Daily Tax | Corporate Laws | Accounting Digest
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Welcome to Taxmann.com | Newsletter – Reporting the Facts with Taxmann’s Analysis. Today’s Edition Brings to You with a Section-wise Digest of Statutes | Judgments?| Opinions.
INCOME TAX
SECTION 32 OF THE INCOME-TAX ACT, 1961 - DEPRECIATION - ADDITIONAL DEPRECIATION
General: Where plant and machinery were purchased in less than 180 days in earlier year and 50 per cent of additional depreciation in respect of said plant and machinery was allowed in immediate preceding year, balance 50% additional depreciation, i.e., 10% of aforesaid amount was to be allowed during year under consideration - Principal Commissioner of Income-tax 3 v. Banaskantha Dist Co. Op Milk Producers Union Ltd. - [2024] 168 taxmann.com 154 (Gujarat)
General: Where assessee was a society engaged in processing and manufacturing of milk and milk products, since activity carried out by assessee was not only processing of milk but involved detailed technical machineries and manufacturing different kind of milk products, assessee was entitled to additional depreciation on plant and machinery purchased during previous year under section 32(1)(iia) - Principal Commissioner of Income-tax 3 v. Banaskantha Dist Co. Op Milk Producers Union Ltd. - [2024] 168 taxmann.com 154 (Gujarat)
Electrical fittings: Electrical fittings were to be considered as integral part of plant and machinery and assessee was eligible for depreciation and additional depreciation on these items - Principal Commissioner of Income-tax 3 v. Banaskantha Dist Co. Op Milk Producers Union Ltd. - [2024] 168 taxmann.com 154 (Gujarat)
SECTION 148A OF THE INCOME-TAX ACT, 1961 - INCOME ESCAPING ASSESSMENT - CONDUCTING INQUIRY, PROVIDING OPPORTUNITY BEFORE ISSUE OF NOTICE
Income of co-operative societies: Where Assessing Officer issued a notice under section 148A(d) which culminated in an order passed under section 148A(d) and a notice under section 148 to assessee-society, though assessee had neglected by not filing of return and had not participated in proceedings, however they did deserve one more opportunity to vent out their grievances in reassessment proceedings and, therefore, cases were remitted back to the revenue to pass fresh orders on merits - N.N.625 V. Pudur Primary Agricultural Co-operative Credit Society v. Assessment Unit, Income-tax Department - [2024] 168 taxmann.com 234 (Madras)
SECTION 192 OF THE INCOME-TAX ACT, 1961 - DEDUCTION OF TAX AT SOURCE - SALARY
General: SLP was to be dismissed against order of High Court that where State Government as a payer of salary under Income-tax Act, is not bound by any religious tenets or provisions of Canon Law; hence salaries in form of Grant-in-aid received by Nuns, Sisters or Missionaries working as teachers in religious institutions, from State Government, are taxable - Institute of the Franciscan Missionaries of Mary v. Union of India - [2024] 168 taxmann.com 191 (SC)
SECTION 194LA OF THE INCOME-TAX ACT, 1961 - DEDUCTIONS OF TAX AT SOURCE - ACQUISITION OF IMMOVABLE PROPERTY
Compensation: Section 96 of Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 applies only to awards or agreements made under provisions of said Act and, thus, compensation awarded for land acquired under provisions of Karnataka Highways Act, 1964 would not be exempt from income tax in terms of section 96 of 2013 Act - Commissioner of Income-tax (TDS) v. Tushira Industries - [2024] 168 taxmann.com 169 (Karnataka)
Reimbursement: Where State Government had agreed to reimburse income tax component in respect of compensation payable to land-losers, exemption from levy of income tax could not be claimed on ground that State Government had agreed to reimburse tax - Commissioner of Income-tax (TDS) v. Tushira Industries - [2024] 168 taxmann.com 169 (Karnataka)
SECTION 195 OF THE INCOME-TAX ACT, 1961 - DEDUCTION OF TAX AT SOURCE - PAYMENT TO NON-RESIDENT
Advance tax: SLP dismissed owing to low tax effect against High Court ruling that if payer, who was required to make payments to non-resident, had deducted tax at source from such payments, question of payment of advance tax by payee would not arise and, therefore, it would not be permissible for revenue to charge any interest under section 234B - Director of Income-tax International Taxationv. Texas Instruments Incorporated - [2024] 168 taxmann.com 167 (SC)
GOODS AND SERVICES TAX LAWS
SECTIONS 2(34) OF THE CUSTOMS ACT, 1962 - PROPER OFFICER
In Section 28 of Customs Act, 1962 "the proper officer" for refers to person conferred powers to discharge functions by notification under Section 5, and it is not related to "proper officer" referred under Section 17 for duty assessment; hence, DRI officers designated as "the proper officer" by Notification No. 44/2011-Cus.N.T. dated 06.07.2011 were competent to issue show cause notices under Section 28, and contrary view of three judge Supreme Court bench in Canon India 2021 (376) E.L.T. 3 (S.C.) reviewed as it was found to have several errors - Commissioner of Customs v. Canon India (P.) Ltd. - [2024] 168 taxmann.com 221 (SC)
SECTION 9 OF THE CENTRAL GOODS AND SERVICES TAX ACT, 2017 - LEVY & COLLECTION OF TAX
Fly Ash Bricks with less than 90% fly ash content would be taxable at rate of 5% GST (2.5% CGST + 2.5% SGST) - Shree Mahalaxmi Cement Products through Its Director Mr. Dipakkumar Ramjibhai Patel v. State of Gujarat - [2024] 168 taxmann.com 75 (Gujarat)
SECTION 17 OF THE CENTRAL GOODS AND SERVICES TAX ACT, 2017 - INPUT TAX CREDIT - CREDIT AND BLOCKED CREDITS, APPORTIONMENT OF
Where assessee had filed Writ Petition challenging show cause notice proposing to deny ITC in respect of goods used in construction of building on their own land for giving it on lease to a society for running a school and adjudication order was passed subsequently in said show cause notice, such Writ Petition was to be dismissed with liberty to them to avail appellate remedy against adjudication order by filing appeal thereagainst before Appellate Authority and to rely upon decision of Supreme Court in (2023) 23 Centax 62 (S.C.) - Chirantan Enterprises LLP through Partner Mr. Prem Sethia v. Commissioner CGST and Central Excise - [2024] 168 taxmann.com 61 (Madhya Pradesh)
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 it had been specifically held in M/s Yadav Steels Vs. Additional Commissioner & Another, that delay in filing appeal could not be condoned beyond prescribed period of limitation, therefore, following aforesaid judgement, this court did not find any merit in writ petition filed by petitioner-assessee against respondent-department - New Vijay Traders v. Union of India - [2024] 168 taxmann.com 230 (Allahabad)
ARTICLE 137 OF CONSTITUTION OF INDIA, 1950 - REVIEW OF JUDGMENTS OR ORDERS BY THE SUPREME COURT
Supreme Court judgment disposed of without regard to provision of law amounts to error analogous to one apparent on face of record sufficient to bring case within purview of Order XLVII Rule 1 of Code of Civil Procedure, 1908, and be reviewed as per incuriam - Commissioner of Customs v. Canon India (P.) Ltd. - [2024] 168 taxmann.com 221 (SC)
COMPANY AND SEBI LAWS
REGULATION 8 OF THE SECURITIES AND EXCHANGE BOARD OF INDIA (SETTLEMENT PROCEEDINGS) REGULATIONS, 2018 - EFFECT OF PENDING APPLICATION ON SPECIFIED PROCEEDINGS
Where SEBI issued a show-cause notice (SCN) to petitioner company and seven others regarding trading in petitioner's scrip but proceedings in SCN were stalled by petitioner for one reason or another, even application by petitioner seeking settlement of SCN was appeared to have been made only to benefit from provisions of Regulation 8, which required that final order in SCN be kept in abeyance until settlement application was disposed of, settlement division of SEBI rightly rejected petitioners’ settlement application - ABANS Enterprises Ltd. v. Securities and Exchange Board of India - [2024] 168 taxmann.com 279 (Bombay)
SECTION 56 OF THE COMPANIES ACT, 2013 - SECURITIES - TRANSFER AND TRANSMISSION OF
Where NSE failed to show any authority vested in them for issuing communication to transfer agent of company directing them not to transfer shares held by petitioner, impugned communication issued by NSE was to be quashed and set aside - Aloysius D’Souza v. Union of India - [2024] 168 taxmann.com 333 (Bombay)
SECTION 59 OF THE COMPANIES ACT, 2013 - REGISTER OF MEMBERS
Where petitioner failed to pay treatment charges to respondent company incorporated for carrying out treatment of common effluents discharged from dyeing units owned by its members, equity shares of petitioner were rightly cancelled and re-allotted among existing members who had been discharging their effluents to plant - Palaniammal Baladhandapani v. Mannarai Common Effluent Treatment Plant (P.) Ltd. - [2024] 168 taxmann.com 280 (NCLT- Chennai )
FEMA BANKING AND INSURANCE LAWS
SECTION 3 OF THE PREVENTION OF MONEY LAUNDERING ACT, 2002 - OFFENCE OF MONEY LAUNDERING
Where MBS Group represented by ‘S’ and ‘A’ were engaged in defrauding, cheating and causing wrongful loss to MMTC and proceeds of crime accrued were invested by ‘A’ in appellant company, in fact sole purpose of establishing appellant was to hide proceeds of crime and present them as untainted money, as appellant did not explain source of its capital, appellant was rightfully proceeded against under PMLA, 2002 - Musaddilal Gems & Jewellers India (P.) Ltd. v. Deputy Director Directorate of Enforcement, - Hyderabad - [2024] 168 taxmann.com 204 (SAFEMA - New Delhi)
SECTION 9 OF THE FOREIGN EXCHANGE REGULATION ACT, 1973 - RESTRICTIONS ON PAYMENT
Where appellant bank opened a current account in its books in name of a non-resident company for which foreign company or bank did not have requisite statutory or regulatory permission from RBI, appellant bank violated provisions of section 9(1)(e) of FERA but penalty imposed upon appellant bank was to be substantially reduced bank itself had brought matter to notice of RBI and ED - Indian Bank (formerly Allahabad Bank) v. Special Director Directorate of Enforcement, Delhi -[2024] 168 taxmann.com 241 (SAFEMA - New Delhi)
SECTION 45-IA OF THE RESERVE BANK OF INDIA ACT, 1934 - REQUIREMENT OF REGISTRATION AND NET OWNED FUND
Where Certificate of Registration (CoR) to carry on business of non-banking financial institution (NBFI) of petitioner - NBFI was cancelled by RBI on grounds of non fulfilment of its directions prescribing to maintain a minimum Net-Owned Fund target amount, since petitioner achieved said target before passing of cancellation order by RBI, matter for restoration of CoR was to be remanded back to RBI for afresh consideration and, thus, writ petition filed by petitioner seeking restoration of CoR was to be disposed - Hindon Mercantile Ltd. v. Government of India - [2024] 168 taxmann.com 240 (Delhi)
INSOLVENCY AND BANKRUPTCY CODE
SECTION 61 OF THE INSOLVENCY AND BANKRUPTCY CODE, 2016 - CORPORATE PERSON'S ADJUDICATING AUTHORITIES - APPEALS AND APPELLATE AUTHORITY
Where appellant had knowledge of CIRP proceedings and resolution plan approved by NCLT, however, appeal against impugned order was filed beyond period of limitation, application for condonation of delay was to be dismissed - Southern Power Distribution Company of Telangana Ltd. v. Kalvakolanu Murali Krishna Prasad - [2024] 168 taxmann.com 242 (NCLAT - Chennai)
SECTION 238 OF THE INSOLVENCY AND BANKRUPTCY CODE, 2016 - OVERRIDING EFFECT OF CODE
Where respondent-creditor had failed to submit its claim during CIRP and liquidation of corporate debtor, claim of respondent stood extinguished and it could not seek to recover those claims from successful bidder, who acquired assets of corporate debtor through auction process under IBC - Maha Mineral Mining and Benefication (P.) Ltd. v. Gram Panchayat, Gowari - [2024] 168 taxmann.com 203 (Bombay)
ACCOUNTS AND AUDIT
Ind AS 113 compliance: Fair Value determination beyond Book Value for Unquoted Equity
Editorial Note: This story explores the determination of fair value for unlisted equity investments under Ind AS 113. It highlights the principles of fair value measurement, the role of observable and unobservable inputs, and the limitations of relying solely on book value. The discussion emphasizes the importance of adopting appropriate valuation techniques to ensure compliance with Ind AS requirements.
OPINIONS
GST Due Diligence in M&A: A Crucial Step - ·CA Srikanth Kolla, Partner – Indirect Taxation, SBC - [2024] 168 taxmann.com 337 (Article)
M&A in the Ports Sector in India: Key Regulatory and Contractual Considerations - Rajat Sethi, Partner, S&R Associates, Aakanksha Joshi, Partner, S&R Associates, Apurv Sharma, Counsel, S&R Associates, Ameesha Tripathi, Associate, S&R Associates - [2024] 168 taxmann.com 338 (Article)
The New Compounding Rules under FEMA - P. Venkatesan, Chartered Accountant, FEMA Consultant - [2024] 168 taxmann.com 339 (Article)
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