proxcel advisory services private limited · 2019-12-05 · i.e. pan and aadhaar are being made...

Tax Newsletter December, 2019 Proxcel Advisory Services Private Limited

TAX NEWSLETTER Summary of Regulatory Updates for November 2019

ProXcel Advisory Services Private Limited

Delivering Professional Excellence

Inside this Update

1. Direct Tax

2. Indirect Tax

3. Companies Act, 2013

4. Securities and Exchange Board of India (SEBI)

5. Understanding and Valuing Contingent Consideration

6. Income Tax Case Law

7. About us

Edition: December 2019 Volume 1, Issue 11

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1.1 Order under Section 119 of Income Tax Act, 1961 On considerations of disturbances in internet facilities in certain

areas of Jammu and Kashmir, CBDT in exercise of powers con-

ferred under section 119 of Income Tax Act, 1961 hereby extends

the due date for filing of Income Tax Returns/ Tax Audit reports

to 30th November, 2019 in respect of all categories of Income tax

assesses in UT of Jammu and Kashmir and Ladakh who are re-

quired to file Income tax Returns/Tax Audit reports by due date

specified under Section 139(1)

1.2 Substitution of the words “the Union territory of Jammu

and Kashmir and the Union territory of Ladakh” for the

words “State of Jammu and Kashmir”

The CBDT vide various notification has substituted the words “the

Union territory of Jammu and Kashmir and the Union territory of

Ladakh” for the words “State of Jammu and Kashmir” used in ear-

lier principal Notifications.

Note:

These notifications shall be deemed to have come into force

with effect from the 31st day of October, 2019.

It is hereby certified that no person is being adversely affected

by giving retrospective effect to these notification.

_Notification No. 88/2019, Notification No. 89/2019,

Notification No. 90/2019, Notification No. 91/2019, Notifica-

tion No. 92/2019, Notification No. 93/2019 and Notification

No. 94/2019 dated 05-Nov-2019

1.3 Income-tax (12th Amendment) Rules, 2019

CBDT in exercise of powers conferred under Section 139A, has

substituted Appendix-II of the Income-tax Rules, 1962. For the

words “Permanent Account Number”, wherever they occur, the

words “Permanent Account Number or Aadhaar Number” shall be

substituted in various forms required to file under Income Tax Act

i.e. PAN and Aadhaar are being made Interchangeable for the ease

of Tax-payers.

Note:

These rules shall be deemed to have come into force from the

1st day of September, 2019.

It is hereby certified that no person is being adversely affected

by giving retrospective effect to these amendment rules Condi-

tions:

__Notification_95/2019 dated 11th November, 2019

1.4 Income tax Amendment (13th Amendment) Rules, 2019

In the Income-tax Rules, 1962, Rule 11UAC shall be inserted from

the 1st April, 2020 and shall be applicable for assessment year 20-21

and onwards:—

Rule 11UAC provides that the provisions of clause (x) of Sec-

tion 56(2) shall not apply to any immovable property, being

land or building or both, received by a resident of an unau-

thorized colony in the National Capital Territory of Delhi, where

the Central Government by notification in the Official Gazettee,

regularized the transactions of such immovable property based on

the latest Power of Attorney, Agreement to Sale, Will, possession

letter and other documents including documents evidencing pay-

ment of consideration for conferring or recognizing right of own-

ership or transfer or mortgage in regard to such immovable proper-

ty in favour of such resident.

For the purposes of this rule:-

“Resident” means a person having physical possession of proper-

ty on the basis of a registered sale deed or latest set of Power of

Attorney, Agreement to Sale, Will, possession letter and other doc-

uments including documents evidencing payment of consideration

in respect of a property in unauthorized colonies and includes their

legal heirs but does not include tenant, licensee or permissive user.

“Unauthorized colony” means a colony or development compris-

ing of a contiguous area, where no permission has been obtained

for approval of layout plan or building plans and has been identi-

fied for regularization of such colony in pursuance to the notifica-

tion number S.O. 683(E), dated the 24th March, 2008, of the Delhi

Development Authority, published in the Gazette of India, Ex-

traordinary, Part-II, Section 3, Sub-section (ii), dated the 24th

March, 2008.

_Notification_96/2019 dated 11th November, 2019

1. Direct Tax

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1.5 Income tax Amendment (14th Amendment) Rules,

2019

In the Income Tax Rules, relevant rules shall be inserted in

respect of making the below mentioned provisions applica-

ble:

Due Date for deposit of TDS under section 194M will be 30

days from the end of the month in which TDS has been de-

ducted.

Every Person responsible for deducting tax under Section

194M shall furnish the certificate of deduction of tax at

source in Form No. 16D to the payee within 15 days from

the due date for furnishing the challan-cum-statement in

Form No.26QD.

Need to furnish particulars of amount paid or credited on

which tax was not deducted in view of the exemption pro-

vided in clause (iii) or clause (iv) of the proviso to section

194N or in view of the notification issued under clause (v) of

the proviso to section 194N

Any Person responsible for deducting tax under Section

194M shall furnish a challan-cum-statement in Form 26QD

shall be furnished electronically within 30 days from the end

of the month in which the deduction is made.

1.6 Prohibition of Benami Property Transactions (1st

Amendment), Rules, 2019.

Any person aggrieved by an order passed by the authority under

section 54A may prefer an appeal in Form 3 along with such fees

of an amount of two thousand rupees to the Appellate Tribunal

against the said order within a period of forty-five days from the

date of that order

Where the appeal is preferred after the expiry of the period

of forty-five days as referred above, it shall be accompanied

by a petition, in quadruplicate, duly verified and supported

by the documents, if any, relied upon by the appellant,

showing cause as to how the appellant had been prevented

from preferring the appeal within the period of forty-five

days.

1.7 Press Release on Section 90 of Income Tax Act,

1961

The Union Cabinet has approved the signing of the Double

Taxation Avoidance Agreement (DTAA) and Protocol be-

tween the Republic of India and the Republic of Chile for

the elimination of double taxation and the prevention of

fiscal evasion and avoidance with respect to taxes on in-

come.

Circulars:-

2.1 Generation and quoting of DIN on any communica-

tion issued by CBIC officers to tax payers:-

For bringing more transparency and accountability, CBIC is im-

plementing a system of Generation and quoting of DIN on any

communication issued by CBIC officers to tax payers and other

concerned persons.

The Board directs that on or after 8th November, 2019, no

search authorization, summons, arrest memo, inspection notices

and letters issued in course of any enquiry shall be issued by an

officer without a computer generated DIN being duly quoted

prominently in body of such communication.

Portal for generation of DIN- “cbicddm.gov.in”

In Exceptional circumstances given below, communications may

be issued without an auto generated DIN after recording the rea-

sons in writing:

Due to technical difficulties.

When communication regarding investigation/ Inquiry, etc.

is to be issued at short notice and authorized officer is out-

side the office.

The Board also directs that communication without DIN shall be

treated as Invalid and deemed to have never been issued. Any

communication issued without such DIN in the exigencies shall

be regularized within 15 days of its issuance.

Officers shall be firstly added as users in DIN utility and then can

generated DINs electronically.

The genuineness of the communication can be ascertained by

public by entering the CBIC-DIN for that communication in a

window-verify CBIC-DIN on CBIC’s website (www.cbic.gov.in).

Only if DIN entered is valid, information about the communica-

tion will be displayed.

The first phase of DIN generation will begin on 8th Day of No-

vember, 2019. Further the format of DIN shall be CBIC-YYYY

MM ZCDR NNNNNN.

YYYY- Denotes calendar year in which DIN is generated

MM- Denotes calendar month in which DIN is generated

ZCDR- Denotes Zone-Commissionerate-Division-Range Code of Directorate of authorized user generating the DIN

NNNNNN- Alpha-numeric system generated random num-ber.

2. Indirect Tax


2.2 restrictions on conditions to claim ITC not reflecting in GSTR-2A:-

Central Government inserted new rule 36(4) in CGST rules, 2017, through notification no. 49/2019-Central tax, to restrict the claim of ITC by taxpayers which is not reflecting in GSTR-2A, in cases where the relevant invoices are not uploaded by the vendors in their respective GSTR-1. The taxpayer shall be eligi-ble to claim 120% of the eligible ITC reflecting in GSTR-2A as uploaded by the vendors in their respective GSTR-1. This rule shall be applicable from 9th October, 2019 onwards. To clarify the various issues regarding the notification no. 49/2019 dated October 9, 2019 Central Government has issued circular no. 123/2019 dated ….which states that the taxpayer shall not avail input in excess of 20% of the eligible credit avail-able in GSTR-2A over and above the eligible credit. Due to this, taxpayers has to monthly reconcile their Input tax credit with the eligible input reflecting in GSTR-2A by keeping in mind the below mentioned points:

The restriction of availing of ITC is only applicable on those invoices/debit notes which are required to be upload-ed by the supplier in GSTR-1,so the taxpayer can avail ITC on IGST paid on imports, documents issued under RCM, credit received from ISD without any restrictions;

The restriction on ITC is applicable only on the invoices /debit notes on which credit is availed after October 9, 2019. So the taxpayers must, before filing the GSTR-3B for the month of Oct’19, reconcile the ITC with the ITC available in GSTR-2A;

The restriction on ITC imposed is not to be calculated sup-plier wise but on total eligible credit from all the suppliers against all the supplies whose details has been uploaded by suppliers.

The calculation will be on the basis of invoice which are eligible for ITC. According to this, ITC falling under the category blocked and ineligible credits GSTR-2A shall not be considered for calculating 120% of the eligible credit in GSTR-2A;

The rule restricts ITC claim beyond 120% of eligible ITC forming part of GSTR-2A;

_Circular No 123/2019 dated 11-11-2019

2.3 Extension of Due date of GST Returns for registered persons whose principal place of business is in the State of Jammu and Kashmir:-

_Notification No. 52/2019, Notification No. 53/2019, Notifica-tion No. 54/2019 and Notification No. 55/2019 – Central Tax dated 14-11-2019

2.4 Central Goods and Services Tax (Eighth Removal of Difficulties) Order, 2019

CBIC has extended the last date for furnishing of annual return/

reconciliation statement in FORM GSTR-9/FORM GSTR-9C

due to technical difficulties faced in filing of such Forms. The

extended dates are provided in the below mentioned table:

_Order No. 08/2019-Central Tax dated 14-11-2019

2.5 Central Goods and Services Tax (Seventh Amend-ment) Rules, 2019

CBIC vide Notification No. 56/2019 dated 14th November, 2019

has made relevant changes in Form GSTR-9(Annual Return) and

Form GSTR-9C (Reconciliation Statement). The part or table

headings, field names and instructions have been amended to make

the forms suitable for FY 17-18 and also for FY 2018-19, which

are as follows:

1. Table 4 & 5-Turnovers

In case the registered person is unable to split the details as original

amounts declared and adjustments made (credit/debit notes, up/

downward amendments), they can fill the net values in respective

fields.

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Financial Year Due date

2017-2018

31st December, 2019

2018-2019 31st March, 2020

Re-turns

Turnover (in the preceding or the current financial year)

Period Extended due

date

GSTR-1

Upto 1.5 Cr. Rs.

For quarter of July-September, 2019

Till 30th November, 2019

GSTR-1

> than 1.5 Cr. Rs.

For the month of July, August and September

Till 15th No-vember, 2019

GSTR-3B

_ For the month of July, August and September

On or before 20th No-vember, 2019

GSTR-7

_ For the month of July, August and September

On or before 15th Novem-ber, 2019


2. Table 5D, E &F-Exempted /Nil-Rated/ Non-GST

If the registered person is unable to split the details among Ex-

empted, Nil –Rated and Non-GST supplies, entire amount can be

disclosed under 5D-‘Exempted’.

3. Table 6-Input Bifurcation

If the registered person is unable to split the total credit as In-

puts/Input Services/Capital Goods, then the entire amount can

be disclosed as ‘Inputs’ in respective tables.

4. Table 6C & 6D-RCM on supplies from Registered & Un-

registered

If the registered person is unable to split the details between

RCM credit related to Inward supplies from Registered persons

and unregistered persons, then the entire amount can be dis-

closed in 6D i.e. RCM on inward supplies from registered per-

sons.

5. Table 7A to 7E: ITC reversals under different categories

If the registered person is unable to split the amount of credit

reversals as per the given tables, entire amount can be disclosed

as other reversals.

However, Tran-1 and Tran-2 related reversals should be dis-

closed in the Tables i.e. 7F & 7G.

6. Table 8: GSTR-2A reconciliation

For FY 17-18 and FY 18-19, the details of the amount speci-

fied /differences observed can be attached in PDF format as

part of GSTR-9C. No CA signature required for this.

7. For FY 17-18 and FY 18-19, following tables made option-

al

Table 12 & 13- ITC adjustments for current year in next FY.

Table 15- Particulars of Demands and refunds.

Table 16-Supplies from Composition / Deemed supplies /

Deemed supplies under section 143.

Table 17 & 18-HSN wise summary for Outward and Inward

supplies.

Changes made in GSTR-9C

Simplification for FY 17-18 and FY 18-19:

For FY 17-18 and FY 18-19, following tables were made

optional

Table 5B to 5O: Reconciliation of Gross Turnover.

Table 12B & 12C: Reconciliation of Net ITC.

Table 14: Reconciliation of expenses wise ITC total to GSTR

-9.

The changes in Table 5 & 12 seems to defeat the basic purpose of

GSTR-9C. Though it is made optional, if the unreconciled/

unexplained differences are high, the probability of receiving the

enquiries from the department would be high.

Hence, it is suggested to disclose proper reconciliations in GSTR-

9C unless the other option is beneficial.

Changes in Part-B-Certification

Para 1C-Cash Flow Statement-Made optional, registered per-

son to upload the same, only if the same is available.

Para 5-Expression of Opinion-The wordings have been

changed from ‘True and correct’ to ‘True and Fair’.

_Notification No. 56/2019-Central Tax dated 14-11-2019

Note:- The changes in the application software and the offline tools are likely to be made available by 10th December 2019.

3.1 Companies (Meeting of its Board and its Powers) Sec-ond Amendment Rules, 2019

Ministry of Corporate Affairs (MCA) vide its Notification dated 18th November, 2019 has introduced the Companies (Meeting of Board and its Powers) Second Amendment Rules, 2019. The limits as prescribed in Rule 15 for transactions with the Related parties have been revisited by MCA vide these Amendment Rules. Key highlights of the Amendment:

In case of limit for sale, purchase or supply of any goods or material directly or through any agent, the cap of Rs. 100 crores has been removed

In case of limit for selling or disposing or buying property of any kind directly or through any agent, the cap of Rs. 100 crores has been removed

In case of leasing of property of any kind, the cap of ten per cent or more of the net worth of the company or Rs. 100 crores has been removed

In case of availing or rendering of any services, directly or through any agent, the cap of Rs. 50 crores has been removed.

3.2 Extension of last date of filing of Form NFRA-2

MCA vide its Circular dated November 27, 2019 has extended the

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3. Companies Act, 2013


fore November 30, 2019) will be 90 days from the date of deploy-

ment of this form on the website of National Financial Reporting

Authority (NFRA).

3.3 Extension of due date of filing of Form AOC-4 and MGT-7 for companies having jurisdiction in the UT of J&K and UT of Ladakh MCA vide its Circular dated November 28, 2019 has extended the due date for filing of Form AOC-4, AOC-4 (CFS), AOC-4 XBRL and MGT-7 till January 31, 2020 for companies having jurisdiction in the UT of J&K and UT of Ladakh.

3.4 Extension of last date for filing of Form PAS-6 MCA vide its Circular dated November 28, 2019 has provided that the time limit for filing of Form PAS-6 for the half year ended on September 30, 2019 will be 60 days from the deployment of the said Form on the website of Ministry of Corporate Affairs.

4.1 Enhanced Due Diligence for Dematerialization of physical securities

SEBI vide its Circular dated November 5, 2019 has directed the Depositories and the listed companies/ RTAs to implement the following due diligence process in processing dematerialization request in respect of the remaining physical shares:

Listed Companies/ RTAs are required to provide data of their members holding shares in physical mode as on March 31, 2019 to the Depositories latest by December 31, 2019.

Depositories shall capture the relevant details from the static database and put in place systems to validate any dematerializa-tion request received after December 31, 2019.

In case of mismatch of name on the share certificate(s) vis-à-vis name of the beneficial owner of demat account, the deposi-tory system shall generate flag /alert and shall sought some additional documents (copy of passport, copy of legally recog-nized marriage certificate, copy of gazette notification regard-ing change in name and copy of aadhar card).

In the case of complete mismatch of name on the share certificate(s) vis-à-vis name of the beneficial owner of demat account, the applicant may approach the Issuer company / RTA for establishing his title / ownership.

4.2 Disclosures by listed entities of defaults on payment of interest/ repayment of principal amount on loans from banks / financial institutions and unlisted debt securities

SEBI vide its Circular dated November 21, 2019 has introduced Disclosure requirements for listed Companies which have listed specified securities (equity and convertible securities), NCDs and NCRPS and has defaulted in payment of interest/ instalment obli-gations on loans, including revolving facilities like cash credit from banks/ financial institutions and unlisted debt securities. ‘Default’ for the purpose of this circular shall mean non-payment of the interest or principal amount in full on the date when the debt has become due and payable (‘pre-agreed payment date’). For revolving facilities like cash credit, an entity would be considered to be in ‘default’ if the outstanding balance remains continuously in excess of the sanctioned limit or drawing power, whichever is low-er, for more than 30 days. Key highlights of the Circular are:

Listed entities shall make a disclosure of any default on loans including revolving facilities like cash credit, from banks/ fi-nancial institutions which continues beyond 30 days not later than 24 hours from 30th day of such default. In case of unlisted debt securities, disclosure shall be made promptly but not later

than 24 hours from the occurrence of the default.

Disclosure shall be made in the format as prescribed in the Circular.

The disclosures as applicable (including quarterly disclosures) shall be made beginning January 1, 2020.

6

4. Securities and Exchange Board of India


When negotiating the purchase price of a business, Contingent

Consideration is often used to bridge the price gap between

what the seller would like to receive and what the buyer would

like to pay. More generally, a portion of the purchase considera-

tion may be contingent on the outcome of future events. For

example, additional consideration may be paid if the acquired

business meets certain targets (such as future revenue, margin,

or profit targets), passes regulatory reviews, has successful liti-

gation outcomes, meets covenants, or completes product devel-

opment.

The valuation of Contingent Consideration is inherently chal-

lenging due to dependence on the occurrence of future events

and the often complex structure of the payoff functions. As

part of the initial recognition and measurement requirements

under Indian Accounting Standard (Ind AS) – Business Combi-

nations (Ind AS 103), Provisions, Contingent Liabilities and

Contingent Assets (Ind AS 37), Financial Instruments (Ind AS

109) and International Financial Reporting Standards (IFRS)

Standard 3 Business Combinations (Revised) (IFRS 3R), Con-

tingent Consideration included in a business combination must

be measured at fair value as of the acquisition date.

Above mentioned Standards define Contingent Consideration

as usually being an obligation of the acquirer to transfer addi-

tional assets or equity interests to the former owners of the ac-

quiree as part of the exchange for control of the acquiree if

specified future events occur or conditions are met (an

“Earnout”). However, Contingent Consideration also may give

the acquirer the right to claw back previously transferred con-

sideration if specified conditions are met (a “Clawback”).

Clawbacks

There are cases where the parties to a transaction will structure

the Contingent Consideration so that the buyer may be entitled

to a Clawback (or refund) of a portion of the initial purchase

consideration from the seller. In these cases, the buyer has es-

sentially taken out insurance that is payable by the seller if the

acquired business underperforms or to mitigate specific risks.

Clawbacks are therefore contingent assets to the buyer that re-

duce the fair value of the total purchase consideration.

In general, the valuation considerations for Clawbacks are the

same as for Earnouts. The valuation specialist should consider

the risk of and expectations for the underlying metric, the im-

pact of the Clawback payoff structure on risk (especially if the

structure is nonlinear), as well as any counterparty credit risk.

Valuation of Contingent Consideration

For valuing Contingent Consideration, the market approach is

rarely used due to the lack of an active trading market that pro-

vides reliable indications of value. The cost approach is also typ-

ically not appropriate, since typically there is no obvious way to

estimate a replacement cost and the cost approach does not

consider future expectations.

We observed two methods for valuing Contingent Considera-

tion commonly used by valuation specialists:

The Scenario-Based Method (SBM) is a method under which

the valuation specialist identifies multiple outcomes, probability

weights the Contingent Consideration payoff under each out-

come, and discounts the result at an appropriate rate to arrive at

the expected present value of the Contingent Consideration.

SBM is widely used for valuing Contingent Consideration when

the risk of the underlying metric is diversifiable, e.g., for

achievement of diversifiable nonfinancial milestones. SBM is

used when the payoff structure is linear (e.g., a fixed percentage

of revenues or EBITDA with no thresholds, caps, or path de-

pendencies such as carry-forwards, roll-backs or cumulative tar-

gets). We do not recommend the use of SBM for nonlinear pay-

off structures involving a Contingent Consideration metric with

non-diversifiable risk.

The Option Pricing Method (OPM) is used to value Contin-

gent Consideration for which the payoff structure is nonlinear

and involves a metric or event with non-diversifiable risk. The

payoff functions for common Contingent Consideration ar-

rangements that have a nonlinear structure are option-like (e.g.,

resemble calls, caps, collars, cash-or-nothing, asset-or-nothing,

etc. options) in that payments are triggered if certain thresholds

are met.

7

5. Understanding & Valuing Contingent Consideration

by Manuj Singhal (Director-Transaction Advisory Services)

& Apoorv Singhal (Manager-Transaction Advisory Services)


The essence of the OPM is to adjust the Contingent Considera-

tion metric forecast for risk, or to create a “risk-neutral” metric

forecast, by applying a risk-adjusting discount rate to the metric

forecast and then to evaluate the Contingent Consideration

payoff function using the risk-neutral framework. Once the

metric forecast has been adjusted for risk, the expected Contin-

gent Consideration payoff is calculated based on the risk-

neutral distribution (typically lognormal) of the metric, and dis-

counted at the risk-free rate plus any adjustment for counter-

party credit risk from the expected payment date(s) to the valu-

ation date. When a payment in one period is dependent on the

outcomes in other periods, one typically cannot model the pay-

ments independently. More complex techniques, the most com-

mon of which is a Monte Carlo simulation, are generally re-

quired.

Using a Binomial Lattice to Handle Buyer or Seller

Choices

Earnouts may be structured with the ability of the buyer or sell-

er to make decisions over the term of the Earnout that impact

its payoff. In these cases, a binomial tree (or more generally a

lattice or finite-difference technique) can be used to incorporate

optimal decisions into the Earnout valuation.

A binomial tree, whose branches represent potential future

metric paths, is constructed based on assumptions for future

volatility in a risk-neutral framework. That is, the risk-neutral

probability distribution of future metric outcomes is modeled at

successive time steps. The optimal decision feature can then be

incorporated by working backwards through the tree, from the

end of the Earnout term to the valuation date, by minimizing

(in the case of the buyer’s decision) or maximizing (in the case

of the seller’s decision) the expected present value of the pay-

off.

Valuing Earnouts that have both path-dependent and optimal

decision features generally requires the use of a Monte Carlo

simulation in conjunction with an algorithm to address the buy-

er or seller decision for each iteration of the simulation.

The Risk Associated with the Contingent Consideration

Payoff Structure

The payoff structure can affect the risk associated with an

Earnout, if the risk of the Earnout metric is non-diversifiable.

For a metric with only diversifiable risk, the appropriate dis-

count rate is the risk-free rate, plus any adjustment for counter-

party credit risk, applied to the expected Earnout cash flow over

the relevant time horizon. When there is no systematic risk asso-

ciated with the metric, the payoff structure cannot affect the

amount of systematic risk and therefore the payoff structure

does not affect the magnitude of the required rate of return.

For a metric (such as a financial metric) with non-diversifiable

risk, the relative risk of the Earnout as compared to the risk of

the underlying financial metric will depend on the Earnout pay-

off structure.

Discount Rate and Market Risk Considerations

Contingent Consideration payoffs are exposed to various types

of risks. When selecting the discounting for the Contingent

Consideration valuation, the valuation specialist should consider:

The time value of money – typically captured by the risk-

free rate

Counterparty credit risk, which represents the risk that the

obligor will not be able to fulfill its obligation if and when a

payment becomes due

Required Metric Risk Premium – market participants require

a premium in excess of the risk free rate that captures the

metric’s exposure to systematic risk and the portion of any

additional risk premiums (e.g., size premiums, country-risk

premiums, and company-specific premiums) relevant to the

Contingent Consideration metric

The impact on risk of the payoff structure.

According to studies in recent years, the percentage of deals for

private company targets that include Contingent Consideration

is in the range of 19% to 38%, but can reach as high as 75% in

industries such as biotech and pharmaceuticals.

Source- Guidelines on Valuation suggested by The Appraisal

Foundation

8


Mere mentioning of new address in return of income without

specifically intimating Assessing Officer with respect to change

of address and without getting PAN database changed, is not

enough and sufficient. In absence of any specific intimation to

Assessing Officer with respect to change in address and/or

change in name of assessee, Assessing Officer would be justi-

fied in sending notice at available address mentioned in PAN

database of assessee, more particularly when return has been

filed under EModule scheme.

Foreign exchange loss arising out of foreign currency fluctua-

tions in respect of loan in foreign currency used for acquiring

fixed assets should be allowed as revenue expenditure by charg-

ing same into Profit and Loss account and not as capital ex-

penditure by deducting same from cost of respective fixed as-

sets.

Mere non compliance of a procedural requirement under section

54(2) itself cannot stand in way of assessee in getting benefit

under section 54, if he is, otherwise, in a position to satisfy that

mandatory requirement under section 54(1) is fully complied

with within time limit prescribed therein

While determine ALP, a company engaged in diversified activi-

ties of software development, consultancy, engineering services,

a company having huge brand value and intangibles and a com-

pany developing its own software products, could not be accept-

ed as comparable to assessee-company rendering software de-

velopment services to its AE

Where shares which had been purchased by assessee from its

100 per cent subsidiary AE at high premium were on capital

account, revenue cannot bring difference between investment

and fair market value of shares to tax

Where assessee rendered business support services and failed to

carry out task assigned to it and availed services of expatriate

employees of its AE and claimed deduction of salary paid to

expatriate employees which was reimbursed by it to AE, deci-

sion of AE, JV and assessee clearly constituted a business or a

managerial decision which revenue could not have interfered

with.

9

PCIT Mumbai Vs . I-Ven Interactive Ltd. Su-preme Court of India 2019] 110 taxmann.com 332

(SC)

Baby Memorial Hospital Ltd.V/s ACIT

[2019] 111 taxmann.com 189 (Cochin - Trib.)

Venkata Dilip Kumar v/s CIT Chennai

[2019] 111 taxmann.com 180 (Madras)

PCIT v/s PMP Auto Components (P.) Ltd.*

Bombay High Court

[2019] 103 taxmann.com 284 (Bombay)

PCIT v/s Blue Scope Steel India (P.) Ltd.- Delhi

High Court

[2019] 103 taxmann.com 340 (Delhi)

Emulex Communications (P.) Ltd. V/s .ITO

[2019] 111 taxmann.com 124 (Bangalore - Trib.)

Income Tax Case laws


10

07 Dec TDS/TCS LIABILITY DEPOSIT Due date of depositing TDS/TCS liabilities for previous month.

07 Dec EQUALISATION LEVY DEPOSIT Equalisation Levy is a direct tax, which is withheld at the time of payment by the ser-vice recipient where the annual payment made to one service provider (Non Residents only) exceeds Rs. 1,00,000 in one financial year for the specified and notified services.

10 Dec GSTR-7 RETURN FILING DUE DATE Due Date for filing GSTR-7 by person liable to deduct TDS under GST for previous quarter.

10 Dec GSTR-8 RETURN FILLING DUE DATE GSTR-8 is a return to be filed by the e-commerce operators who are required to deduct TCS (Tax collected at source) under GST.

11 Dec GSTR-1 RETURN FILLING DUE DATE GST Filing of returns by registered person with aggregate turnover more than 1.50 crores.

13 Dec GSTR-6 RETURN FILLING DUE DATE Due Date for filing return by Input Service Distributors for previous month.

15 Dec ADVANCE TAX DEPOSIT - THIRD INSTALLMENT Due date for third Installment of advance tax for FY 2019-20.

15 Dec PROVIDEND FUND / ESI DUE DATES Due date for payment of Provident fund and ESI contribution for the previous month.

15 Dec Due date for issue of TDS Certificates for TDS deducted U/s 194-IA & 194-IB for the m/o Oct’19

18 Dec GSTR-4 Return & Payment Return by person who has opted for Compo-sition scheme under GST

20 Dec GSTR-3B RETURN FILLING DUE DATE Due date for filing GSTR – 3B return for Previous month

20 Dec GSTR-5A RETURN FILLING DUE DATE Return by person providing online infor-mation and database access or retrieval ser-vices by a person located outside India made to Non-Taxable persons in India for the pre-vious month

20 Dec GSTR-5 RETURN FILLING DUE DATE Due date of GSTR-5 (for Non-resident Tax-able person) for the Previous month.

30 Dec TDS Return for TDS deducted under Section 194-IA & 194-IB for the month of Novemeber’2019

31 Dec GSTR-9 RETURN FILLING DUE DATE Annual Return to be filed by Regular Tax-payers filing GSTR 1 and GSTR 3B

31 Dec GSTR-9A RETURN FILLING DUE DATE Taxable Persons paying tax under Section 10 of CGST Act, the composition scheme, are required to submit their annual returns in Form GSTR 9A.

31 Dec GSTR-9B RETURN FILLING DUE DATE Annual Return to be filed by e-commerce operators who have filed GSTR 8 during the financial year.

31 Dec GSTR-9C RETURN FILLING DUE DATE Taxpayers whose annual turnover exceeds INR 2 crores during a Financial Year are required to get their accounts audited by a practicing Chartered Accountant or Cost Accountant before filing returns in Form GSTR 9C.

31 Dec

IEPF-1A

Filing of application to authority for claiming unpaid amount & shares out of Investor Ed-ucation & protection fund.

31 Dec MGT - 7 Filing of annual return by a company.(Extended Date)

31 Dec CRA - 4 Filing of Cost Audit Report with the Central Government.

Monthly Compliance Calendar December 2019


11

About Us Proxcel is in specialized corporate advisory with a vision to deliver professional excellence in the field of corporate financial and management consultancy. We of-fer range of integrated professional services to help entrepreneurs set up business-es and constantly grow by leveraging all opportunities smoothly through advising them on the right financial and legal strategies for expansion. Our Services include business set up services, business valuations for merger & acquisitions and regulatory compliance, financial reporting, corporate law advisory, direct and indirect tax advisory, internal and external audit etc. Our Expert Team while sharing a common vision, belong to diverse technical, business and legal backgrounds and comprise of Chartered accountants, Chartered financial Analysts (US), Company Secretaries, Cost Accountants, Lawyers and Engi- neers. We deploy specialized and multidisciplinary teams to serve assignments re- quiring specific skills. This enables us to work proactively and closely with clients and respond effectively to their needs in a highly focused manner, which in today’s fast changing business environment is quite crucial to a client’s success. Editorial Board: CA Ajay Jain, CA Naveen Goyal, Manuj Singhal CFA, CA Chandan Rajgadhia, CS Sakshi Goyal, Apoorv Singhal, CA Kushal Bansal, CS Ru-pali Kulshreshtha, Nikita Aggarwal

DISCLAIMER

These updates are compiled for the general information of readers. Readers are advised to seek professional opinion before initiating any action based on this document. Proxcel doesn’t accept any responsibility for any loss arising out of such action.

Contact Details Proxcel Advisory Services Private Limited

26, GF, JMD Megapolis, Sector-48, Sohna

Road, Gurgaon-122018

308 KC House 5/66 Padam Singh Road,

Karol Bagh, Delhi-110005

Kocreate, 3rd Floor, Tapasya Corp

Heights, Tower A, Noida-Greater Noida

Expy, Sector 126, Noida, Uttar Pradesh

201303

Phone: 0124-421-9460

Web: www.proxcel.in

E-mail: [email protected]

Naveen Goyal

M: +9911095297

E: [email protected]

Kushal Bansal

M: +9643623236

E: [email protected]

http://www.proxcel.in/

mailto:[email protected]



proxcel advisory services private limited · 2019-12-05 · i.e. pan and aadhaar are being made...

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