- AO couldn't make re-assessment for unexplained investment merely on basis of roving enquiry
- Payment made for supply of Software embedded in mobile phones couldn't be taxed as royalty
- Assessee has option to choose initial assessment year for Sec 80IA relief
- Fraud related issues couldn't be decided by NCLT in a petition filed for rectification of register
- Stakeholders have to compulsory file Form 3 within 30 days of incorporation for initial agreement and changes with regard to LLP , before filing of Form 8 and Form 11
Wednesday, February 15, 2017
Currently, FPIs can trade in Indian markets only through brokers who are registered with stock exchanges as their members.
- A merged entity should have at least 25% public shareholding
- Must be listed on NSE,BSE, or an exchange with nationwide terminals
- SEBI pricing formula will apply
- Compulsory e-voting if a substantial part of listed firms gets transferred into unlisted
- Compulsory e-voting if shares of unlisted firms are being acquired by promoters
Jatinder Kumar Sachdeva v. Union of India*  77 taxmann.com 50
Fortune Park Hotels Ltd. v. Commissioner of Service Tax Delhi*  77 taxmann.com 183
Community Welfare Banquet Association v. Govt. of NCT of Delhi*  77 taxmann.com 45 (Delhi)
Commercial Tax Officer v. Coimbatore Auto Garage (P.) Ltd.*  77 taxmann.com 70 (SC)
Samsung India Electronics (P.) Ltd. v. State of Bihar*  77 taxmann.com 217
- CBEC amends service tax rules to clarify the tax will be on entire amount, if customer directly pays to these aggregators
- If customer pays only commission to aggregators and other charges to hotel, tax liability on aggregators will be on commission only
- Currently, customer pays entire amount to aggregators because they give discounts
- International players out of service tax net
- Service tax is payable at 6-15%, depending on the kind of services provided by aggregators
- Rules effective from January 22. Aggregators have started charging more to accommodate for service tax
Assessees with a turnover over Rs 1.5 crore will be administratively controlled by the Centre and States in equal measure. However, no assessee would be controlled by two authorities and there would be computer-based enforcement at both the Centre and the States. Those assessees who fall under the integrated GST (IGST) - for the movement of goods and services between states - will also be administered by the Centre and States, depending on their annual turnover (Rs 1.5 crore, or more).
NCLT doesn't have powers to grant exemption from holding meeting wherein M&A Scheme to be considered
The National Company Law Tribunal, New Delhi Bench held that in compromise and arrangement Tribunal is not empowered to dispense meeting of shareholders/members; but it may dispense with calling of meeting of creditors against affidavit of creditors having 90 per cent value a judgment of SC issued on assessee a notice under section 31 seeking to reopen his assessment, issuance of notice would amount to change of opinion Samsung India Electronics (P.) Ltd. v. State of Bihar*  77 taxmann.com 217
Restrictions regarding voting on related party transactions have also been relaxed. Also from internal audit requirements, on certain conditions. Public companies at IFSC have been exempted from appointment of a woman as director and of independent directors.
The undisclosed income deposited in the accounts with Post Office/Banks can be declared under the Scheme.
- The Scheme is not available for declaration of an income which is represented in the form of assets like jewellery, stock or immovable property.
- Deposits made by any mode such as cash, cheque, RTGS, NEFT, or any electronic transfer systems are eligible.
- Where a notice under section 142(1)/ 143(2)/ 148/ 153A/ 153C of the Income-tax Act has been issued to a person for an assessment year, even such person be eligible for making a declaration under the Scheme.
- Even a person against whom a search/ survey operation has been initiated can file declaration under the Scheme. The cash seized and deposit with Bank/Financial Institution during search operation can be declared under the scheme in the form of cash or deposit in an account maintained by specified entity.
- No credit for advance tax paid, TDS or TCS shall be allowed under the Scheme.
- Undisclosed income represented in the form of deposits in foreign bank account is not eligible for the scheme.
- Deposits made in bank account prior to financial year 2016-17 can also be declared under the Scheme.
- Undisclosed deposits between 01.04.2016 to 15.12.2016 shall also attract tax at the rate provided in the Taxation Laws (Second Amendment) Act, 2016.
- Undisclosed income deposited/repaid in an Overdraft Account or Cash Credit Account or any loan account maintained with a bank is eligible for being declared under the Scheme.
- The adjustment of cash seized by the Department and deposited in the Public Deposit Account may be allowed to be adjusted for making payment of tax, surcharge and penalty under the Scheme on the request of the person from whom the cash is seized. However, the said amount shall not be allowed to be adjusted for making deposits under the Pradhan Mantri Garib Kalyan Deposit Scheme.
- Cash deposited in third party account can also be declared under the scheme. Brownfield (100%) - Automatic upto 74%, Government route beyond 74%
Explanatory Notes on- PMGKY, 2016
- A declaration under the aforesaid Scheme may be made in respect of any income in the form of cash or deposit in an account maintained by the person with a specified entity, chargeable to tax under the Income-tax Act for any assessment year commencing on or before the 1st day of April, 2017.
- No deduction in respect of any expenditure or allowance or set-off any loss.
- 30% Tax, 33% of tax as surcharge, 10% of undisclosed income penalty & 25% of undisclosed income as 4 year interest free deposit under the scheme.
It is an Indian company; or
Its place of effective management in that year is in India.
A company shall be said to be engaged in “active business outside India” if the passive income is not more than 50% of its total income; and
- Less than 50% of its total assets are situated in India; and
- Less than 50% of total number of employees are situated in India or are resident in India; and
- The payroll expenses incurred on such employees is less than 50% of its total payroll expenditure.
“Passive income” of a company shall be aggregate of, -
- Income from the transactions where both the purchase and sale of goods is from / to its associated enterprises; and
- Income by way of royalty, dividend, capital gains,interest or rental income;
However, any income by way of interest shall not be considered to be passive income in case of a company which is engaged in the business of banking or is a public financial institution, and its activities are regulated as such under the applicable laws of the country of incorporation. “Senior Management” in respect of a company means the person or persons who are generally responsible for developing and formulating key strategies and policies for the company and may include Managing Director/CEO, Director of Finance/CFO, COO, Sales head, Technology or Production head.
The place of effective management in case of a company engaged in active business outside India shall be presumed to be outside India if the majority meetings of the board of directors of the company are held outside India unless the Board of directors of the company are standing aside and not exercising their powers of management.For the purpose of determining whether the company is engaged in active business outside India, the average of the data of the previous year and two years prior to that shall be taken into account. In cases of companies other than those that are engaged in active business outside India:-
- First stage would be identification or ascertaining the person or persons who actually make the key management and commercial decision for conduct of the company’s business as a whole.
- Second stage would be determination of place where these decisions are in fact being made.
Some of the guiding principles:-
- The location where a company’s Board regularly meets and makes decisions.
- If a board has de facto delegated the authority, place of effective management will ordinarily be the place where these senior managers or the other person make those decisions.
- The location where the members of the executive committee are based and where that committee develops and formulates the key strategies and policies for mere formal approval
- The location of a company’s head office.
- The decisions made by shareholder on matters which are reserved for shareholder decision under the company laws are not relevant for
- determination of a company’s place of effective management.
- It may be clarified that day to day routine operational decisions undertaken by junior and middle management shall not be relevant for the purpose of determination of POEM.
If the above factors do not lead to clear identification of POEM then the following secondary factors can be considered:-
- Place where main and substantial activity of the company is carried out; or
- Place where the accounting records of the company are kept.
Determination of POEM is to be based on all relevant facts. POEM shall be presumed to be in India if it has been mainly /predominantly in India.
- NCLT admits insolvency filed by UB Engineering Ltd
- This is the first such case the NCLT has admitted
- Following the decision, UB Holdings, which owned about 37% loses control over the affairs of UBEL
- Failing resolution, the company will go in for liquidation
- Though UBEL is a listed company, the stock has been suspended from BSE for penal reasons
- UBEL has classified term loans, cash credits and other facilities availed from banks as 'other current liabilities', which at the end of the FY16 stood at Rs. 434.9 crore.
Prohibition on Indian Party from making direct investment in countries identified by the FATF as "Non Co-operative countries and territories"
Commissioner of Income-tax, Chennai v. K.N. Pannirselvam*  77 taxmann.com 24 (Madras)
- Registration and Generation of Income Tax Department Registered Entity Identification Number (ITDREIN)
- Registration of designated director and principal officer
- Submission of FORM -61A
- Submission of correction statement
Sec. 80P relief available to Co-operative credit society providing credit facilities only to its members
on merits.Appeals that may have been filed in violation of these instructions may be withdrawn. Circular No. 5/2017
regulations/tariff orders shall be submitted to the apex court.
The Cabinet amended the Modified Special Incentive Package Scheme (M-SIPS) to boost electronic manufacturing. Under the amended rules, companies that invest in manufacturing would get up to Rs 10,000 crore as incentives. New investment proposals would be accepted till December 31, 2018. M-SIPS provides a subsidy for capital expenditure - 20 per cent for investments in Special Economic Zones (SEZs) and 25 per cent in non-SEZs. Under the amended rules, companies will receive ncentives within five years from the date of approval to ensure timebound delivery, now eligible proposals will be approved within 120 days of their complete submission. The units receiving incentives under the scheme will have to provide an undertaking to remain in commercial production for at least 3 years.
agricultural as well as to achieve Make in India, a vibrant and strong Banking Sector is a must. The role of catalyst is to be played by top financial experts to check out a clear strategy for revival of all borrowing entities by bringing their debt levels to sustainable level. The following suggestions may be considered by Bank
- Construction of Special Task Force in all banks
- Purchase of all such assets in a separate pool by bank for further disposal- as a trustee
- Restructuring of Advances
- Options to management to pay optionally convertible debenture over 8 years after 2 year moratorium.
- Separate Bad Bank- may be reconsidered as it may be too difficult by one entity to manage so much.
- Independent Bank Directors
- Recapitalization of Small Banks needed for growth