Whether advances can be treated as deemed dividend in hands of assessee, if he is not shareholder having substantial voting rights in lender company – NO: HC

THE ISSUE IS – Whether advances made to an assessee can be added as deemed dividend u/s 2(22)(e) in his hand, if he is not a shareholder having substantial voting rights in the lender company. NO is the verdict.

Finmin notifies Rules for bilateral safeguard measures under India-Japan Trade Agreement

Finance Ministry notifies India-Japan Comprehensive Economic Partnership Agreement (Bilateral Safeguard Measures) Rules, 2017; As per Rule 3 thereof, Director General shall inter alia investigate whether increased imports of an originating good from Japan into India, have caused or threatening to cause serious injury to domestic industry as a result of elimination / reduction of customs duty under the Trade Agreement; Director General shall recommend bilateral safeguard measure for a particular duration which if adopted, would be adequate to prevent or remedy the serious injury; On receipt of recommendations of Director General, the Central Govt. may suspend further reduction of customs duty rate on originating good provided for in the Trade Agreement / increase the customs duty rate to a level not to exceed the lesser of – (i) the Most Favoured Nation applied customs duty rate on originating good in effect on the day when bilateral safeguard measure is taken; or (ii) the Most Favoured Nation applied duty rate on the day immediately preceding date of entry into force of Trade Agreement; Bilateral safeguard measure shall not exceed a period of 3 years from date of its imposition, provided that in highly exceptional circumstances, Central Govt. may extend said period on recommendation of Director General : Finance Ministry Notification

 

SC to decide characterization of State tourism corporation’s income from franchised properties

SC admits assessee’s (a Govt. undertaking engaged in tourism activities) SLP against Madras HC judgement  for AY 2005-06; HC had ruled that assessee’s income from leasing hotel units to franchisee was assessable as ‘business income’ and not ‘income from house property’; HC had observed that assessee gave special right / privilege to franchisees / lessees to undertake a particular business in assessee’s property on receipt of franchisee fee and thus income was in nature of business; HC had further observed that as per contract between assessee & franchisees, assessee continued to be in business of tourism activities, though not directly, but through franchisees and received income as franchisee fee , also  assessee did not treat the let out properties as non-business assets which revealed assessee’s intention to earn business income; Granting assessee leave to appeal, SC states “hearing expedited.”: SC

SC : Service-tax applicable on ‘service’ component in retreading of tyres, not gross consideration

SC holds that in a contract for retreading of tyres, service tax is payable only on service component and not on entire gross value, accordingly assessee is liable to pay on 30% of retreading charges as quantified under the State Act; Referring to Section 67 of Finance Act which deals with valuation of taxable services for charging service tax, Notification No.12/2003-ST and CBEC Circular dated April 7, 2004, SC states that costs of parts or other material, if any, sold (deemed to be sold) to the customer while providing maintenance or repair service is specifically excluded; Rejects majority view of the CESTAT that in retreading of tyre, there is no sale or deemed sale of the parts or other materials used in the execution of the contract of repairs and maintenance and hence, entire gross value is liable to service tax; Also rejects Revenue contention that there is no evidence forthcoming from the side of the assessee that the value of the goods or the parts used in the contract and sold to the customer constitute 70% of the value of the service rendered; States that no dispute has been raised with regard to the assessment of assessee on its turnover under the local/State Act, insofar as payment of VAT on that 70% component is concerned : SC

ITAT : No-balls Revenue’s “PMS” googly on Tendulkar; Share trading not ‘business’ income

Mumbai ITAT dismisses Revenue’s appeal in case of Sachin Tendulkar (‘assessee’) for AY 2010-11, holds that income on sale of shares and mutual funds is taxable under the head of “capital gains” and not “business income”; Revenue treated gains arising on sale of shares as ‘business income’  on the ground that assessee had engaged the services of Portfolio Managers (‘PM’) for which a huge amount of PMS charges (i.e. Rs.52 lakhs) were paid by the assessee; ITAT notes that assessee’s major income constituted of income from sports endorsement and that entire investment in shares was made out of his own funds, also notes that investment in shares with PM was merely to the extent of 4.8% of assessee’s total investments; Further notes that assessee had always disclosed amounts invested in shares under the head of ‘investments’ and it wasn’t AO’s case that shares were purchased/ sold on daily basis, without taking delivery; Perusing CBDT Circular No.6 of 2016 (dated Feb 29, 2016) and Circular No.4/2007 (dated June 15, 2007), ITAT holds that initial choice of characterization of share portfolio as investment or stock in trade lies with assessee and the AO does not have liberty to thrust his opinion upon the assessee, so long as the assessee follows his choice on consistent basis :ITAT

HC : Furnishing of CST Forms not mandatory for processing refunds under DVAT law

Delhi HC holds that furnishing of statutory forms under the CST Act in terms of Section 38(7)(c) and (d) of DVAT Act is not a mandatory requirement for processing refund claims by Authorities, states that such requirement cannot disrupt or suspend the time frame of 1-2 months stipulated u/s 38(3) for said purpose; Nowhere in the above sections is it stated that the original paper declarations in CST Forms are to be furnished, states HC while emphasizing that Revenue should examine the claims in terms of the local law, i.e, DVAT Act and Rules thereunder; Observes that even though the amendment to Section 38(7) was made in June 2012, within 3 weeks, a statutory Notification followed by Circulars was issued advising all dealers to furnish requisite details online and to not file the original copies thereof, hence Revenue cannot take the stand that refund claims cannot be said to be complete in case any amounts are due and owed under CST regime; Refuses to review earlier decisions in Prime Papers & Packers and Swarn Darshan Impex wherein it was held that for the period beyond what is stipulated u/s 38(3), Revenue would be under an obligation to pay interest till the claim is adjudicated and allowed; However states that if for any reason, during the processing of refund claim (but after the 2 month period), the assessee is called upon to furnish particulars relating to any inter-state transactions for the purposes of verification of any of the Central forms, that time would stand excluded : Delhi HC

 

Time to View you Tax Credit (TDS) in Form 26AS.

How to view your TDS through form 26AS?

A taxpayer can view the tax credit or the tax that has been deducted on his behalf in the form of TDS. This information is available in Form 26AS and can be downloaded from the Income Tax website. It provides information about the tax deducted by various entities on behalf of the taxpayer.

Clarification on Filing of SLPs/Appeals – CBDT

CIRCULAR NO. 5/2017

FTS No. 279157/ITJ

Government of India

Ministry of Finance

Central Board of Direct Taxes

 

New Delhi, Dated 23rd January, 2017

TDS Return Filing Due Dates Extended for 5 Years with Penalty Rs. 5000 – CBDT

Due Dates of Filing Quarterly TDS Statement in Form 24Q has been extended for 5 years & penalty also increased from 2000 to 5000 by CBDT vide circular No. F.No. 275/192/2016-IT (B) dated 24th January, 2017.

Analysis of recent amendment of POEM

We know that a new concept was introduced by the Finance Act, 2015 for determining the residential status of company incorporated in foreign jurisdiction [“Foreign company”], namely Place Of Effective Management [POEM] by substituting the section 6(3) of Income Tax Act, 1961[“Act”]. Accordingly a foreign company would be resident in India in any previous year if its POEM in that year is in India. There were no guidelines to determine the POEM under the Act. Hence, now CBDT has issued a circular No. 6 of 2017, dated 24.01.2017 under the subject Guiding Principles for determination of Place of Effective Management (POEM) of a Company [hereunder “Guidelines”]in this regard.