ITAT Dejhi in the case of Aricent Technologies Holdings Ltd vs. ACIT Decided that where the deductor has deducted tax at source but has not deposited the tax with the Govt, the assessee cannot be made to suffer. U/s 205, the assessee/ deductee cannot be called upon to pay the tax. Credit for the tax deducted at source has to be allowed in the hands of the deductee irrespective of whether the same has been deposited by the deductor to the credit of the Central Government or not.
CBDT issues order to mitigate hardship arising due to Compliance of TDS/TCS Provisions vide Press Release dated April 04, 2020 issued order U/s 119 of the act to mitigate hardships to taxpayers arising out of compliance of TDS/TCS .
High Court of Kerala gave an important judgment regarding filing of Form GSTR TRAN-1 electronically or manually and department has to accept it. in case of Leo Distributors V. Commissioner of State GST [2020] 114 taxmann.com 28 (Kerala)
Government has exempt Custom duty and health chess on the import of ventilators, face masks & surgical masks, PPEs and covid test kits. This was done considering the escalating demand for medical goods as India enters a crucial phase in its covid-fight.
Reserve Bank expects the value of the domestic currency to hover around Rs 75 to a dollar and Indian crude basket to about USD 35 per barrel during 2020-21. The rupee came under intensified and sustained depreciation pressures from mid-January, reflecting a generalised weakening of emerging market currencies amid flights to safety, RBI said in its Monetary Policy Report.
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Brief from Deepak Parekh’s ( HDFC Chairman Webinar
Current Scenario-Analysis & Business Response
1. Conserve, Cash at all Costs, you will need it for unforeseen circumstances, including another lock down
2. Make Team A & B. Team A studies prepares current response, and Team B works on situation after two years.
3. You will have to increase wages for some workers to incentivize them to come back. Getting people back will be a problem
4. Travel sector will be hit for a very long time. 2 years plus.
5. 9 Months of this year will be gone in recovery in normalcy in terms of Operations coming back
to normal. If there is no other pandemic.
6. Cut Costs, Reduce Salaries, Prune Manpower if needed.
7. Increase equity in the company. Better to be over capitalized is better than to be over leveraged.
Being Over leveraged will be a disaster, avoid the debt trap at all costs. Give a discount, let investors make money. Get Private Equity. Singapore Airlines is doing a Rights issue as we speak.
8. Micro finance will be worst hit, amongst NBFCs.
9. Build relationship and trust with the banks. Don’t move relationships for a quarter or half a
percent.
10. Await announcement for MSME. More incentives and support expected.
11. Real Estate: Land is a state subject, Real Estate Prices will come down by 20% at least.
Developers who have bought land at high prices will to take a hit on the projects. Many companies will go bankrupt. MCHI – Credai must talk to the Govt for a one time restructuring like in 2008. It will take 8-9 months for things to normalize for Real Estate.
12. Payments from Govt is a big issue. Lot of litigation
Macroeconomic Factors & Risks,
Long term Outlook:
1. Govt has agreed to increase Fiscal Deficit which is a good sign. State Govts getting Overdraft facilities from Central Government.
2. Consumer Credit is 13% as a percentage of GDP, where as China is 40% and USA 80%
3. Mortgage to GDP, India: 10%, China: 26%, Thailand 20%, Scandinavia: 90% USA: 70%. India
needs to reach the 12-15% mark in the coming couple of years.
4. Yes Bank on Path on recovery, Should have taken part in a similar manner for ILFS and Jet
Airways.
5. USA 10 year paper is 0.77%, India is 6%. India is at a BBB (Lowest Investment Grade). If we
get graded down we will become a Junk Bond .This will crash the economy. This is also why it
will be difficult to print money.
6. Interest rates will go down further, but Banks must pass it on to the company. RBI lends only to
the Banks in India and Banks are concerned more about their own Balance Sheet than national
interest. RBI must start buying Company Bonds.
7. Middle-East will be in a big trouble. Oil will not go back to 60-70. Oil will be at 40-50.
8. Expect more deglobalization. European countries have already made it mandatory for Govt
approval for all acquisition, as companies are available cheap and there is a fear that China may
look to take over companies in Europe.
9. Rupee will be under pressure. Look at a minimum 3% depreciation YoY of the rupee even in the
best times. We are doing much better at the moment with 10% depreciation (Many are at 25%). Trouble will ensue only if our rating goes to Junk. Our Rating unfortunately has not gone up even in our Best Years of 8% growth. However, Companies are getting good borrowing rates. Exports will have to grow for India to do better. Expect a package for Export soon from the Government.
10. By 2023 390 million people will come into the middle class. Hence investment will come. Only 2% of Indians are invested in Equity. Equity investors will increase. India Mutual fund to GDP
ratio is 12% where as in Mexico etc. are 60% plus and USA 100%. India needs to move to 20%.
Rising middle class will lead to more investments in Real Estate and Equity in the long term.
11. Savings rate in India is 17% (Earlier 30%). 10% out of that is in Real Estate or Golds etc. Liquid Savings rate is 7%. People in India are getting used to consumption in India. So there is no
stress there. Hopeful that consumption will increase.
12. EPFO should be allowed to invest in equity. They invested in IL&FS and made a loss. So it is
more conservative.
13. There is a medicine (Cure) which is under testing in the USA, which hopefully should be out in
the market by June end if FDA approves. Vaccine (preventive) will take time.
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COVID-19 pandemic will unleash worst recession since Great Depression: IMF. The outbreak of Covid 19 has diminished the wealth of India's Richest man by 28%. With the collapse of global markets, analysts have been speculating the repercussions of Covid 19 over the business valuations.
This documents tries to focus on the *impacts on business valuations* and the considerations to be kept in mind while valuing..
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👉🏻Extension of mandatory minimum deposit in PPF, Sukanya Samriddhi Account
(Fin Min extends deadline for mandatory minimum deposit in PPF, Sukanya Samriddhi Account till June 30)
👇🏻 👇🏻 👇🏻
https://bit.ly/3beg0YR
👉🏻Scheduled Banks’ Statement of Position in India as on Friday, March 27, 2020
(RBI issued Press release regarding Scheduled Banks’ Statement of Position in India as on March 27, 2020)
👇🏻 👇🏻 👇🏻
https://bit.ly/2yU9TdP
👉🏻Bank Audit under CBS | NPA Identification | Bank Branch Audit
Bank Audit under CBS Environments - Identification of NPA under CBS and Finacle, BaNCS Commands discussed by CA. Kuntal P Shah
👇🏻 👇🏻 👇🏻
https://bit.ly/2V2VYuk
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Ministry of Corporate Affairs
MCA allows companies to hold Extraordinary General Meetings (EGMs) through VC or OAVM complemented with e-Voting facility/simplified voting through registered emails
Posted Date:- Apr 08, 2020
The Ministry of Corporate Affairs (MCA) is fully cognizant of the difficulties faced by companies on account of the ongoing nation-wide lockdown and social distancing due to COVID 19. The Ministry has also taken note of various representations received from industry associations and corporates on the need to facilitate companies in taking certain emergent/ urgent measures in the face of extreme disruptions and dislocation caused by the pandemic.
Taking stock of the situation, the MCA had earlier allowed all meetings of the Board of directors upto 30th June 2020, to be conducted through Video Conferencing (VC) or other audio visual means (OAVM) vide its notification date 19.03.2020, including meetings on items where the physical presence of directors is otherwise required.
In furtherance of the Government’s objective of facilitating corporate compliances during the current lockdown period and other restrictions on account of COVID 19, the Ministry has today issued a circular allowing companies to hold Extraordinary General Meetings (EGMs) through VC or OAVM complemented with e-Voting facility/simplified voting through registered emails, without requiring the shareholders to physically assemble at a common venue. The Companies Act, 2013 allows ordinary and special resolutions to be passed through postal ballot/e-voting route without holding a physical general meeting. However, in present lockdown/social distancing conditions due to COVID 19, postal ballot facility cannot be utilized by the companies.
Accordingly, the General Circular No. 14/2020 dated 08.04.2020 issued by the MCA allows listed companies or companies with 1,000 shareholders or more which are required to provide e-voting facility under the Companies Act, 2013 to conduct EGM through VC/ OAVM and e-Voting. For other companies, a highly simplified mechanism for voting through registered emails has been put in place for easy compliance.
The framework leverages the strengths of digital India by using a combination of VC and e-Voting/simplified voting through registered emails to enable companies conduct their EGMs. As the meetings will be conducted over VC/ OAVM, the facility for appointment of proxies has been dispensed with, while representatives of bodies corporate will continue to get appointed for participation in such meetings.
This framework allows the companies to hold shareholders’ EGMs through VC/ OAVM without compromising on the other requirements of law. As an additional check, all companies using this option are required to maintain a recorded transcript of the entire proceedings in safe custody, and public companies are also required to host this transcript on their website for greater transparency. Further, all resolutions passed through this framework will be required to filed with the RoC within 60 days, so that such resolutions may be viewed publicly. Other safeguards have also been included in the Circular to ensure transparency, accountability and protection of interests of investors.
The Ministry’s circular dated 08 April 2020 is available at http://www.mca.gov.in/Ministry/pdf/Circular14_08042020.pdf
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ICAI UPDATES - 12.04.2020
SPECIAL ADDRESS BY ICAI PRESIDENT CA ATUL GUPTAJI
🎈ICAI is working to provide reverification result within 7 Days
🎈ICAI to reduce the time taken to announce result by 15 Days
100% Machine Checking of Papers by 2024
🎈ICAI is creating a Case Study of Question Bank of 5000 Case Studies.
🎈Council has approved the Virtual/Online Classes for Post Qualification Courses
🎈CDS Portal will be started immediately after Lockdown
🎈ICAI will come out with Research Paper on Revival of Economy post COVID-19
🎈Guidelines might be issued for Digital Signing of Audit Reports due to Covid 19
🎈ICAI looking for Case Study Developer
🎈 ICAI will promote work from home culture for women members
🎈No reduction in Job Opportunities for CA's due to COVID-19
🎈Correction window might be reopened only for change of center and not group
🎈No extension of Last Attempt of Old Syllabus of IPCC/FINAL
🎈No postponement/preponement of June 2020 attempt
🎈Level of Examination of June 2020 exam will be same, Exam Postponement Will Not Make Exam Harder
🎈ICAI - MTP will Be Commence After 1st May
🎈Lockdown period will not be treated as Holidays for Articles and considered as working but those who are on leaves for examination it will not be considered as working
🎈Earmarked 100 crore for Student Scholarship
🎈No exemption for CS from CA Articleship
🎈 Council will come online every month to answer queries
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👉🏻CBDT clarifies on issue of certificates for collection of TDS, TCS
(CBT provided clarification on orders under Section 119 of the Income-Tax Act issued relating to the issue of certificates for lower deduction/collection of TDS/TCS)
👇🏻 👇🏻 👇🏻
https://bit.ly/3aTVrk2
👉🏻Minimum CRS score drops to 464 in Express Entry draw for CANADA PR
(This rare second draw within the same day saw the lowest minimum CRS score requirement since October 2019)
👇🏻 👇🏻 👇🏻
https://bit.ly/2RrtjNI
*👉🏻Penalty for False Entry or Omission of any entry*
(Dangerous Provision under Finance Act, 2020, Every Professional should watch it regarding section 271AAD of the Income Tax Act)
👇🏻 👇🏻 👇🏻
https://bit.ly/39VsIKw
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Income Tax Department, on its official Twitter handle, announced that it will issue all pending income tax refunds up to Rs 5 lakh immediately to individuals and business entities.
refunds, customs refunds, and IT will soon be credited into your accounts as the government has decided to provide immediate tax relief to about 1 lakh businesses and 14 lakh taxpayers. With this, the ministry of finance will provide a total tax refund to the tune of Rs 18000 crore.
Maharashtra AAR gave an important ruling dated 22 January 2020, where applicant is a receiver of supply of services from VFS Global in case of Municipal Corporation of Greater Mumbai [2020] 114 taxmann.com 238 (AAR - MAHARASHTRA)
GST: Concessional Interest for late filing of 3B & Waiver of Late Fee for GSTR-1 & 3B applies only if filed by specified dates. Noti 31/32/33 of 3.4.20.
CBIC Vide press note dated 09-04-2020 decided to exempt BCD and Health cess on the import of
Ventilators, Face masks, surgical masks, Personal protection equipment , Covid 19 test kits Inputs for the manufacture of the above items Till 30th Sep 2020.
Sebi has relaxed its guidelines for foreign portfolio investors (FPIs) seeking a Category-I licence, a move seen giving a boost to overseas investment in stocks. Investors from countries which are not Financial Action Task Force (FATF) members can still qualify for such registrations if the countries are specified by the Indian government.
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GST Department have no jurisdiction to raise demands for the period prior to take over date after the resolution plan was finalized & approved-Ultra Tech Nathdwara Cement Ltd. Vs. Union of India-Rajasthan High Court
Hon'ble Rajasthan High Court held that it cannot be gainsaid that the controversy at hand hours around the simple issue as to whether the resolution plan approved by the COC is binding on the department or not. In this regard, it is trite to note that as per the amended Section 31 of the IBC, the Central Govt., State Govt. or any other local authority to whom, a debt in respect of payment of dues arising under any law for the time being in force are owed, have been brought under the umbrella of the resolution plan approved by the adjudicating officer which has been made binding on such governments and local authorities. The purpose of the IBC is salutary as it has been enacted to ensure that an industry under distress does not fade into oblivion and can be revived by virtue of the resolution plan. Once the offer of the resolution applicant is accepted and the resolution plan is approved by the appropriate authority, the same is binding on all concerned to whom the industry concern may be having statutory dues. No right of audience is given in the resolution proceedings to the operational creditors viz. the Central Govt. or the State Govt. as the case may be.
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👉 The National Company Law Appellate Tribunal, vide judgment dated 12.03.2020, has set aside the Competition Commission of India (“CCI/Commission”) order dated 14.07.2016 imposing a fine of INR 1 crore on M/s Eli Lilly and Company (“Eli”) for gun jumping i.e. for not notifying its acquisition of Novartis Animal Health in India (“NAH”) within the prescribed limit.
Eli- a company based in the United States agreed to acquire the global animal health business of Novartis AG pursuant to a Stock and Asset Purchase Agreement (“SAPA”) dated 22.04.2014 covering the global portion of the transaction. The transaction was publicly announced and notified under the merger control laws in several jurisdictions around the world including the United States and the European Union and the transaction was cleared in each jurisdiction and closed on 01.01.2015.
With respect to India, the acquisition of NAH was handled separately by a separate Slump Sale Agreement dated 03.12.2014 between the parties Indian subsidiaries. The transaction was notified to the Indian Foreign Investment Promotion Board (“FIBP”) on 10.11.2014. However, the transaction was not notified to the CCI as the parties believed it to be covered under the then applicable de Minimis Exemption which applied to acquisitions of enterprises whose sales in India were not more than INR 750 Crores or whose Indian assets valued not more than INR 250 Crores.
👉 By a recent judgment dated 04.03.2020, the Hon’ble National Company Appellate Tribunal (“NCLAT”) has set aside the order dated 06.11.2018 passed by the Competition Commission of India (“CCI”) dismissing allegations of Abuse of Dominant Position by Flipkart India Pvt. Ltd and Flipkart Internet Pvt. Ltd.
The information before the CCI was filed by All India Online Vendors Association (“AIOVA/informant”) which is a group of more than 2000 sellers selling on e-commerce marketplace such as Flipkart, Amazon, and Snapdeal etc. The primary allegation was that Flipkart India sells goods to companies like WS Retail Services Private Limited (“WS Retail Service”), which was owned by the founders of Flipkart Internet Pvt Ltd.( FlipKart Internet) till 2012, at a discounted price and thereafter, these goods are sold on the platform operated by Flipkart Internet. As per the informant, this practice amounted to preferential treatment to certain sellers. In other words, the information revealed an alleged strategy of Flipkart India to acquire goods from various persons and to immediately sell them to WS Retail Services at a discount, which would, in turn, sell these goods as sellers on the internet platform Flipkart.com of Flipkart internet was anti-competitive and forecloses markets for online sale of the goods by members of AIOVA.
The CCI in its order held that Flipkart is not in a dominant position in the relevant market due to the presence of Amazon (its closest competitor having a valuation around $700 billion) and other competitors such as Paytm Mall, SnapDeal, and Shopclues etc. In addition, new entrants such as Paytm Mall revealed the low entry barriers in the relevant market and ,therefore , no case of abuse of dominant position was made out against FlipKart. AIOVA challenged this CCI order dated 6.11.2018 (prima facie order) in appeal before NCLAT.
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The MCA vide General Circular no 15/2020 dated 10th April 2020 has issued the following Clarifications in respect of CSR during COVID 19 pandemic
1. Contributions made to the PM Cares Fund shall qualify as CSR expenditure
2. Contributions made to the Chief Ministers Relief Fund or State Relief Fund shall not qualify as CSR expenditure
3. Contributions made to the State Disaster Management Authority to combat COVID 19 shall qualify as CSR expenditure
4. Expenditure towards COVID 19 related activities including preventive health care and sanitation shall qualify as CSR expenditure
5. Payment of salary, wages to employees and workers including contractual workers during lockdown shall not qualify as CSR expenditure
6. Payment of wages to temporary, casual, daily wage workers during lockdown shall not qualify as CSR expenditure
7. Payment of Ex gratia to temporary or casual or daily wage workers during lockdown shall qualify as CSR expenditure.
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👉🏻Banks ask customers to be cautious against frauds
(The cyber criminals pretending as officials of banks have been reaching out to borrowers, offering them assistance to avail the loan repayment moratorium scheme for phishing out account details)
👇🏻 👇🏻 👇🏻
https://bit.ly/2Ru3k8l
👉🏻Ministry of Labour notifies provident fund contribution scheme
(Govt will grant relief in form of credit of EPF & EPS contributions (24% of wages) for three months in UANs of contributory EPF members)
👇🏻 👇🏻 👇🏻
https://bit.ly/2XsFL3i
👉🏻MCA issued COVID-19 related FAQs on CSR
(MCA issued a set of FAQs along with clarifications are provided below for better understanding of the stakeholders)
👇🏻 👇🏻 👇🏻
https://bit.ly/3b1OJbQ
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👉 New Delhi, Apr 10 (PTI) The National Company Law Tribunal (NCLT), which at present is hearing only urgent matters through video conferencing, has directed litigants to file "joint memos" of written submissions to save time and ensure rapid disposal amid the Covid-19 pandemic.
The tribunal has asked both sides -- applicants and respondents -- to jointly draft memos, containing points for determination as mutually decided by the parties.
The effort is aimed at making the the process expedient to understand the issues through virtual hearings and dispense justice without any delay.
"This joint memo shall, after having signed by both the parties and the counsel, be filed one day before the date of hearing or at least six hours before hearing," said a notice issued by NCLT registrar dated April 7.
According to the NCLT, this "procedure will avoid delays, avoid filing reply and rejoinder and this memo will be user friendly to arrive to decisions quickly".
This would be applicable for all company-related matters and insolvency proceedings going before the tribunal.
According to the notice, the applicants shall brief facts, mention the supporting material papers while narrating facts in five to ten lines and the reliefs thereto and serve the same upon the opposite party along with its application.
👉 Lenders to Jet Airways are gearing up to liquidate the airline as they are losing all hope of finding a new owner for it given the massive stress in the global aviation sector due to the travel restrictions imposed across the globe following the Covid-19 epidemic.
While the lenders had taken 90 more days to find a buyer under the NCLT-led insolvency process before the epidemic broke out, banking sources said it would now be impossible to get a bider at a time when the aviation sector’s outlook is gloomy.
“It (Jet) may head for liquidation. Even those who have evinced interest are likely to back out due to the adverse impact of the Covid-19 pandemic on the global aviation industry. Existing airlines themselves are finding it difficult to survive. So, taking over a sick company will be all the more difficult,” said a source close to the development. NCLT has given three months’ time from March 15 for revival of the defunct airline through a fresh invitation for expression of interest (EOI).
“With the global aviation industry reeling under the pandemic, it is unlikely that new bidders will show interest. Lenders’ total exposure to the airline is ₹7,227 crore,” said the source.
Prudent ARC, Synergy Group and a consortium of the Russian government-backed Far East Development Fund, in partnership with Enso Group, had earlier submitted their EOI. But none of them submitted a financial bid before the deadline expired on March 9.
“While we were in an advanced stage of going forward and formulating our plan, the Covid-19 situation erupted, so we are now waiting and watching the situation,” Pradeep Goel, Chairman and Managing Director, Prudent ARC, told BusinessLine. According to Goel, the aviation, hospitality, and F&B industries are going to take a serious hit. “We have to evaluate it before we take any steps further because one wrong move will land us into a huge ditch and crores of losses. It will be a very critical decision,” he said.
Thanks for reading