 ISS UE 43 |  VO LUM E : M AY |  YE AR : 2019

Aarvi Solutions
Economic
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AD D RE S S I N G T HE N E E D S O F P R OFE S S I O N AL S AN D B UI LDI N G

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FU T U RE NE X US

INCOME TAX & TDS

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Excise duty rightly excluded
from value of closing stock
as no goods were cleared
No reassessment after 4
years in absence of any
failure on part of assessee

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from factory to disclose material facts
Where no excise duty, etc., were Where assessee-builder claimed
added to purchases, sales or proportionate deduction under
valuation of inventories and no section 80-IB(10) in respect of
excisable item of closing stock those residential units only
was removed from factory which had area less than 1500
premises till end of accounting sq. ft. and Assessing Officer
year, following net method of after conscious application of

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valuation of closing stock, excise mind allowed same,
duty had rightly been excluded reassessment after 4 years
from value of closing stock of would be impermissible
finished goods at year end

No taxes to be withheld from cost apportioned by foreign AE which has no profit element: Kolkata ITAT
Where Netherland based Associated Enterprise had purchased Software on licence from a company (Microsoft) for use
by all its Group entities and licence fees paid by it for software to Microsoft was apportioned at actual to all Group
entities including assessee-company and share of assessee was worked out which was reimbursed to AE of Netherland
on basis of actuals, there was no element of profit involved in transactions representing remittance made towards
purchase of licenced software for use by assessee, which was taxable in India in hands of Associated Enterprise and
assessee, therefore, was not required to deduct tax at source from said payment under section 195. Further, said amount
would have been assessable as business profits in hands of Netherland based Associated Enterprise and since said
Associated Enterprise did not have a permanent establishment in India, business profits could not be taxed in India
under article 7 of Indo-Netherland DTAA.
SC dismissed SLP against ruling allowing set off of dep. pertaining to years before 2001-02 in excess of
8 years
SLP dismissed against order of High Court allowing assessee to carry forward and set off unabsorbed depreciation of
assessment years 1997-98 to 1999-2000 against profits of assessment year 2008-09
 GOODS AND SERVICE TAX
Seller booked for profiteering by increasing base price of ‘suitcases’ despite GST
rate reduction
Where applicant filed application before Anti-Profiteering Authority alleging profiteering by
respondent on supply of 'luggage trolly bag/suitcases', namely 'Tropic 45 Weekender Black'
and 'Neolite Strolly 53 360(VIP) FIR', as benefit of reduction in rate of tax of GST with effect
from 15-11-2017 had not been passed on by respondent to recipients, it was held that
respondent had increased base prices of its products with effect from 15-11-2017 despite
reduction in rate of GST from 28 per cent to 18 per cent and, therefore, respondent acted in
contravention of provisions of section 171 in as much as it did not pass on benefit of reduction
in rate of tax to its recipients by way of commensurate reduction in prices

Builder guilty of profiteering for not passing on additional ITC benefit to buyers
post GST implementation
Where builder had denied benefit of ITC to buyers of flats being constructed and thus realized
more price from them compelling them to pay more GST by issuing incorrect tax invoices; he
would be liable for profiteering

Authorities to inform HC about status of application filed to State & Centre tax
authorities to claim pre-GST credit
Where assessee pursuant to order of High Court had made applications for allowing credit of
central excise and VAT under FORM GST TRAN-1 to both State Tax Authorities as well as
Central Tax Authorities and there was a dispute inter-se between State and Centre as to who
was required to process such application, GST Authorities were directed to inform Court on
next date of hearing about status of assessee's application.

Until & unless amount of excess GST credit taken by assessee has not been
quantified, punishment cannot be imposed
Power to punish set out in section 132 of the CGST Act would stand triggered only once it is
established that an assessee has 'committed' an offence that has to necessarily be post-
determination of demand due from an assessee, that itself has to necessarily follow process
of an assessment

OTHER ECONOMIC UPDATES

Process of grant of registration u/s 12A
Registration under section 12A is an entry document to secure exemption from income tax. The
Commissioner of Income tax (Exemptions) himself shall process the applications for
registration under section 12A.

Oriental Insurance Company is not dominant in market for fire insurance Contact Us:
services: CCI
Where market for general insurance/non-life insurance is competitive with presence of about [email protected]
25 general insurers and all non-life insurance companies offer fire insurance policies and in
+91- 95825 45001
terms of gross premium earned from fire segment of non-life insurance, OP i.e. Oriental
Insurance Co., enjoyed a market share of about 10.1 per cent during 2016-17, which declined to
about 8.6 per cent during 2017-18, OP was not in a position of dominance in relevant market
for provision of fire insurance services in India and, therefore, no case of contravention of
provision of section 4 was made out

Director’s DIN to be marked as ‘Director of ACTIVE non-compliant co.’ on his

failure to file Co.’s KYC
The Ministry of Corporate Affairs (MCA) has amended the Companies (Appointment and
Qualification of Directors) Rule, 2014 wherein new rule 12 B has been inserted. The amendment You can Follow us on below
emphasis to file the ACTIVE e-form otherwise the existing director’s DIN will be marked as
mentioned link for Regular GST
Director of ACTIVE non-compliant company’.
and Income Tax Cases and GST
Corporate Insolvency Process admitted when corporate debtor defaulted in
paying acknowledged debt Notifications and circulars
Where corporate debtor received material shipped by operational creditor and acknowledged
amount due, but defaulted in paying same even after arriving at an settlement arrangement,
CIRP was to be initiated against corporate debtor https://www.facebook.com/group

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