The CBDT has issued Circular No. 39/ 2016 dated 29.11.2016 in which it has stated that in accordance with the judgement of the Supreme Court in Meghalaya Steels Ltd, the subsidies of transport, power and interest given by the Government to the Industrial Undertaking are receipts which have been reimbursed for elements of cost relating to manufacture/sale of the products and there is a direct nexus between profit and gains of the industrial undertaking / business and reimbursement of such business subsidies. The CBDT has directed that such subsidies are part of profits and gains of business derived from the Industrial Undertaking and are not to be included under the head ‘Income from other sources’. Therefore, deduction is admissible under section 80-IB/80-IC of the Act on such revenue receipts derived from the Industrial Undertaking

The Union Finance Minister Arun Jaitley today introduced the Taxation Laws (Second Amendment) Bill, 2016 with a view to tax unaccounted black money deposited in bank accounts pursuant to demonetisation. The salient terms of the proposal to tax the unaccounted cash are as follows: (i) 30 per cent tax on undisclosed income plus 10 per cent penalty as also a 33 per cent surcharge; (ii) 25 per cent of undisclosed income post demonetisation has to be deposited in the Pradhan Mantri Garib Kalyan Deposit Scheme; (iii) undisclosed wealth deposited post demonetisation which is detetcted by the income-tax authorities will attract 75 per cent tax and 10 per cent penalty. The money from the Pradhan Mantri Garib Kalyan Deposit scheme would be used for projects in irrigation, housing, toilets, infrastructure, primary education, primary health and livelihood so that there is justice and equality, states the Statement of Objects and Reasons of the Bill

The Chamber of Tax Consultants has organized a public meeting to discuss the tax and legal implications of the demonetisation of currency. The meeting will be addressed by an expert panel comprising of four eminent Advocates and Chartered Accountants. The experts will consider implications under the Income-tax Act, FEMA, PMLA, Prohibition of Benami Property Transactions Act, Service Tax , VAT, Excise etc. Members of the public are requested to send their queries in advance so that the expert panel can express a considered opinion on them

The Directorate of Income Tax Systems has addressed a letter dated 07.11.2016 stating that the Directorate is in the process of modifying the CASS parameters so as to select cases for scrutiny assessment for returns filed in AY 2016-17. The Directorate has made important recommendations and invited suggestions for improving the process

The CBDT has issued Circular No. 37/2016 dated 2nd November 2016 in which it has accepted the settled position that if the disallowances made under sections 32, 40(a)(ia), 40A(3), 43B, etc. of the Act and other specific disallowances, related to the business activity against which the Chapter VI-A deduction has been claimed, result in enhancement of the profits of the eligible business, the deduction under Chapter VI-A is admissible on the profits so enhanced by the disallowance. The CBDT has also directed that appeals should not be filed on this ground by the Department and appeals already filed should be withdrawn/ not pressed upon

The Institute of Chartered Accountants of India (ICAI) has issued a comprehensive publication dated 28th October 2016 titled “ICAI Guidance Note On Report Under Section 92E Of The Income-tax Act, 1961 (Transfer Pricing)” in which it has explained all the nuances of the law relating to transfer pricing. The publication is useful not only for Chartered Accountants who have the onerous responsibility of issuing the report under section 92E of the Income-tax Act but also for other tax professionals and tax payers who desire to understand the mechanics of the law

Hon’ble Sushil Chandra, who has been recently appointed as the Chairman of the CBDT, has got off to a flying start. He has issued a detailed communiqué to the Income-tax department in which he has set out the road map that has to be followed over the next six months