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www.caonline.in News 1.Levy of tax on open space termed as “banquet halls” providing only accommodation or space for marriages/receptions in terms of section 2(c) in the manner stated under section 2(k) of the Haryana Tax on Luxuries Act, 2007. The validity of the same is upheld and the petition is dismissed. - HC. [M/s Laxmi Sadan, Sector 19, Rewari vs State of Haryana and others - 2016 (2) TMI 550 - PUNJAB AND HARYANA HIGH COURT] 2.Denial of benefit of CENVAT Credit on xerox copy of courier bill of entry, appellant have correctly claimed the CENVAT Credit on the photocopy of the courier bill of entry filed by them and CENVAT Credit cannot be denied on mere technical grounds - Tri.[Arbes Tools Pvt. Ltd. vs Commissioner of Central Excise, Mumbai-II - 2016 (2) TMI 555 - CESTAT MUMBAI] 3.All the services provided by the Government or local authority to a business entity, except the services that are specifically exempted, or covered by any another entry in the Negative List, shall b...

The Securities and Exchange Board of India ( Sebi) has restrained 22 entities, mostly brokers, from the securities market for allegedly making illicit gain through manipulation of liquid stocks options. Sebi found these entities putting through ‘ reversal trades’ in the stock options segment. The manipulation typically took in deep in- themoney and out- of- the- money options on individual stocks that were thinly traded. In fact, 70- 100 per cent of the volumes in these counters were by the alleged manipulators, it said. According to Sebi, entities through reversal trades generated atotal loss of Rs.1,273 crore and total profit of Rs.1,303 crore. “ These brokers have, prima facie, facilitated their clients to use and employ a pre- meditated manipulative device or contrivance while dealing in the market, a... nongenuine and deceptive transaction,” said Rajeev Kumar Agarwal, member of Sebi, in an order. Some of the entities barred are Giriraj Stock Broking, Best Bull Stock Tradin...

FinMin officials say an announcement could be made in the Budget The Centre is likely to set up a “ bad bank” to take over the non- performing assets (NPAs) of the country’s financial institutions, and is examining a policy proposal paper on the matter. As such, the setting up of an asset reconstruction company backed by the sovereign is a long- drawn process and these are still early days. Even then, senior government sources say Finance Minister Arun Jaitley might make an announcement in the upcoming Union Budget as part of his medium- term plans for the financial sector. There have been inter- ministerial discussions on the matter. Earlier in February, Reserve Bank of India ( RBI) Governor Rajan had said there was “ no need” to set up a separate “ bad bank” to deal with stressed assets of public sector ( PSU) banks. “ PSU banks themselves have the backing of the government, so there is no need to create a new entity that has the backing of the government. The issue is now to...

Various instances of client code changes by stock brokers between 2009 and 2011 has caught the attention of the income-tax department. A few brokers in Mumbai, Delhi, Gujarat and Rajasthan have got notices from the I-T department in January and February seeking details of changes to client codes in their system in the past few years mainly for assessment year 2010-2011. Changing client codes within 30 minutes after the market closed to rectify any punching errors was a common practice in markets. However, the I-T department feels the practice was turning into a scheme to avoid paying taxes as client code modifications constituted a staggering Rs.56,000 crore worth of trade ev` ery month. Tax officials believe that gains and losses were transferred from one account to another un der the guise of rectifying errors. The I-T department is seeking details like the transaction ID original client code, modified client code, name of the origi nal client, PAN of the original client, nam...

Updates Of the Day 1.The petitioner is admittedly not a foreign company : Since the petitioner is not an eligible assessee in terms of section 144C(15)(b), no draft order can be passed in the case of the petitioner u/s 144C(1) - HC. [Honda Cars India Limited (Formerly – M/s. Honda Siel Cars India Limited vs Deputy Commissioner of Income Tax & Another - 2016 (2) TMI 527 - Delhi High Court]. 2.Manufacture of rosin and turpentine without aid of power , seeking retrospective exemption is not a constitutional right - HC. [Mangalam Organics Limited vs Union of India - 2016 (2) TMI 529 - Delhi High Court]. 3.Supply Of Goods to Indian Navy not must to claim excise exemption. [CCEx vs. M/s Wartsila (I) Pvt. Ltd]. 4.Proceedings under rule declared unconstitutional by HC in invalid. [Vipul-S Plasticrafts P. Ltd. vs. Commissioner of Central Excise]. 5.Cenvat of Goods/ Service used in construction of rented property allowed. [Nirlon Ltd. vs. Commissioner of Central Excise,Mumbai]. 6.Bro...

The WTO agreement aims to simplify customs regulations for the cross-border movement of goods The Union cabinet on Wednesday approved a proposal to ratify the Trade Facilitation Agreement (TFA) of the World Trade Organization, which aims to simplify customs regulations for the cro-ss-border movement of goods. To facilitate both domestic coordination and implementation of the TFA provisions, a National Committee on Trade Facilitation will be set up; it will be jointly headed by the commerce and revenue secretaries. The TFA contains provisions to speed up the movement, release and clearance of goods, including goods in transit. It also sets out measures for effective cooperation between customs and other appropriate authorities on trade facilitation and customs compliance issues. “These objectives are in consonance with India’s ‘ease of doing business’ initiative,” a cabinet statement said. The provisions that each country needs to implement have been divided into three categ...

In what could slow down dollar inflow into the country, infrastructure and asset finance companies -including large state-owned firms like Rural Electrification Company, Power Finance Corp and Indian Railway Finance Corp -are unable to raise dollar loans, with new rules on external commercial borrowings (ECB) imposing certain restrictions. These companies, categorised as nonbanking financial companies (NBFCs) in the revised ECB framework, can only raise foreign currency loans which are denominated in rupees. In such loans, lenders take the foreign currency risk -unlike the customary dollar loans where the risk arising out of exchange rate fluctuation lies with borrowers. But, under the current circumstances, where the market has turned volatile and the local currency is depreciating, these companies are finding it impossible to raise rupee-denominated ECB.And, even if they can, the pricing of such borrowings would be prohibitive. Since the beginning of 2016, a little less than ...

Experts say move to raise period from one to three years could scare markets The already- nervous Street has a new reason to lose sleep. The plan proposed by the government to increase the time frame of long- term capital gains tax from one year to three years has made the stock market investors nervous in the run- up to the Union Budget. Capital gains are the profits that an investor realises when he sells a stock. Long- term capital gains tax is a levy on those gains.Currently, investors dont have to pay any capital gains tax on shares sold on an exchange after one year of holding. The move to increase the holding period to three years would force investors to hold on to their stocks, hurt sentiment, and lead to a crash in the market, say experts. Benchmark indices are already down 10 per cent this year following a rout in the global markets. Sudip Bandyopadhyay, managing director and chief executive, Destimoney Securities, believes such a move would be "disastrous"...

The upcoming Budget for 2016-17 would focus on tax rationalisation and simplification besides providing a level-playing field to domestic manufacturers to facilitate Make in India, hinted revenue secretary Hasmukh Adhia on Wednesday. With a fortnight to go for finance minister Arun Jaitley to present the Budget, Adhia said the focus should be on promoting growth and employment. "The focus of the Budget should be on tax rationalisation and simplification. …promoting growth, employment and providing some sort of level-playing field to domestic manufacturers so that the Make In India can happen," Adhia said in the finance ministry's YouTube video. On the need for phasing out of corporate tax exemptions, which cost the exchequer about Rs 2 lakh crore annually, Adhia said the move was necessary to provide a level-playing field to domestic manufacturing companies even though completely eliminating those was not possible. "Exemptions create inequity, between the e...

Updates Of the Day 1.Last date for submission of online application form for empanelment with O/o C&AG for the year 2016-2017 for audit of PSUs is extended to 22.02.2016. 2.MCA invites comments on The Draft Companies (Accounting Standards) & (Indian Accounting Standards) Amendment Rules 2016 to be submitted latest by 01.03.2016. 3.CBEC makes it mandatory for RBI and Electricity Board to file Annual Information Return. Notification no. 04/2016 dated 15.02.2016. 4.New appeal filing monetary limit shall apply to pending appeals also.[ITO vs. Smt. Sudha Brijratan Damani (ITAT Mumbai), I.T.A. No. 6952/Mum/2013]. 5.WIP Valuation on receipt basis is forbidden in Mercantile Accounting. [The ACIT vs. M/s. Ambarwadikar & Co., Engineers & Contractors (ITAT Pune), ITA Nos.169 to 171/PN/2006 & C.O.No.27/PN/2010]. 6.Sec. 172 : No TDS on payment to Non–Resident shipping companies. [CIT vs. V.S. Dempo & Co. Pvt. Ltd. (Bombay High Court), Income Tax Appeal Nos. 989, 991,...

Updates Of the Day 1.ST applies on C&F Agent Services despite non clearing from factory. [Somani Agencies vs. CCE & ST, Indore; (CESTAT-New Delhi); Final Order No. 50085/2016] 2.Non-Tax Receipt Portal : Platform for making online payment of non-tax receipts by citizens / corporate / others inaugurated by Ministry of Finance on 15.2.16. 3.Excess Cenvat due to calculation mistake is not wrong availment .[M/s. TNT (INDIA) PVT LTD vs Commissioner of Central Excise and Service Tax BANGALORE-III; (CESTAT- Bangalore); Final Order No. 22133 / 2015] 4.Penalty u/s 271AAA is not tenable where no search was conducted. [DCIT vs. M/s. Sam India Abhimanyu Housing (ITAT Delhi), ITA No.1257/ Del./ 2015, AY 2011-12] 5.Non TDS deduction disallowance is not sustainable if payee discharges his tax liability.[ Kurian Ulahannan Moothukuzhiyil vs. ITO (ITAT Ahmedabad), I.T.A. No. 2524 / Ahd /2014, AY 2010-11] 6.Section 80IB(10) : Deduction allowed on additional business declared post search.[M...