill (EWB) system via Application Programming Interfaces (APIs). This integration facilitates the seamless transfer of RR No./Parcel Way Bill (PWB) data from Railways to e-way bill portal , ensuring better traceability and compliance.
Systemic improvement with respect to mapping / de-mapping of the officers on the GSTN portal: Instruction
Editorial Note: The CBIC has observed that a GST officer, mapped in the GSTN portal, was not de-mapped with immediate effect after his relieving from the charge, which resulted into fraudulent sanction of refund by the officer. Therefore, it is decided that officers should be immediately de-mapped from the concerned field formation, on the GSTN portal, upon execution of the GFR-33.
SECTION 29 OF THE CENTRAL GOODS AND SERVICES TAX ACT, 2017 - REGISTRATION - CANCELLATION OF
Where no reason had been assigned for cancellation of registration of petitioner-assessee by respondent-department and by various judgments, it was held that reasons are heart and soul of any judicial and administrative order, therefore, cancellation order passed against petitioner-assessee by respondent-department was quashed and matter was remanded - Sumiran Construction v. State of U.P. - [2024] 167 taxmann.com 95 (Allahabad)
SECTION 61 OF THE CENTRAL GOODS AND SERVICES TAX ACT, 2017 - ASSESSMENT - SCRUTINY OF RETURNS
Where notice issued in alleged exercise of power under Section 61 of JGST Act read with Rule 99(1) of JGST Rules, as per assessee was wholly without jurisdiction and was in excess of power conferred upon Respondent-authority, first notice had been responded, second notice issued, writ petition was to be disposed of giving liberty to assessee to explain reason sought in second notice - Shyam Stone Works v. State of Jharkhand - [2024] 167 taxmann.com 51 (Jharkhand)
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 revenue had passed order against assessee without considering assessee's objection/reply to show cause notice and thus said order suffers from violation of principles of natural justice and non application of mind to material on record, writ petition was to be disposed of - Kajah Trading Private Limited v. State Tax Officer - [2024] 167 taxmann.com 19 (Madras)
Where respondent-department had failed to give any reasons apart from recording that petitioner-assessee had failed to respond to notice issued in DRC-01A or to notice in DRC-01 and Appellate Authority had also rejected appeal on ground of delay, further, there had been no appropriate consideration of matter on merits at any stage, therefore, instant case was remanded back to appellate authority for adjudicating on merits and order of rejection of appeal in Form GST APL-02 dated 03.04.2024 was set aside - Resinous Chemicals(India) (P.) Ltd. v. State of West Bengal - [2024] 166 taxmann.com 729 (Calcutta)
SECTION 75 OF THE CENTRAL GOODS AND SERVICES TAX ACT, 2017 - DEMANDS AND RECOVERY - GENERAL
Impugned GST order passed without providing mandatory opportunity of personal hearing under Section 75(4) set aside; matter remanded for fresh consideration after granting hearing - Tvl.Modular Building Systems v. Deputy State Tax Officer - [2024] 166 taxmann.com 735 (Madras)
SECTION 83 OF THE CENTRAL GOODS AND SERVICES TAX ACT, 2017 - DEMANDS AND RECOVERY - PROVISIONAL ATTACHMENT
In view of Circular NO. GST/INV/PROVISIONAL ATTACHMENT/ADVISORY/2023-24, DATED 2-9-2023 prescribing time-frame for initiation and conclusion of proceedings, attachment of bank account was to be lifted - RHC Global Exports (P.) Ltd. v. Union of India - [2024] 166 taxmann.com 730 (SC)
Objections against provisional attachment under GST law must be decided within reasonable time, not exceeding three months from submission date - Adabala Naryana Rao v. Union of India - [2024] 167 taxmann.com 37 (Rajasthan)
SECTION 132 OF THE CENTRAL GOODS AND SERVICES TAX ACT, 2017 - OFFENCES - PUNISHMENTS FOR CERTAIN OFFENCES
Bail petition of petitioner-applicant and documents attached to it, point towards petitioner-applicant’s involvement in offence, therefore, no case was made out for anticipatory bail, and therefore, instant application under Section 438 was to be dismissed - Suresh Chand Meena v. Anti Corruption Bureau Faridabad - [2024] 167 taxmann.com 96 (Punjab & Haryana)
COMPANY AND SEBI LAWS
CIRCULAR NO. SEBI/HO/CFD/CFD-POD-2/P/CIR/2024/133, DATED 03-10-2024
SEBI relaxes Listed Entities from dispatching hard copies of Annual Report for AGMs held till 30.09.2025
领英推荐
Editorial Note: Earlier, MCA vide Circular dated Sep 19, 2024, had extended the relaxation from sending of physical copies of financial statements (including Board’s report, Auditor’s report etc.) to shareholders for the AGMs conducted till Sep 30, 2025. Therefore, to bring it in line with MCA Circular, SEBI has decided to extend the relaxation to listed entities. Listed entities are relaxed from sending a hard copy of the annual report for the AGMs conducted till Sep 30, 2025.
MCA NOTIFICATION S.O. 4333(E), DATED 03-10-2024
Govt. appoints Smt. Deepti Gaur Mukerjee as chairperson to the Investor Education and Protection Fund
Editorial Note: The Central Government has appointed Smt. Deepti Gaur Mukerjee as chairperson to the Investor Education and Protection Fund Authority (IEPF)'
MCA NOTIFICATION G.S.R. 607(E), DATED 03-10-2024
Govt. mandates signing of Financials of the IEPF Authority by the Chief Executive Officer
Editorial Note: The Govt. has notified Investor Education and Protection Fund Authority (Form of Annual Statement of Accounts) Amendment Rules, 2024. As per the amended norms, the annual statement of accounts of the Investor Education and Protection (IEPF) Authority shall be signed by the Chairperson and the Chief Executive Officer. Earlier the same was signed by the Chairperson and the one member.
FEMA BANKING AND INSURANCE LAWS
PRESS RELEASE NO. 2024-2025/1225, DATED 04-10-2024
RBI releases draft circular on ‘Forms of business and Prudential Regulation for Investments’
Editorial Note: RBI has released a draft circular on ‘Forms of business and Prudential Regulation for Investments’. As per draft circular, only a single entity within a bank group must undertake a particular form of permissible business. Multiple entities within a bank group must not undertake the same business or hold/acquire the same category of license/authorisation or registration from any financial sector regulator. This circular applies to all SCBs (excluding RRBs).
CIRCULAR NO. RBI/2024-25/79 A.P. (DIR SERIES) CIRCULAR NO. 18; DATED 04-10-2024
RBI directs AD Category-I banks to ensure FEMA-compliant guarantee contracts for resident constituents
Editorial Note: RBI came across instances of guarantees issued by persons resident outside India, favouring persons resident in India, which are not permitted under the extant FEMA regulations. The RBI has now directed AD Category-I banks to ensure that guarantee contracts advised by them to or on behalf of their resident constituents are in accordance with the FEMA regulations.
SECTION 138 OF THE NEGOTIABLE INSTRUMENTS ACT, 1881 - DISHONOUR OF CHEQUE FOR INSUFFICIENCY ETC., OF FUNDS IN ACCOUNT
Where cheque issued by accused company to discharge its liability had been dishonoured, in view of fact that petitioners were independent Non-Executive Directors of accused and there were no averments ascribing any role to petitioners leading to an inference that they were involved in day to day functioning of company or in-charge of its business and there were no allegations they had signed said cheque, no criminal liability could be fastened on petitioners and accordingly, impugned summoning order of Trial Court was to be set aside - Rajesh Madan v. Good Marketing and Sales Pvt Ltd - [2024] 167 taxmann.com 135 (Delhi)
INSOLVENCY AND BANKRUPTCY CODE
SECTION 14 OF THE INSOLVENCY AND BANKRUPTCY CODE, 2016 - CORPORATE INSOLVENCY RESOLUTION PROCESS - MORATORIUM - GENERAL
During a moratorium period, supply of essential goods or services to a corporate debtor can be interrupted if payments for those supplies are not made; where corporate debtor did not pay for electricity during moratorium, impugned order passed by NCLT directing appellant not to disconnect electricity connection of corporate debtor was to be set aside - Noida Power Company Ltd. v. Gaurav Katiyar RP of Earthcon Universal Infractech (P.) Ltd. - [2024] 167 taxmann.com 145 (NCLAT- New Delhi)
SECTION 220 OF THE INSOLVENCY AND BANKRUPTCY CODE, 2016 - INSPECTION AND INVESTIGATION OF INSOLVENCY PROFESSIONALS - DISCIPLINARY COMMITTEE - APPOINTMENT OF
Where petitioner, IP, had failed to protect assets of corporate debtor and there was a substantial delay in submission of forms by petitioner with Board, several instances of failure on part of petitioner had been found in failing to protect assets of corporate debtor and, therefore, order of Disciplinary Committee of IBBI suspending registration of petitioner for a period of two years was justified - Sandeep Kumar Bhatt v. Insolvency and Bankruptcy Board of India - [2024] 167 taxmann.com 136 (Delhi)
OPINIONS
Illustrations on validity of reassessment notices after Rajeev Bansal’s case - Dr. Vinod K. Singhania, Leader - Research & Advisory, Taxmann, CA Rahul Singh, Senior Manager - Research and Advisory, Taxmann - [2024] 167 taxmann.com 148 (Article)
Fallouts of Supreme Court decision in the case of Rajeev Bansal - Vinay V. Kawdia, CA - [2024] 167 taxmann.com 149 (Article)
Analysis of judgement of Hon’ble Apex Court in Rajeev Bansal’s case - D.C. Agrawal, Advocate - [2024] 167 taxmann.com 147 (Article)
Role of Invoice Management System (IMS) in GST Compliance - Mohit Mangla, Chartered Accountant, Sonal Rastogi, Chartered Accountant - [2024] 167 taxmann.com 118 (Article)
Forfeiture of Advance Payments by Developers - Avikshit Moral, Partner, S&R Associates, Mahek Chheda, Associate, S&R Associates - [2024] 167 taxmann.com 119 (Article)
Seven Years of Misreporting: ROC slaps penalties on Company and its directors for financial inaccuracies - Prof R Balakrishnan, FCS – FCMA - [2024] 167 taxmann.com 116 (Article)
Deep Dive into SEBI's Board Meeting dated September 30, 2024 - Taxmann’s Advisory and Research Team (Corporate Laws) - [2024] 167 taxmann.com 71 (Article)
Key Changes to the Competition Act, 2002 - Rajat Sethi, Partner, S&R Associates, Simran Dhir, Head of Competition Law Practice, S&R Associates, Akshat Kulshrestha, Partner, S&R Associates - [2024] 167 taxmann.com 117 (Article)
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