Mazars Tax Update | Edition 31.20

DIRECT TAX NEWS

Taxpayers need not report Scrip wise details in their Income Tax Returns

The Central Board of Direct Taxes (“CBDT”) on 26th September 2020 clarified that there is no requirement of scrip wise reporting for day trading and short-term sale or purchase of listed shared in the filing of ITR for AY 2020-21.

The scrip wise details are required for the reporting of the long-term capital gains for those shares/units which are eligible for the benefit of grandfathering mechanism introduced in Finance Act 2018.

Time limits for compulsory selection of returns for complete scrutiny and filing belated/ revised ITR’s for Assessment Year 2019-20 has been extended

F.No. 225/126/2020/ITA-II and F.No. 225/150/2020/ITA-II, dated 30^th September 2020
Considering the difficulties faced by the field formation due to outbreak of Covid-19 Pandemic and PAN migration related issues the CBDT has extended the date of compulsory selection of returns for complete scrutiny by one month from 30^th September 2020 to 31^st October 2020.
Further, the due dates of furnishing of return u/s 139(4) and revised returns u/s 139(5) of the Income Tax Act, 1961 (“Act”) for the Assessment year 2019-20 has been further extended from 30^th September 2020 to 30^th November 2020.

CBDT issued guidelines for deduction/collection of Tax u/s 194-O and 206C(1H) of the Act

F.No370133/22/2020-TPL, dated- 29^th September 2020

For the purpose of removing practical difficulties in implementing the provisions contained in section 194-0 and 206C(1H) of the I-T Act, the CBDT has issued guidelines which will become effective from 01st October 2020. The guidelines are basically in respect of applicability of transactions in securities and commodities which are traded through recognized stock exchanges or cleared and settled by the recognized clearing corporation, applicability on payment gateways, applicability on insurance agents and insurance aggregators, calculation of threshold of Rs. 5 Lakh with respect to the previous year for an individual/ Hindu undivided family being ecommerce participant, receipt of sale consideration for sale of motor vehicle of the value of Rs. 10 Lakh or less to a buyer, adjustment on account of r sale return, discount or indirect taxes including GST and sale consideration received for fuel supplied to non-residential airlines.

Vodafone wins Rs 20,000 Crores Tax Arbitration case against Government of India

The Permanent Court of Arbitration in Hague has settled the tax dispute between the Income Tax Department and Vodafone involving levy of retrospective tax of Rs 20,000 crore.

The Permanent Court of Arbitration  held that the conduct of the Indian authorities was in breach of “fair and equitable” treatment assured under the Bilateral Investment Treaty (BIT), signed between Netherlands and India.
Importantly, the Indian authorities have been directed to “cease the conduct in question” and also directed that the Government of India should also pay over Rs. 40 crores to the Vodafone as compensation for its Legal Cost.

JUDICIAL PRONOUNCEMENTS

Mumbai Bench of ITAT held that CFS activities constitutes infrastructure facility as defined under Sec.80IA(4) of the Act

M/s Ameya Logistics Pvt. Ltd., Uran v/s DCIT Circle 2(1)(1), ITA No. 2044/MUM/2019, dated 29th September 2020 

The brief facts of the case are that the assessee company had setup a Container Freight Station (CFS) in Maharashtra. The AO made addition of Rs. 87.96 crores by disallowing the deduction claimed u/s 80IA(4) of the Act and stated that the CFS was neither a port nor an Inland Port, and thus, not an eligible infrastructural facility, therefore it is not eligible to claim deduction u/s 80IA(4) of the Act. The AO further made addition in the book profits of Rs. 8,61,613/- u/s 14A r.w. Rule 8D of the IT Rules i.e, an amount equal to one per cent of the annual average of the monthly average of the opening and closing balances of the value of investment, income from which does not or shall not form part of total income. It was held that CFS activities carried out by the assessee were nothing but infrastructure facility as defined under Sec.80IA(4) of the Act, therefore assessee is entitle to deduction u/s 80IA(4) of the Act.
In respect to disallowance with regards to books profits, it was held that if assessee had sufficient self-owned funds for making the investments in the exempt income yielding investments is found to be in order. Thus, no disallowance u/s 14A of any part of the interest expenditure would be called for in its hands.