Some recent updates that you would not like to miss – 31.05.2017

1.    The postal department has allotted the pin code to the CPC to ensure that letters and mails sent by taxpayers are not lost and reach the centre without delay.

2.    IT department launches Operation Clean Money Portal to track tax evaders and to increase awareness about tax compliance. CBDT press release dated 16.05.2017.

3.    Aadhaar linking with PAN made simple. Just go to www.incometaxindiaefiling.gov.in and click link Aadhaar and follow instructions, no need to login or register.

4.    Under GST challan wise breakup of inputs/ capitals goods sent for job work and subsequent return, to be given in return of outward supplies GSTR-1.

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Some recent updates that you would not like to miss – 29.05.2017

1.   There are multiple returns under the GST regime. The most common used return will be GSTR 1, 2, 3, 4 & 9. GSTR 1, GSTR 2 & GSTR 3 will be submitted by all businesses on a monthly basis. GSTR 4 is submitted on a quarterly basis and GSTR 9 on an Annual Basis.

2.   Cabinet approves signing of the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting by India.

3.   CIT couldn’t deny revision application filed by assessee merely on ground that no order was passed by A.O.: HC

4.   CBDT launches operation clean money portal to increase awareness about tax compliance.


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Some recent updates that you would not like to miss – 27.05.2017

1.   The Ministry of Home Affairs has offered a one-time exemption to Non-Government Organizations to file ‘missing’ returns as mandated by the Foreign Contribution (Regulation) Act without being levied any fine.

2.   Federation of Indian Export Organizations (FIEO) Allow exporters to pay GST on transaction through e-currency.

3.   Interest liability arising due to order of court was allowable expense, though order was stayed by divisional bench.

4.   Reduced price charged from Hawkers to supply newspaper couldn’t be treated as commission, No TDS liability u/s 194H.


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Some recent updates that you would not like to miss – 25.05.2017

1.   CBDT has issued draft rules for stakeholder comment providing the manner of valuation of an unquoted equity share for the purposes of section 56(2)(x) and section 50CA of the Income-tax Act, 1961.

2.   Finance Ministry has exempted nonresident, non citizens, a person who is of the age of eighty years or more at any time during the year from Mandatory Quoting of Aadhaar for filing ITR and for allotment of PAN.

3.   Interest on FDs earned during the pre-operative period is taxable as ‘Income from Other Sources’ under the provisions of Income Tax Act. ITAT Hyderabad: DRS Warehousing (South) v. ITO.

4.  Registration for GST enrolment to reopen on June 1 for 15 days as 6.05 million entities have enrolled them with the GSTN system.

5.  IGST to be deposited again if CGST & SGST/ UTGST paid by mistake instead of IGST but no interest to be paid. Use excess payment for relevant GST.


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Some recent updates that you would not like to miss – 23.05.2017

1.   Income-tax dept has begun a multi-city crackdown against owners of benami assets who parked their ill-gotten wealth in the name of other individuals. It has identified over 300 cases which could face action under the Benami Transactions Act.

2.   Income Tax Dept launched a new e-facility in their e-filing website to link PAN with Aadhaar. Finance Act 2017, has made it mandatory for taxpayers to quote Aadhaar or enrolment ID of Aadhaar application form for filing of ITR.

3.   Cenvat credit couldn't be rejected on ground that assessee was not registered during said period of claim: HC [2017] 80 taxmann.com 382 (Allahabad).

4.   SEBI has issued Circular and has directed all the Mutual Fund Companies to provide Instant Access Facility and e-wallet facility for investment in Mutual Funds. 

5.   Due Date for E-payment of PF for April: 15.05.2017, Deposit of DVAT TDS for April : 15.05.2017, TCS returns by all collectors : 15.05.2017, Return of DVAT TDS for quarter ending march : 15.05.2017 and Return of DVAT for quarter ending march : 15.05.2017. 

6.   Allahabad High Court confirmed punishment of a CA for presenting forged copies of Challans on behalf of the assessee to the Income Tax dept. The Court enhanced the punishment to Five years against two years suggested by the DC of ICAI.

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Some recent updates that you would not like to miss – 22.05.2017

1.   Prime Minister has asked the revenue department to scale up e-assessment facilities to cover 25 cities, take corrupt officers to task and promote a regime friendly to taxpayers. He also asked the department to train guns on benami properties and focus on broadening the tax net.

2.   High Court permits Service of Summons via SMS, WhatsApp & Email - Tata Sons ltd & Ors Vs John Doe(s) & Ors (Delhi High Court).

3.   Govt notified changes to the Banking Regulation Act, giving the RBI broad powers to deal with specific bad-loan cases as it tries to speed up resolution of Rs 9.64 trillion of stressed assets clogging the Indian banking system.

4.   CBDT is developing a dedicated portal for the investigation of those identified to have made deposits or large purchases not in line with declared income as a follow-up to Operation Clean Money, which was launched in the wake of demonetization to crack down on black money.

5.   Govt's proposed land bill is coming back in the reckoning after being in cold storage for more than a year. The parliamentary joint panel reviewing the legislation will meet on May 22 to debate its social impact.

6.   IRDA has notified the IRDAI (Outsourcing of Activities by Indian Insurers) Regulations, 2017 which shall come into force from the date of their publication in the Official Gazette.

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Some recent updates that you would not like to miss – 20.05.2017

1.   RBI has said banks cannot refuse to accept faded notes or those with scribbles. Such banknotes had to be treated as “soiled notes“ and dealt with according to the RBI's “clean note policy“.

2.   CBDT has entered into 2 unilateral Advance Pricing Agreements (APAs) with Indian taxpayers, strengthening the Government’s commitment to foster a non-adversarial tax regime.

3.   CBDT cannot insist on pre-deposit compounding fee without considering application for compounding: [2017] 80 taxmann.com 371 (Delhi HC).

4.   Assesses was entitled to full exemption u/s. 54 when the full amount was invested by the assessee even though the property was purchased in the joint names of the assessee and his brother. Shri Jitendra V Faria Vs. ITO (ITAT Mumbai)

5.   Place of arbitration determines the law that will apply to the arbitration and related matters like challenge to the award, etc. IMAX CORPORATION Vs E-CITY ENTERTAINMENT (I) (P.) LTD. SUPREME COURT OF INDIA.

6.   RBI has decided to fix the minimum Net Owned Fund (NOF) requirement for ARCs Companies at ₹ 100 crore on an ongoing basis with effect from 28-04-2017.

7.   VAT  filing date in haryana state extended till 15th of may, 2017.

8.   Finance ministry has extended the time limit for providing Permanent Account Number (PAN) or Form No. 60 by bank account holders who have not given it at the time of account opening or later to June 30, 2017.

9.   All Banks will remain closed, every Saturday from 1st June onwards. The RBI has approved  5 days Working for Banks. Now Timings will be 9:30 am to 5:30 pm.

10.  Payment of interest on loans taken for setting up industry could be claimed as revenue expenditure: SC [2017] 80 taxmann.com 375 (SC).


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Conversion of One Person Company into Private Limited Company & Vice - Versa

As per Companies Act 2013, a One Person Company (OPC) can be converted into a Private Limited Company by voluntary conversion or mandatory conversion as the case maybe.

After the incorporation of One Person Company, it cannot be converted into a private limited company unless it has completed two years from date of incorporation of such OPC. However, it can be voluntarily converted into private limited if the said time period of two years has lapsed from the date of incorporation. The procedure for such conversion shall be in accordance with the rules and regulations laid down under section 18 of the Companies Act, 2013 and Rule 7(4) of the Companies (Incorporation) Rules, 2014.

As per section 18 of the Companies Act 2013, conversion can be done by the alteration of memorandum and articles of the company. On an application made by the company, Registrar shall, on the satisfaction of compliance of provisions of this chapter, close the former registration and issue a new certificate of incorporation, after registering the documents referred to in sub-section (1), as its first registration provided that such registration shall not affect any liabilities, debts, contracts incurred or entered into, obligations.

In case, a One Person Company has a paid-up capital more than or equal to Rs. 50 lakhs or the annual turnover for the relevant financial year exceeds Rs.2 crores, then it shall mandatorily be converted into private limited or public limited company as per Rule 7(4) of the Companies (Incorporation) Rules 2014.

As per Rule 7(4) of the Companies (Incorporation) Rules 2014, if a private company other than a section 8 company having paid up share capital of Rs. 50 lakhs or less or average annual turnover during the relevant period is Rs. 2 crores or less may convert itself into OPC by passing a special resolution in the general meeting.

No objection Certificate shall be obtained from the members and creditors of the company before passing such resolution. Copy of resolution shall be filed by the company within thirty days from the date of passing such resolution in form MGT-14. Company shall file an application for its conversion into OPC along with fees in Form INC-6.

Do not miss our next update on Latest Amendments.

You may drop in your queries at team@clicknfile.in or directly get in touch with our finance/tax experts @ 8872032114, 8872032116, 8872013116

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Some recent updates that you would not like to miss – 17.05.2017

1.   Transfer pricing & advance tax requirements won't apply to Indian Cos with overseas subsidiaries are likely to get some leeway around transfer pricing, withholding tax and advance tax requirements under the place of  effective management (POEM) rules.

2.   Under GST Records can be kept in electronic form & authenticated by Digital Signature. Backups should be taken which can be restored in reasonable time.

3.   SEBI has taken the first major step towards development of the commodity derivatives market by approving introduction of options contracts since taking over the market's regulation in September 2015.

4.   Where revenue urged that assesses company received share application money from bogus shareholders, it was for revenue to proceed by reopening assessment of such shareholders and assessing them to tax and not to add same to assessee's income as unexplained cash credit. Proviso to Sec 68  [2017] 80 taxmann.com 272 (Bombay HC).

5.   Under GST every registered person to keep in physical /electronic form, books of account at Principal & EVERY related place of business mentioned in his RC.

6.   MCA has issued a Circular clarifying the issues relating to the Transfer of shares to IEPF Authority. The due date for transfer of shares by Companies to IEPF is May 31, 2017 .

7.   Meeting of creditors could be dispensed with if maximum no. of creditors gave their consent to amalgamation scheme. [2017] 80 taxmann.com 307 (NCLT - Bang.).

8.   Govt. has notified section 234 of the Companies Act, 2013 which provides for mergers and amalgamations between an Indian Company and a foreign company and vice versa. RBI has also inserted Rule 25A[2] to amend the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016.

9.   Under GST Law IGST, CGST, SGST deposited cannot be adjusted against each other. Only IGST, CGST & SGST input tax credit can be adjusted in specified order.

 10. Real Estate (Regulation and Development) Act, 2016 which seeks to protect home-buyers as well as to boost investments in the real estate industry, will come into force across the country from 1st May, 2017. Under the Act, all the States will constitute a Real Estate Regulatory Authority (RERA).

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Some recent updates that you would not like to miss – 16.05.2017

1.  ICAI issues Frequently Asked Questions on The Insolvency and Bankruptcy Code 2016 and Companies Act 2013.

2.  CBDT has decided that if due tax under PMGKY, has been received by 31st March, 2017, and deposit in the Bond Deposit has been received by 30th April, 2017, the declaration in Form No.1 can be filed by 10th May, 2017. Circular No.14 of 2017, dated: 21st April, 2017.

3.  Under GST Supplier MUST maintain Stock records of raw materials, finished goods, scrap etc (including gifts, goods lost). Composition supplier exempt.

4.  Under GST Specified account or records to be maintained separately for each activity including manufacturing, trading & provision of services etc.

5.  About 40 million subscribers of the Employees´ Provident Fund Organization (EPFO) will be able to withdraw up to 90 per cent of their accumulations in their PF account to purchase homes.

6.  The government has extended the startups intellectual property protection (SIPP) scheme for a period of three years till March 2020 to help budding entrepreneurs protect their patents, trademark and designs.

7.  When the assesses has satisfactorily explained the delay in filing the return, he cannot be denied the claim for carry forward of loss without giving an opportunity of being heard. Region Infra & Services Pvt. Ltd. V. CBDT. High Court -MADRAS.

8.  Under GST Every Registered person including a Composition Supplier, to keep & maintain separate account of Advances Received, Paid & adjustments made.

9.  CBDT has made it clear that income from letting out buildings /developed space along with other amenities in an industrial park/special economic zones (SEZs) would only be treated as “business income” and not as “income from house property”.

10.  CBDT issued Circular No.17 of 2017 on the Clarification regarding Liability to income – tax in India for a non – resident seafarer receiving salary in NER (Non Resident External) account maintained with an Indian Bank.

Have a great day ahead!

Some recent updates that you would not like to miss – 15.05.2017

1.  In GSTR-1 give Summary of supplies to unregistered persons, Rate wise for Local supplies & Rate & State wise for Inter-state ones up to 2.50 Lacs.

2.  Negotiable Instruments Act:  Notice deemed to be served when it was returned back with even in absence of drawer at correct address, or on his refusal, due services had to be presumed. Supreme Court of India.

3.  Cess applicable on CGST & IGST on vehicles, cold drinks, pan masala, tobacco, solid fuels made from coal, lignite etc& other specified supplies.

4.  From July 1, 2017, all tax returns will have to mention the Aadhaar No. , as per Sec 139AA of Income Tax Act. If you have both PAN and Aadhaar, you need to link the two. If you fail to do so, your PAN no could become invalid.

5.  The Govt. is considering scrapping Foreign Investment Promotion Board and considering doing away with prior government approval for investments in most sectors including single-brand retail.

6.  RBI permits banks to invest up to 10% in REITs,

7.  From July 1, 2017, all tax returns will have to mention the Aadhaar NO. , as per Sec 139AA of Income Tax Act. If you have both PAN and Aadhaar, you need to link the two. If you fail to do so, your PAN no could become invalid.

8.  Members who have not shared their PAN with ICAI, It has been informed by the Income Tax Dept that the e-Filing account of the members will be blocked by the Income Tax Authorities.

9.  Every entity registered under the proposed GST might have to maintain separate accounts relating to each activity. This is a part of the draft GST rules on accounts and records released by the Centre.

 10. Central Govt. has issued Draft GST Rules on Accounts & Records, Appeals & Revision and Advance Ruling on April 19, 2017, making a total of 14 Draft Rules as on date.

Have a great day ahead!

Some recent updates that you would not like to miss – 12.05.2017

1.  In GSTR-2, Purchaser to specify inward supplies for which he is not eligible for ITC fully or partly whether at invoice level or otherwise.

2.  Union ministry of finance has granted income tax exemption to Indian seafarers sailing aboard foreign ships outside India for more than 182 days a year. (CBDT) circular no. 13/2017.

3.  GSTR-1 of a month can be filed within 10 days from end of month. It cant be filed from  11th to 15th as GSTR-2 to be filed in this period.

4.  Service tax may move up from 15% to 18% under GST: Revenue Secretary Hasmukh Adhia. At present, the services sector is taxed at 14% with two additional cesses -- Swachh Bharat Cess and Krishi Kalyan Cess attracting half percent.

5.  CBDT has issued Revised Form 3CD applicable for Tax Audit cases for AY 2017-18.

6.  E-Way Bills as Per New GST Rules :

   i. Entire process requires participation by Supplier, Transporter and receipt.

  ii. IE-Way Bill will be required for movement of all goods, whether within the state or across states.

  iii. n Case of an Accident if goods would be transferred from one vehicle to another than transporter has to create a new e-way bill on the GSTN portal, before further transit.

 iv.  Multiple consignments are to be transported in one vehicle the transporter is required to indicate the serial number of the e-way bills generated in respect of each such consignment on the GSTN portal.

 v.  Validity period of the e-way bill, which is dependent upon the distance involved for transport of goods.

7.  ROC has issued notices to more than 2 Lakh Companies all over India who have not commenced business within one year of their incorporation or who have not been carrying on any business or operation for a period of two immediately preceding financial years and have not made any application within such period for obtaining the status of dormant company under section 455 to to remove/strike off.

8.  A unique PIN CODE 560500 has been allotted to Centralized Processing Center (CPC), Income Tax Department located in Bangalore by the Department of Post.

9.  Information to be furnished electronically in GST INS-01 prior to movement of goods if value exceeds Rs. 50,000, whether within or outside state.

 10. From July 1, 2017, all tax returns will have to mention the Aadhaar no, as per Sec 139AA of Income Tax Act. If you have both PAN and Aadhaar, you need to link the two. If you fail to do so, your PAN no could become invalid.


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Defective or Incomplete Return [Section 139(9)]

A return of income filed by a taxpayer / assessee for the relevant financial year is said to be defective if –

1.  Such return has not been duly filed: All items in Income Tax return form must be filled in the manner indicated in the return form. If any schedule of the relevant form is not applicable in the case of an assessee, it should be scored across as “----NA----“. If any item is inapplicable, one should write “NA” against it. One should write “NIL” to denote nil figure. No column or row should be left blank. Otherwise the return may be liable to be held defective or even invalid.

2.   Annexures, statements, accounts, etc.: A few statements, reports, proof of pre-paid taxes, accounts, etc.., should accompany the return of income, otherwise the return will become defective. However, it is not possible to attach any certificate or report or computation or final accounts with new income tax returns forms. Likewise, it is not possible to attach proof of pre-paid taxes (like tax deducted / collected at source, advance payment of tax, self – assessment tax). The assessee should, therefore, retain these certificates, report, computation, final accounts, and proof of prepaid taxes with him. These may be furnished whenever the Assessing Officer wants to examine them in assessment proceedings or otherwise. Return of income will not become defective of non – fulfilment of this requirement.

The assessing officer may give the assessee an opportunity to rectify the defect within a period of 15 days from the date of such intimation. This time – limit may be extended by the Assessing Officer on an application by the assessee.

If, however, an application filed by an assessee for extension time is not disposed of (i.e. no action is taken and the Assessing Officer remains silent), then only conclusion is that time asked for by the assessee has been granted by the Assessing Officer.

If the defect is not rectified by the assessee within the period of 15 days or such further extended period, then the Assessing Officer shall treat the return as an invalid return and other provisions of the Income-Tax Act would apply as if the assessee had failed to furnish the return.

Where the assessee rectifies defect after the expiry of the period of 15 days (or the further extended period), but before assessment is made, the Assessing Officer may condone the delay and treat the return as a valid return.

Have a great day ahead!

Some recent updates that you would not like to miss – 10.05.2017

1.  From 1st july onwords Aadhar No. is compulsory document for pan card and income tax return filling.

2.  Lok Sabha passed a Bill that would ensure continuance of levy of excise on petroleum products and abolition of cess on some other items following GST rollout from July 1

3.  Share premium received by the company on is subscribed share capital would not constitute part of the capital employed in the business of the company within the meaning of Sec 35D of the Income Tax Act, 1961 for calculating eligible amount of deduction therein. Berger Paints India Ltd. Vs. CIT, Supreme Court of India.

4.  MCA on 5th April 2016 announced E-form STK-2 for Removal of Companies name form ROC pursuant to sub section (2) of Section 248 of the Companies Act, 2013, which talk about ‘voluntary removal of name of Companies form Registrar of Companies.

5.  Bogus Share Capital cannot be assessed as Company’s Share Capital as Amendment to Sec 68 has no Retrospective Effect: Bombay High Court. In CIT v. M/s. Gagandeep Infrastructure Pvt Ltd.

6.  Capital Gain Tax would not attract if the Previous Transaction which the assesses acquired the Property was not taxable: Bombay High Court in case of Mr. Nusli Wadia.

7.   Capital gains: An amount received from a wholly-owned subsidiary in consideration of transfer of shares of the WOS to a group of shareholders is not taxable as capital gains. The Department cannot subject a transaction under the Gift-tax Act and also levy tax under the Income-tax Act.  CIT Vs  M/s Annamalaiar Mills (P) Ltd Vs CIT (Supreme Court)

8.  CBDT clarifies on cash curb, Aadhaar to the small taxpayers under the presumptive taxation scheme are exempt from maintenance of Books of A/c.

9.  Humble President has given his assent to the four key Goods and Services Tax (“GST”) Bills, after they were passed by the Parliament. The four GST Bills which are now enacted can be accessed as under:

· The Central Goods and Services Tax Act, 2017

· The Integrated Goods and Services Tax Act, 2017

· The Goods and Services Tax (Compensation to States) Act, 2017

· The Union Territory Goods and Services Tax Act, 2017

10.  In GSTR-1 give Summary of supplies to Unregistered persons, Rate wise for Local supplies & Rate & State wise for Inter-state ones up to 2.50 Lacs.

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Some recent updates that you would not like to miss – 09.05.2017

1.  Adhaar card and Pan linking option now activated on income tax website whereby now, name as per  Adhaar card also to be given. Both get linked even if there is difference in name.

2.  About 900,000 registered companies do not file annual returns and are potential sources of money laundering. Govt. pitched for the country’s top anti-financial crime agency to be used “expeditiously” against tax cheats.

3.  GST Migration for existing taxpayers has been temporarily discontinued by GSTN w.e.f. 1st May 2017.

4.  No need for Traders dealing only in petrol, diesel & other exempt or zero-rated goods to register under GST. Register if deal in other goods also.

5.  Income Tax Dept had been asking people to link their PAN no. with Aadhar before 31 July and many were finding it difficult as their names did not match in both. Just go to www.incometaxindiaefiling.gov.in and login. Then go to Profile settings and choose Aadhar linking. Then enter Aadhar no. and ENTER NAME AS GIVEN IN AADHAR CARD.

6.  Madhya Pradesh Legislative Assembly on Wednesday unanimously passed the Madhya Pradesh Goods and Services Tax (GST)

7.  CBDT has decided that the restriction on cash transaction u/s 269ST shall not apply to withdrawal of cash from a bank, co-operative bank or a post office savings bank.

8.  Lease deed, power bill etc may be needed for claiming HRA rebate as producing fake property rent receipt, often from parents and relatives, has been an easy way to lower tax burden.

9.  Under GST SEZ Unit or Developer to take separate registration even if another unit of entity outside SEZ already has separate registration in same state.

10.  Supreme Court has ruled that the circulars issued by the Securities and Exchange Board of India (SEBI) cannot be challenged before the Securities and Appellate Tribunal (SAT).


Have a great day ahead!

Need professional assistance for drafting legal agreements?

Drafting business orlegal agreements can prove to be a bit challenging task as it requires professional and legal skills to draft such agreements. Each and every word mentioned in such agreements has different meanings in one or the other way. One wrong word can change the whole meaning and ruin the very purpose.

Now question arises, what is a legal agreement?

It is an agreement that is formed between 2 or more parties to settle the terms & conditions and is enforceable by law creating some legal obligations on both the parties. Mutual assent, consideration, capacity & legality are the basic elements of a legal agreement.

We are here to discuss some of the legal agreements and aware you about the need of such agreements in a professional world –

1.     Legal Notice – Legal Notice is basically the information given by the aggrieved party, of some act done, or the interpretation by which some act is required to be done.

Notices should always be in writing; they should state, in precise terms, their object, and be signed by the proper person or his authorized Lawyer, be dated, and addressed to the person to be affected by them. There can be several types of notices like for example consumer complaint legal notice, constructive notice, legal notice to the department concerned if his/her promotion is not granted. It is basically a concept describing a requirement that a party be aware of legal process affecting their rights, obligations or duties. Legal notice is an important document before proceeding to any court of law for your grievance.

2.      Power of Attorney – POA is an authorization in writing to nominate the other to act on behalf of that individual in personal, official or any other legal affairs. The person authorizing his/her power to act on behalf of him/her is known as donor, grantor or principal of the power. And the other one who is authorized to act on former’s behalf is known as agent or the lawyer/attorney. A Power of Attorney may be special, general or temporary. A special power of attorney is one that is limited to a specified act or type of act. A general power of attorney is one that allows the agent to make all personal and business decisions. A temporary power of attorney is one with a limited time frame.

3.      Will – It is a legal document which states the desires of the donor or deceased as to how his/her share of property is being dispensed at the death and nominates one or more persons (i.e. the executor) to hold the command of his/her estate before its eventual distribution. Any person over the age of majority and generally, being of sound mind can make a will. A will is normally made for the purpose of making dispositions of property to take effect on or after a person’s death, but it may also be made for the purpose of appointing those you wish to manage any part of your estate.

Settlement Agreements – Settlement agreements, also known as compromise agreements, are documents which set out the terms and conditions agreed by those involved (the parties) when they agree to settle a potential claim or claims, or other court proceedings. The agreements are legally binding. The Settlement agreement is based upon the bargain that a party forgoes its ability to sue (if it has not sued already), or to continue with the claim (if the plaintiff has sued), in return for the certainty written into the settlement. The courts will enforce the settlement, if it is breached, the party in default could be sued for breach of that contract.

Have a great day ahead!

Some recent updates that you would not like to miss – 06.05.2017

1.  SEBI has taken the first major step towards development of the commodity derivatives market by approving introduction of options contracts since taking

2.  over the market's regulation in September 2015.

3.  Where revenue urged that assesses company received share application money from bogus shareholders, it was for revenue to proceed by reopening assessment of such shareholders and assessing them to tax and not to add same to assessee's income as unexplained cash credit. Proviso to Sec 68  [2017] 80 taxmann.com 272 (Bombay HC).

4.  Date of filing of DVAT Return in Form 16, 17 & 48 for Q4, 2016-17 has been extended upto 15.05.2017 vide Circular No. 2 dated 28.04.2017.

5.  Under GST every registered person to keep in physical /electronic form, books of account at Principal & EVERY related place of business mentioned in his RC.

6.  Meeting of creditors could be dispensed with if maximum no. of creditors gave their consent to amalgamation scheme. [2017] 80 taxmann.com 307 (NCLT - Bang.).

7.  Govt. has notified section 234 of the Companies Act, 2013 which provides for mergers and amalgamations between an Indian Company and a foreign company and vice versa. RBI has also inserted Rule 25A[2] to amend the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016.

8.  CBDT has decided that the restriction on cash transaction u/s 269ST shall not apply to withdrawal of cash from a bank, co-operative bank or a post office savings bank.

9.  Lease deed, power bill etc may be needed for claiming HRA rebate as producing fake property rent receipt, often from parents and relatives, has been an easy way to lower tax burden.

10. Under GST SEZ Unit or Developer to take separate registration even if another unit of entity outside SEZ already has separate registration in same state.

11. Supreme Court has ruled that the circulars issued by the Securities and Exchange Board of India (SEBI) cannot be challenged before the Securities and Appellate Tribunal (SAT).

12.  From 1st july onwords Aadhar No. is compulsory document for pan card and income tax return filling.

Have a great day ahead!

Some recent updates that you would not like to miss – 05.05.2017

1. RBI announces the auction of 15-days Government of India Cash Management Bill. The auction will be conducted using "Multiple Price Auction" method.

2. CBDT has made it clear that income from letting out buildings /developed space along with other amenities in an industrial park/special economic zones (SEZs) would only be treated as “business income” and not as “income from house property”.

3. CBDT issued Circular No.17 of 2017 on the Clarification regarding Liability to income – tax in India for a non – resident seafarer receiving salary in NER (Non Resident External) account maintained with an Indian Bank.

4. Transfer pricing & advance tax requirements won't apply to Indian Cos with overseas subsidiaries are likely to get some leeway around transfer pricing, withholding tax and advance tax requirements under the place of  effective management (POEM) rules.

5. Under GST Records can be kept in electronic form & authenticated by Digital Signature. Backups should be taken which can be restored in reasonable time.

6. SEBI has taken the first major step towards development of the commodity derivatives market by approving introduction of options contracts since taking over the market's regulation in September 2015.

7. CBDT has made it clear that income from letting out buildings /developed space along with other amenities in an industrial park/special economic zones (SEZs) would only be treated as “business income” and not as “income from house property”.

8. CBDT issued Circular No.17 of 2017 on the Clarification regarding Liability to income – tax in India for a non – resident seafarer receiving salary in NER (Non Resident External) account maintained with an Indian Bank.

9. Transfer pricing & advance tax requirements won't apply to Indian Cos with overseas subsidiaries are likely to get some leeway around transfer pricing, withholding tax and advance tax requirements under the place of  effective management (POEM) rules.

10. Under GST Records can be kept in electronic form & authenticated by Digital Signature. Backups should be taken which can be restored in reasonable time.

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Some recent updates that you would not like to miss – 04.05.2017

1.  CBDT has decided that if due tax under PMGKY, has been received by 31st March, 2017, and deposit in the Bond Deposit has been received by 30th April, 2017, the declaration in Form No.1 can be filed by 10th May, 2017. Circular No.14 of 2017, dated: 21st April, 2017.

2.  Under GST Supplier MUST maintain Stock records of raw materials, finished goods, scrap etc (including gifts, goods lost). Composition supplier exempt.

3.  Loan from a Company wherein the Partners of the Firm are Shareholders is not ‘Deemed Dividend’, Not Taxable in the hands of Firm: Business Strategy Group v. ACIT, ITAT Delhi.

4.  The Bihar Goods and Services Tax (GST) Bill, 2017, was passed by the bicameral state legislature on Monday, making Bihar the second state after Telangana to adopt the new tax reforms.

5.  Under GST Specified account or records to be maintained separately for each activity including manufacturing, trading & provision of services etc.

6.  About 40 million subscribers of the Employees´ Provident Fund Organization (EPFO) will be able to withdraw up to 90 per cent of their accumulations in their PF account to purchase homes.

7.  The government has extended the startups intellectual property protection (SIPP) scheme for a period of three years till March 2020 to help budding entrepreneurs protect their patents, trademark and designs.

8.  When the assesses has satisfactorily explained the delay in filing the return, he cannot be denied the claim for carry forward of loss without giving an opportunity of being heard. Region Infra & Services Pvt. Ltd. V. CBDT. High Court -MADRAS.

9.  Under GST Every Registered person including a Composition Supplier, to keep & maintain separate account of Advances Received, Paid & adjustments made.

10. MCA's push to ease of doing business can help you incorporate your company within a day with DIN/ name Reservation/ Incorporation/ PAN/ TAN also reduction of fee from Rs 2000/- to Rs 500/-


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Some basics about Business Agreements

Most agreements which are formed between any businesses or collaborations can be considered business agreements. Agreement is a prerequisite of any valid contract, payment, compromise, variation or discharge of contract or conveyance. Business Agreements can be written as well as verbal but the written agreements provide more certainty for both parties than verbal agreements. They clearly set out the details of what was agreed. It can be written or oral but written agreements provide more certainty to both the parties than verbal agreements. And the most beneficial part being it serves as a record which reduces possibility of ‘future’ disputes.

There are basically twelve types of business agreements which cover almost all the areas of business practices such as (i) Rent Agreement, (ii) Partnership Deed, (iii) Franchise Agreement, (iv) Employment Agreement, (v) Service Level Agreement, (vi) Confidentiality Agreement, partnership, rent agreements etc. Some of the popular business agreements have been discussed in detail below –

1.  Rent Agreement – When a Landlord gives the tenant, right to possess its premises (whether residential, commercial, industrial or any other), a contract is made between both the parties stating the terms and conditions of the premises occupied, known as Rent Agreement which cannot be amended or modified unless both parties agree to the same. Since, rent agreement defines the relationship between landlord and tenant; it should be in writing although it can be explicit or tacit.

2.     Partnership Deed – When two or more person enters into a partnership, then to avoid any kind of coercion, disagreement or unacceptability a written legal document is prepared known as Partnership Deed and which is made under the Indian Registration Act, 1908 so that this deed cannot be apprehended, destroyed or violated in the possession of the partners. In case future disputes prove difficult to arbitrate, this deed helps to resolve any contention between the partners.

3.      Franchise Agreement – Franchisee has been granted right to use the franchisor’s system and can operate franchised business as owner of the business but may be restricted to certain locations and locating another business nearby. For this very purpose, a legal document should be prepared called franchise agreement in which all the payment terms, agreement renewing provisions or any restrictions pertaining to transfer of the franchise should be clearly specified.

4.    Employment Agreement – An Employment contract is an agreement between an employer and employee that sets out terms and conditions of employment and is the basis of the employment relationship. A contract can be in writing or verbal but the advantage of a written agreement is that it outlines the terms and conditions agreed to by both parties i.e employer as well as employee and also it saves a lot of potential misunderstanding further down the line. Most employees are legally entitled to a Written Agreement of the main terms and conditions of employment. It is a formal agreement that specifies the conditions of the relationship between an employee and an employer including compensation and expectations. Also referred to as employment contracts, they are often executed for a specified period of time, such as one year.

5.      Service Level Agreement – Service Level measures the performance of a system, certain goals are defined and the service level gives the percentage to which those goals should be achieved. Fill rate is different from the service level. Percentage of calls answered in a call centre. SLA is a contract between the person who is providing the services and the ultimate consumer of those services, stating the degree of services expected from the provider of services. How the service itself is delivered or provided does not included in the definition of SLAs. However, actual measurements for each SLA differ depending upon the provider of the services, uniformly covered areas, quality and quantity of work, quick receptiveness and competence. The Agreement aims to builds common understanding, responsibilities, areas prioritized, warranties and guarantees given by provider of services. This can be legally binding formal or informal ‘Contract’ (for example, internal department relationship(s). The agreement may involve separate organizations, or different teams within one organization.

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Some recent updates that you would not like to miss – 02.05.2017

1.  Cess applicable on CGST & IGST on vehicles, cold drinks, pan masala, tobacco, solid fuels made from coal, lignite etc& other specified supplies.

2.  From July 1, 2017, all tax returns will have to mention the Aadhaar No. ,as per Sec 139AA of Income Tax Act. If you have both PAN and Aadhaar, you need to link the two. If you fail to do so, your PAN no could become invalid.

3. The Govt. is considering scrapping Foreign Investment Promotion Board and considering doing away with prior government approval for investments in most sectors including single-brand retail.

4.  From July 1, 2017, all tax returns will have to mention the Aadhaar NO. , as per Sec 139AA of Income Tax Act. If you have both PAN and Aadhaar, you need to link the two. If you fail to do so, your PAN no could become invalid.

5.  Govt gave time till April 30 for commensurate deposits by people who have declared their unaccounted income under the  Pradhan Mantri Garib Kalyan Yojana (PMGKY).

6.  Every entity registered under the proposed GST might have to maintain separate accounts relating to each activity. This is a part of the draft GST rules on accounts and records released by the Centre.

7.  Government released draft norms on GST advance ruling and appeals and revision.

8.  Central Govt. has issued Draft GST Rules on Accounts & Records, Appeals & Revision and Advance Ruling on April 19, 2017, making a total of 14 Draft Rules as on date.

9.  Govt. is considering scrapping Foreign Investment Promotion Board and considering doing away with prior government approval for investments in most sectors including single-brand retail.

10. ICAI issues Frequently Asked Questions on The Insolvency and Bankruptcy Code 2016 and Companies Act 2013.

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Some recent updates that you would not like to miss – 01.05.2017

1.     Bogus share capital/ premium: The proviso to s. 68 (which creates an obligation on the issuing Co to explain the source of share capital & premium) has been introduced by the Finance Act 2012 with effect from 01.04.2013 and does not have retrospective effect.  vsCIT. Gagandeep Infrastructure Pvt. Ltd (Bombay High Court) 

2.     E-Way Bills as Per New GST Rules :

i) Entire process requires participation by Supplier, Transporter and receipt.

ii) IE-Way Bill will be required for movement of all goods, whether within the state or across states.

iii) In Case of an Accident if goods would be transferred from one vehicle to another than transporter has to create a new e-way bill on the GSTN portal, before further transit.

iv) Multiple consignments are to be transported in one vehicle the transporter is required to indicate the serial number of the e-way bills generated in respect of each such consignment on the GSTN portal.

v) Validity period of the e-way bill, which is dependent upon the distance involved for transport of goods.

3.   ROC has issued notices to more than 2 Lakh Companies all over India who have not commenced business within one year of their incorporation or who have not been carrying on any business or operation for a period of two immediately preceding financial years and have not made any application within such period for obtaining the status of dormant company under section 455 to to remove/strike off.

4.     A unique PIN CODE 560500 has been allotted to Centralized Processing Center (CPC), Income Tax Department located in Bangalore by the Department of Post.

5.     No denial of sec. 10(37) exemption if compensation amount of agricultural land was settled after negotiation: Supreme Court [2017] 80/84/[2017] 391 ITR 178.

6.     Information to be furnished electronically in GST INS-01 prior to movement of goods if value exceeds Rs. 50,000, whether within or outside state.

7.     Importers liable to pay ST for importing services of transportation of goods by a vessel w.e.f April 23 ,2017. NOTIFICATION No. 15/2017-Service Tax.

8.     From July 1, 2017, all tax returns will have to mention the Aadhaar no, as per Sec 139AA of Income Tax Act. If you have both PAN and Aadhaar, you need to link the two. If you fail to do so, your PAN no could become invalid.

9.     CBEC has amended the Point of Taxation Rules, 2011 by insertion of new Rule. In the Point of Taxation Rules, 2011, after Rule 8B has been inserted as Determination of point of taxation.

10. In GSTR-1 give Summary of supplies to unregistered persons, Rate wise for Local supplies & Rate & State wise for Inter-state ones up to 2.50 Lacs.

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Some recent updates that you would not like to miss – 29.04.2017

1.  Govt. is set to slash safe-harbor margins in transfer pricing within a few weeks. The margins are used to determine the prices of goods and services rendered by multinationals to their subsidiaries in India.

2.  Bogus Share Capital cannot be assessed as Company’s Share Capital as Amendment to Sec 68 has no Retrospective Effect: Bombay High Court. In CIT v. M/s. Gagandeep Infrastructure Pvt Ltd.  

3.  Capital Gain Tax would not attract if the Previous Transaction which the assesses acquired the Property was not taxable: Bombay High Court in case of Mr. Nusli Wadia. 

4.  Capital gains: An amount received from a wholly-owned subsidiary in consideration of transfer of shares of the WOS to a group of shareholders is not taxable as capital gains. The Department cannot subject a transaction under the Gift-tax Act and also levy tax under the Income-tax Act.  CIT Vs  M/s Annamalaiar Mills (P) Ltd Vs CIT (Supreme Court)

5.  CBDT clarifies on cash curb, Aadhaar to the small taxpayers under the presumptive taxation scheme are exempt from maintenance of Books of A/c.

6.  Humble President has given his assent to the four key Goods and Services Tax (“GST”) Bills, after they were passed by the Parliament. The four GST Bills which are now enacted can be accessed as under:

The Central Goods and Services Tax Act, 2017

The Integrated Goods and Services Tax Act, 2017

 The Goods and Services Tax (Compensation to States) Act, 2017

 The Union Territory Goods and Services Tax Act, 2017

7.   In GSTR-1 give Summary of supplies to Unregistered persons, Rate wise for Local supplies & Rate & State wise for Inter-state ones up to 2.50 Lacs.

8.   In GSTR-2, Purchaser to specify inward supplies for which he is not eligible for ITC fully or partly whether at invoice level or otherwise.

9.   CBDT has issued Revised Form 3CD applicable for Tax Audit cases for AY 2017-18.

10.   Income tax dept has zeroed in on 60,000 persons who deposited “excessive” cash after the note ban. These include those dealing in high value property and petrol pump owners. Of the 60,000 persons, 1,300 are “high risk” ones who, along with the remaining, would be probed for possible black money generation as part of Operation Clean Money II (OCM). 

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Compliance Requirements Post Incorporation of Company

After incorporation of Private Limited Company, there arise some immediate formalities that need to be completed post incorporation as a part of Private Limited Company registration services. You need to comply with the rules & regulations of the Companies Act 2013 starting from the day you incorporate.

1.      Appointment of Auditor

After obtaining the Certificate of Incorporation, the very next formality is to appoint the first auditor of the company. Board of Directors must call a board meeting for the appointment of an auditor for the company that too within 30 days of date of registration of company. If board fails to appoint the first auditor within the above stipulated time then members of the company must be informed, who may, at an extraordinary General Meeting, appoint the first auditor of the Company within 90 days of such intimation. Appointed auditor shall hold the tenure till the conclusion of the first Annual General Meeting.

2.      Disclosure of Director’s Interest and Declaration regarding Disqualification

Concern or interest of the directors or shareholders in other companies or bodies corporate, firms or other association of individuals shall be disclosed by the directors of the company and declare that such directors are not disqualified. This is a perpetual compliance as well; directors must disclose their interests from time-to-time as required by the Companies Act 2013.

3.      Registered Office

Company shall be required to have a registered office on and from 15^th day of its incorporation and at all times thereafter, capable of receiving and acknowledging communication & notices. Verification of registered office of the company required to be filed within 30 days of its incorporation in form INC-22 with the Registrar of Companies. Failure in compliance of which may attract a penalty of Rs.1,000 for every day during which a default continues up to maximum of Rs.1,00,000.

4.      Issue of Share Certificates to Subscribers

Every company must deliver the share certificates within a period of two months from the date of incorporation to the subscribers of the memorandum, failure of which may attract a minimum fine of Rs.25,000 which may extend up to Rs.5,00,000.

Do not miss our next update on Latest Amendments.

You may drop in your queries at team@clicknfile.in or directly get in touch with our finance/tax experts @ 8872032114, 8872032116, 8872013116

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Making it simpler and easier: Ease of Doing Business in India

Government of India has emphasized on the importance of ‘Ease of Doing Business’ as a major pillar of ‘Make in India’ initiative. Hon’ble Prime Minister Shri Narendra Modi has set a target for India to be ranked among the top 50 countries over the next 3 years in the World Bank Doing Business Study. In order to achieve this target all the departments / agencies concerned have come forward and implemented the reforms in the right earnest. The following are the few notable reforms:

1.    Requirement of minimum paid up capital and common seal under the Companies Act 2013 done away with.

2.   Registration for Permanent Account Number (PAN), Tax Deduction Account Number (TAN), EPFO (Employees' Provident Fund Organization) and ESIC (Employee's State Insurance Corporation) and incorporation of company can be done through a single form on eBiz portal.

3.      Time taken for obtaining PAN and TAN on eBiz portal has been brought down to T+1 days.

4.      Provision made for applying for company name and Director Identification Number (DIN) at the time of incorporation with single Form-INC29.

5.      Online and real time registration of ESIC and EPFO has been introduced.

6.      Provision for online payment of EPFO and ESIC contributions has been introduced.

7.    Requirement of bank account for registration with EPFO and ESIC has been made optional.

8.      Central Registry Rules have been amended to record security interests of all types of property.

9.      Number of documents required for imports and exports have been reduced to three.

10. All documents for export and import to be submitted electronically with digital signatures i.e. no physical submission of document.

11. Custom ICEGATE Portal has been integrated with Food Safety and Standards Authority of India (FSSAI), Animal & Plant Quarantine, Drug Controller & Wildlife Control Bureau for imports.

12.  Shram Suvidha Portal launched to issue unique Labour Identification Number (LIN), submission of common electronic returns under 8 Labour Acts and facilitate risk based inspections.

13.  Insolvency and Bankruptcy Code with provision of easy and faster exit, passed by the Parliament.

14.  SARFAESI (Central Registry) Rules have been extended to register extended security interests.

The above significant changes will scale down the number of procedures and days taken to start a business which will slash the costs involved as well. Starting business made simpler and easier by this step taken by The Government of India. These remarkable reforms have improved our rank in Starting a Business parameter from 164 to 155 over the last one year.

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