Exemption benefit cannot be denied to educational trust simply because it had generated surpluses, if distribution of surpluses was prohibited among members even upon dissolution

THE ISSUE BEFORE THE TRIBUNAL IS – Whether exemption benefit can be denied to an educational institution solely for the reason that it had been generating surpluses, when the distribution of surpluses was prohibited among the members of society even upon dissolution. NO is the answer.  

Continue reading “Exemption benefit cannot be denied to educational trust simply because it had generated surpluses, if distribution of surpluses was prohibited among members even upon dissolution”

MCA issues Draft Valuation Rules

The draft Companies (Registered Valuers and Valuation) Rules, 2017 have been placed on the Ministry’s website http://www.mca.gov.in for suggestions/ comments. 

same may be viewed and downloaded using the following link:


Suggestions/ comments on the draft rules along with justifications in brief may be sent latest by 27/06/2017 through email at comments_rv@mca.gov.in It is requested that the name, contact number, email address and postal address of the sender be indicated clearly at the time of sending suggestions/comments in the format provided in the following link:


Please note that an individual having membership of a professional institute set up under an Act of Parliament and at least five years’ experience after such membership shall be eligible for registration. Passing of Valuation Examination is also one of the criteria subject to conditions specified in the said Rules

CBDT constitutes committee to recommend measures for ‘expeditious recovery of tax arrears’

CBDT constitutes a 7-member committee to recommend measures for expeditious recovery of tax arrears under the chairmanship of Pr. DGIT (Admin) Mr. Aditya Vikram, ; Committee’s terms of reference (‘ToR’) include: 1) study of broad categories under which arrears of taxes are classified and suggesting class-specific measures for expeditious collection, 2 )making of policy-level recommendations for dealing with demand which is older than a certain number of years, 3) examining charges / regions that are more prone to raising demands which remain uncollected for long period and making suitable suggestions, 4) studying top dossier cases to see whether additional parameters of monitoring are required, 5) reviewing whether policy of ‘naming and shaming’ of confirmed defaulters of arrears has served its intended purpose and whether there is a need to expand its scope (eg: sharing defaulters data with banks, financial institutions) and 6) making recommendations on any other issue relating to collection and management of demand arrears; Committee to submit report to the Board by July 15th

25 Key Takeaways of Final GST Rules passed by GST Council:

GST Rules:


In its 14th meeting in Srinagar on 18th and 19th May,2017 the all-powerful GST council cleared seven rules pertaining to different aspects of GST. These rules relate to Registration, Input Tax Credit, Payment, Refund, Invoice, Valuation and Composition and have paved the way for the rollout of GST from July 1, 2017. The key highlights of these final GST Rules are as follows:  

Continue reading “25 Key Takeaways of Final GST Rules passed by GST Council:”

Union Cabinet approves the decision to abolish Foreign Investment Promotion Board

We present the Regulatory Alert which summarizes the key takeaways from the decision of the Union Cabinet approving the abolition of the Foreign Investment Promotion Board (FIPB). Given the involvement of multiple ministries in the approval process, the time taken for approval was considerable, affecting the foreign investment decisions of foreign investors. As a result, the Government reassessed the utility of the FIPB and the Hon’ble Finance Minister in his 2017 Budget speech announced the abolition of the FIPB in line with the ultimate objective of “ease of doing business” and the principle of “maximum governance and minimum government. In line with the Budget announcement on 24 May 2017, the Union Cabinet formally approved the proposal of scrapping the FIPB. The decision to abolish the FIPB is a welcome step and will help in ease of processing of foreign investment approval requests. With the new arrangement, only line ministries will consider foreign investment proposals, which is expected to reduce the approval processing time. By involving the Department of Industrial Policy & Promotion (DIPP) in the approval process, the Government has attempted to maintain consistency and continuity, which is vital for the foreign investors. We expect that in the Standard operating procedure, the DIPP will suitably address the transit and procedural issues.  The Government should now focus on bringing more sectors under the automatic route to attract higher foreign investment

HC: Upholds Sec. 10A/10AA claim for providing travel reservation facility access; Rejects ‘no export’ plea

Delhi HC approves ITAT order allowing Sec. 10A deduction to Amadeus India (assessee, a 100% EOU engaged in rendering ITeS data processing services to Amadeus Spain) for AY 2009-10, notes that assessee’s sole activity was to provide software connectivity for providing access to Amadeus Computer Reservation System (‘CRS’) facility to travel agents for which it received income from Amadeus Spain; Rejects Revenue’s stand that beneficiaries of assessee’s activities were located in India and thus there was no real export of services, takes note of ITAT’s categorical finding based on STPI and Export Promotion Council’s (‘ESC’) reports that assessee ‘manufactures, produces and exports software’ and that it could claim exemption under any of the three provisions viz., Sec. 80HHE / 10A / 10B of the Act; Further rejects Revenue’s contention that ITAT erred in relying on its co-ordinate bench ruling in assessee’s own case for AY 1996-97 (which was rendered in context of Sec. 80HHE), remarks that “the essence of both Section 80 HHE and Section 10A in terms of the conditions of eligibility are not very different”; Also dismisses Revenue’s argument that assessee couldn’t be said to be exporting computer software, takes note of ITAT’s observations that “if the assessee is registered as a unit for manufacture and export of software…for all other aspects, it would be…unjust to say that it is not an exporter of software for purposes only of Income-tax”; Similarly, HC also upholds ITAT order in the case of another assessee (i.e. Ineterglobe Technology, having business model similar to Amadeus India), grants Sec.10AA deduction on income generated by its SEZ units from export of data processing services to Galileo B.V (a Netherlands based company, maintaining and operating CRS facility for airlines/hotel bookings worldwide) for AY 2007-08:HC

SC : Affirms HC, manufactured LPG not exempt absent supply in cylinders ‘for domestic use’

SC dismisses assessee’s SLP, affirms HC order denying exemption w.r.t. manufactured LPG, wherein it was held that, as per Entry 21A of Schedule A of Maharashtra VAT Act, such benefit would be available only for “LPG supplied in cylinders containing upto 14.5 kg. of LPG for domestic use” for period June 7, 2008 to March 31, 2012; Rejecting assessee’s contention that, words employed viz. “LPG for domestic use” ought to be construed in light of Trade Circular dated June 6, 2008 as being ‘meant for domestic use’, HC held that, Trade Circular cannot control interpretation of exemption clause/Schedule entry which carves out the same; HC stated that, assessee only manufactured gas, but packing activity was carried out by HPCL and mere certificate that ‘LPG is sold for domestic use’ will not make assessee eligible for exemption if conditions are not fulfilled : SC


Contribution made by bank towards Retired Employees Benefit Scheme cannot be allowed, if such payment is not permitted u/s 36 of I-T Act: HC

THE ISSUE BEFORE THE COURT IS – Whether contribution made by a bank towards Retired Employees Benefit Scheme in view of Section 40A(9) deserves to be allowed, if such payment is not permitted u/s 36 of I-T Act. NO is the verdict.   

Continue reading “Contribution made by bank towards Retired Employees Benefit Scheme cannot be allowed, if such payment is not permitted u/s 36 of I-T Act: HC”

JDA results in land-transfer; Sec. 2(47)(v) doesn’t contemplate ‘exclusive’ possession of developer

Chennai ITAT rules that land-transfer shall be taxable in the year of entering into the Joint Development Agreement (‘JDA’) and not in relevant AY 2011-12 (when constructed area was transferred), relies on Bombay HC ruling in Chaturbhuj Dwarkadas Kapadia; In 2006, assessee (land-owner) had entered into a JDA for construction of residential-cum–commercial complex, pursuant to which assessee received constructed area in lieu of transfer of land in favour of developer, Revenue assessed capital gains on sale of both (land and constructed area) in relevant AY upon sale of constructed area; Firstly, ITAT clarifies that land is one capital asset transferred by the assessee and constructed area allotted to assessee constitute a different capital asset, with respect to land-transfer ITAT observes that conditions of ‘transfer’ as contemplated u/s 2(47)(v) (i.e. parting with land possession under JDA in part performance of contract) are satisfied in present case; Rules that possession as contemplated therein need not necessarily be sole and exclusive possession, states that as long as the transferee (i.e. developer) is enabled to exercise general control over the property to make use of it for intended purpose, there is no warrant to postpone operation of clause 2(47)(v) to that point of time when concurrent possession would become exclusive possession of the developer, mere fact that the ownership is continued with assessee to oversee the development work doesn’t affect applicability of Sec. 2(47)(v); ITAT however, rejects assessee’s stand that commencing from the date of transferring the land to the developer and ending on the date when the assessee sold his share of constructed area constitute a single transaction, remarks that “this contention easily defeat very charging provision of Sec.45 by postponing the sale of new asset indefinitely.”:ITAT