Here we are with the Thirty fifth successive issue of our monthly ‘Missive’. We trust you will enjoy reading this Missive, even while soaking in the contents. We would very much appreciate your feedback which consistently helps us in improving and upgrading the contents. Thanks and regards, Knowledge Management Team

1. MISSIVE
Volume XXXV
April 2014

2. Topics Page
No
Direct Tax 1
Transfer Pricing 6
Service Tax 8
Value Added Tax 8
Customs 9
Case Law 10
FEMA 11
Company Law 12
Transactions that made
headlines
17
Never hold your head high with
pride or ego, even the winner of a gold
medal gets his medal only when he
puts his head down!!!
Index
Dear Patron
Here we are with the Thirty fifth
successive issue of our monthly
‘Missive’.
We trust you will enjoy reading this
Missive, even while soaking in the
contents. We would very much
appreciate your feedback which
consistently helps us in improving
and upgrading the contents.
Thanks and regards,
Knowledge Management Team

3. 1
DIRECT TAX
CIRCULAR NO. 8/2014 DATED 31-3-2014
CLARIFICATION ON INTERPRETATION OF
PROVISIONS OF SECTION 10(2A) IN CASES
WHERE INCOME OF FIRM IS EXEMPT
Tax Authorities has been denying the
exemption to partners on share of profit in
cases where firm is not liable to tax by virtue of
some exemption or deduction based on the
following grounds:
1. Exemption to partners is applicable
only when the firm has suffered tax on
such income.
2. The term ‘total income’ signifies
taxable income, since, exempt income
does not form part of the total income
of the firm, and hence, partner is not
eligible to exemption in respect of its
share in the exempt income of the firm.
3. Share of profit in the hands of the
partner can be exempt only to the
extent such profits are taxed in the
hands of the firm.
The above circular brings an end to the much
debated issue by clarifying the fact that 'total
income' of the firm for sub section (2A) of
section 10 of the Act, as interpreted
contextually, includes income which is exempt
or deductible under various provisions of the
Act. It is, therefore, further clarified that the
income of a firm is to be taxed in the hands of
the firm only and the same can under no
circumstances be taxed in the hands of its
partners. Accordingly, the entire profit credited
to the partners' accounts in the firm would be
exempt from tax in the hands of such partners,
even if the income chargeable to tax
becomes NIL in the hands of the firm on
account of any exemption or deduction as
per the provisions of the Act.
Union of India v/s Tata Chemical Ltd.
[2014]43 taxmann.com 240(SC)
The Supreme Court held that interest is
payable to a tax deductor on refund of
excess tax withheld
Facts
In the recent precedent of Tata Chemical
Ltd.(‘assessee/ taxpayer/ Company’) the
Hon’ble Supreme Court dealt with the issue
that whether the taxpayer, who is entitled to
refund of excess taxes withheld by it under the
provisions of the Income tax Act, 1961 (‘the
Act’), is also entitled to refund thereon.
The taxpayer withheld taxes on the amount
credited to two technicians from a foreign
company for services of the technicians and
reimbursement of expenditure. The rate of
taxes withheld under Section 195(2) of the Act
was in pursuance to the Special Order passed
by Assessing Officer (‘AO’) directing the
taxpayer to deduct tax at the rate of 20
percent before remitting the aforesaid
amount, i.e., total amount credited including
the amount of reimbursements, to the foreign
company.
After such deposit, the taxpayer appealed
CIT(A) against AO’s Special Order, wherein,
while allowing the appeal concluded that the
reimbursement of expenses was not part of the
Income, and accordingly directed refund of

4. 2
tax deducted at source on such
reimbursements along with interest thereon as
provided under Section 244A(1) of the Act.
The AO held that Section 244A provides for
interest only on refunds due to taxpayer and
not to the deductor and declined the claim of
the Company.
Held
Aggrieved from the decision, the Company
appealed the matter to higher authorities. The
Supreme Court’s ruling was in favour of the
assessee and Hon’ble Supreme Court opined
as under:-
 As held by the Courts, while awarding
interest, it is a kind of compensation of use
and retention of the money collected by
the tax department. When the collection is
illegal there is corresponding obligation on
the tax department to refund such amount
with interest for the period they have
retained the money deposited.
 Refund due and payable to the taxpayer is
debt- owned and payable by the tax
department. There being no express
statutory provision for payment of interest
on the refund of excess amount/ tax
collected by the tax department, the
Government cannot shrug off its apparent
obligation to reimburse the deductor’s
lawful monies with the accrued interest or
the period of undue retention of such
monies.
 The present case does not fall either under
Section 244A(1)(a) or (b) of the Act.
Therefore, in such a case, the opening
words of Section 244A(1)(b) specifically
referred to ‘as in any other case’ the
interest is payable from the date of
payment of tax.
Alkaben B Patel vs. Income Tax Officer
(Ahmedabad ITAT – Special Bench)
Time limit of 'six months' in sec 54EC
means 'six British Calendar months' in view
of the General Clauses Act, 1897
Facts
Assessee claimed exemption u/s 54EC from
Long term capital gains on account that the
sale consideration was utilized in the purchase
of ‘specified asset’ i.e. NHAI bonds within six
months from the date on which the transfer
took place. Revenue contended that no
exemption was available since the asset was
transferred on 10th June 2008 whereas the
investment was made on 17th December 2008
(date on which amount stands withdrawn from
the relevant bank account), thereby alleging
that the investment was made after the expiry
of the specified period. ITAT Special Bench
interpreted the meaning of phrase “six
months” and held in the favour of the
Assessee.
Held
The ITAT Special Bench held as follows:
1. The term 'month' is not defined in The
Income Tax Act, therefore seeking the
help of an another statute ; hence,
examined the term "month" as per

5. 3
section 3(35) of General Clauses Act,
1897 which says "month" shall mean a
month reckoned according to the
British calendar i.e. last day of the
month.
2. Being an incentive provision, the same
should be interpreted liberally (CBDT
Circular No. 791 dated 02.06.2000). In
the present case, the intention is to
attract investment to be used for the
development of infrastructure etc. The
question as to whether a statute is
mandatory or directory, depends upon
the intent of the legislator and not
upon the language in which it is
clothed. The meaning and intention of
the legislator is to be judged by the
language, but these are to be
considered not only from phraseology
of the provision, but also by considering
its nature, its design, and the
consequences which would follow from
construing it the one way or the other.
3. After scrutinizing few more sections of
the Act it is evident that on some
occasion the Legislature had not used
the terms "Month" but used the number
of days to prescribe a specific period.
For example in Section 254(2A) First
Proviso it is prescribed that the Tribunal
may pass an order granting stay but for
a period not exceeding one hundred
and eighty days. This is an important
distinction made in this statute while
subscribing the limitation/ period. This
distinction thus resolves the present
controversy by itself.
Indus Towers Ltd. vs. Commissioner of
Income Tax (2014) 44 taxmann 3 [Delhi
High Court]
Receipts from provision of passive
infrastructure services to the mobile
operators amount to renting and would
attract lower TDS deduction under section
194-I and not under section 194C
Facts
The petitioner, Indus Towers Ltd., provided
passive infrastructure services to the mobile
operators ('customers'), which, inter-alia,
included, tower, shelter, diesel generator sets,
batteries, air conditioners, etc. It applied for
issue of a lower deduction certificate at rate of
0.5% on its project receipts under Sec. 194C of
the IT Act, but AO issued lower deduction
certificate at rate of 2.5% under Sec. 194-I of
the IT Act. Writ was filed to challenge the
revisionary order of CIT who affirmed the
decision of AO. The issue before the High Court
was whether the activity, i.e., provision of
passive infrastructure services by petitioner to
the mobile operator would constitute renting
within the extended definition under
Explanation to Section 194-I or whether the
activity was service without any element of
hiring or letting out of premises?
Held
The High Court held in the favour of Revenue
contending that TDS was deductible u/s 194I
but not on account of renting of land but for
use of plant and equipment @ 2% based on
the following grounds:
1. The definition of "renting" has to be
viewed in perspective. What strikes
instantly is that the definition is clear as
to the nature of transactions it covers

6. 4
("means"). Secondly, it is expansive in
sweep ("any other…arrangement for
the use, (either separately or together)"
any land, building, machinery or plant
irrespective of ownership of the payee
is covered. The Parliamentary intent
was clear that transactions - the
consideration for which otherwise may
not be covered by rent - also ought to
be within Section 194-I, by use of the
expression "other … arrangement for
the use". Whilst there is no doubt that
the intention of the parties in the
present case was to ensure that the use
of technical and specialized
equipment maintained by Indus should
be resorted to; at the same time, there
is no escape from the fact that the
infrastructure is given access to, and in
that sense, it is given for the "use" of the
mobile operators. The towers in a sense
are the neutral platform without which
mobile operators cannot operate.
2. If one goes back in time each mobile
operator - which is now Indus' customer
- used to carry out this activity, by
necessarily renting premises and
installing the same equipment. Of
course, the rent paid then to the
owner, whenever such transactions
were leases, were business expenses.
Yet leases or such like arrangement
had to be resorted to. That situation has
remained unchanged; now instead of
the mobile operator performing the
task, it is done exclusively by Indus. The
dominant intention however, in these
transactions - between Indus and its
customers - is the use of the equipment
or plant or machinery. The "operative
intention" here, to borrow the phrase
from Rajbir Kaur v. S. Chokesiri and Co.,
AIR 1988 SC 1845 , was the use of the
equipment. The use of the premises
was incidental; in that sense there is an
inseparability to the transaction as spelt
out in Sultan Brothers (P) Ltd. v
Commissioner of Income Tax, 1964 (51)
ITR 353 .
Gulshan Malik v/s Commissioner of
Income-tax [2014] 43 taxmann.com 200
(Delhi)
36 months period under Section 2(42A) for
booking rights should be counted from
date of buyer's agreement with builders
High Court of Delhi manifested its comments
over taxability of capital gains on sale of
immovable property as long term or short term.
The issue under consideration is that whether
the date of booking the rights in an apartment
should be considered or the date of signing
buyer’s agreement with the builder should be
taken into consideration.
The 36 months period under Section 2(42A) of
the Act for deciding whether booking rights
are short-term capital asset or long-term
capital asset should be counted from date of
buyer's agreement and not from the date of
booking/date of allotment application/
confirmation letter where the allotment
application/confirmation letter states clearly
that no right to provisional or final allotment
accrues until Buyer's agreement is signed and
returned to the builder.

7. 5
Vikas Lok Sewa Smiti v/s Commissioner of
Income-tax -II, Agra (ITAT Agra Bench)
The assessee was engaged in educational
activities, merely because it engaged Z, a
commercial venture for setting up of
school or to provide educational programs
to school of assessee, it would not make
assessee disentitled for registration
Facts
The assessee was an educational society
registered under the Societies Registration Act.
It engaged ‘Z’ for providing educational
contents and producing or procuring
educational software and providing guidance
for setting up schools and conducting classes
for vocational courses. It filed application for
grant of registration under Section 12AA of the
Act.
The Commissioner, on perusal of the
documents, found that school was being
projected as an upper end educational
experience where boarding and lodging
facility would be available, once the
construction would be completed; and that 'Z'
was a company, which was being run as
commercial venture and was not having any
registration under Section 12A of the Act and
exemption under Section 10(23). The
Commissioner held that only for the reason
that the society would be running a school, it
could not be said that the society was carrying
charitable activities. The Commissioner,
accordingly, found that the assessee would
run a commercial venture and, hence,
registration claim was denied.
Held
Ongoing through the definition of 'charitable
purpose', it is clear that the education per se is
charitable activity. The Commissioner did not
dispute that the aims and objects of the
society are educational only and as such
charitable in nature. Moreover, merely
because the assessee had engaged 'Z', a
commercial venture, the assessee would not
be disentitled for registration. Ultimately, it is the
society who has to run educational school for
achieving its objects.
Further, at the stage of grant of registration
genuineness of the objects has to be tested.
Thus, there was enough of documentation to
prove that the assessee was engaged in
educational activities and had the same aims
and objects and, as such, satisfied the
requirement of Section 12AA of the Act for
grant of registration. In view of the above, the
impugned order was set aside and the
Commissioner was directed to grant
registration to the assessee under Section 12AA
of the Act from the date of filing of application
before him as per law.

8. 6
TRANSFER PRICING
Whirlpool of India Ltd. Vs. DCIT I.T.A .No.-
426/Del/2013 (ASSESSMENT YEAR-2008-09)
Expenses in nature of discount are outside
purview of total composition of AMP
expenses for purposes of determination of
their ALP
The assessee incurred certain amount of
advertisement expenses and claimed
exclusion of certain sum described by it as
'Pricing adjustment' from AMP expenses for
purpose of determination of ALP in that regard.
It claimed that such 'Pricing adjustment' was
nothing but a leverage in the maximum retail
price of the products sold to the dealers and
distributors of the assessee-company as a profit
mark-up in the form of extra trade discount.
The TPO did not accept the Assessee's
contention for the elimination of this amount
from the total AMP expenses by opining that it
was a tool employed by the assessee to
create the brand loyalty amongst its dealers.
The DRP and, in turn, the Assessing Officer
accepted the TPO's point of view on this
aspect.
The Special Bench of the Tribunal in the case of
LG Electronics India (P.) Ltd. has held that 'the
expense in connection with the sales which do
not lead to brand promotion cannot be
brought within ambit of 'AMP expenses' for
determining the cost/value of international
transactions'. It has further been held that the
logic in the exercise of finding out the AMP
expenses towards creation of marketing
intangible for the foreign AE starts with
identifying the expenses which are otherwise in
the nature of AMP. If an expenditure itself is not
in the nature of AMP, that ought to be
excluded at the very threshold. From the
above observations of the Special Bench on
this issue, it is manifest that the expenses, which
are in the nature of discount, are outside the
purview of total composition of AMP expenses
for the purposes of determination of their ALP.
The TPO duly accepted the nature of the
amount as discount and incentives to the
Assessee's dealers and distributors. He
proceeded to include this amount in the total
AMP expenses by holding that it was a tool
employed by the assessee to create this brand
loyalty among the dealers. Thus, it is patent
that the nature of the amount in question is
undisputed, as being discount given to dealers
on the sales made. Once it is held that a
particular amount is discount and is not in the
nature of direct advertisement expenses, the
same stands expelled from the qualifying
amount which undergoes the process of
determination of ALP of the AMP expenses.
Bharti Airtel Limited Vs. Additional
Commissioner of Income Tax
I.T.A. No.: 5816/Del/2012 Assessment year:
2008-09
A transaction (such as a corporate
guarantee) which has no bearing on
profits, incomes, losses or assets of the
enterprise is not an ‘international
transaction’ u/s 92B(1) and not subject to
transfer pricing
The assessee issued a corporate guarantee to
Deutsche Bank on behalf of its associated
enterprise, Bharti Airtel (Lanka), whereby it
guaranteed repayment for working capital
facility. The assessee claimed that since it had
not incurred any cost on account of issue of
such guarantee, and the guarantee was
issued as a part of the shareholder activity, no
transfer pricing adjustment could be made.
However, the TPO held that as the AE had
benefited, the ALP had to be computed on
CUP method. This was upheld by the DRP by
relying on the retrospective amendment to s.
92B which specifically included guarantees in

9. 7
the definition of “international transaction”. On
appeal by the assessee to the Tribunal HELD
allowing the appeal:
(i) A transaction between two enterprises
constitutes an “international transaction” u/s
92B only if it has a bearing on profits, incomes,
losses, or assets of such enterprises”. Even the
transactions referred to in the Explanation to s.
92 B, which was inserted with retrospective
effect (which includes giving of guarantees
under clauses (c)), should also be such as to
have a bearing on profits, incomes, losses or
assets of such enterprise;
(ii) The onus is on the revenue to demonstrate
that the transaction has a bearing on profits,
income, losses or assets of the enterprise. The
said impact has to be on real basis, even if in
present or in future, and not on contingent or
hypothetical basis. There has to be some
material on record to indicate, even if not to
establish it to hilt, that an intra AE international
transaction has some impact on profits,
income, losses or assets;
(iii) When an assessee extends assistance to
the AE, which does not cost anything to the
assessee and particularly for which the
assessee could not have realized money by
giving it to someone else during the course of
its normal business, such an assistance or
accommodation does not have any bearing
on its profits, income, losses or assets, and,
therefore, it is outside the ambit of international
transaction u/s 92B (1).
Maersk Global Centres (India) Private
Limited, Vs. Asst. Commissioner of Income
Tax
I.T.A. No.7466/Mum/2012 Assessment Year:
2008-2009
The Special Bench of the Mumbai ITAT
considering two issues held as under:
Whether BPO companies can be
compared with KPO entities
The Tribunal held that IT enabled services
cannot be further dissected into BPO and
KPO services for the purposes of
comparability analysis inter-alia in view of
the following:
i. Due to a broad range of activities
in the ITeS sector and significant
overlap between such services, no
strict line of distinction can be
drawn between low end BPO or
high end KPO activities;
ii. The upward shift of BPO industry in
the value chain has resulted in
emergence of KPOs and due to the
mixed nature of both services, the
artificial segregation or creation of
a third ‘in-between’ category is not
possible.
Companies earning abnormally high profit
margins as comparable companies:
(i) Indian TP regulations deviate from
the OECD guidelines by adopting
the arithmetic mean instead of
quartile range suggested by the
OECD, which excludes outliers.
(ii) Potential comparables cannot be
excluded merely on the ground of
abnormally high profits.
(iii) Such abnormal margins should
trigger further investigation and
analysis to inter-alia ascertain
whether such high profits reflect a
normal business condition or arise
from some abnormal conditions
during the year; are there any
differences in functions and if all
comparability conditions are met
by such potential comparables.

10. 8
SERVICE TAX
Department cannot enforce demand in
respect of reimbursement of expenses
In case of Intercontinental Consultants and
Technocrats Pvt. Ltd. v. Union of India, 2013
Honorable Delhi High Court has held that
service tax is not applicable on reimbursement
of expenses incurred by Service Provider.
Thereafter, department has filed appeal
before Apex Court (C.A. No.2013/2014). Till
date the issue related to taxability of
reimbursements is pending before Apex Court
however department is proceeding further in
terms of Show Cause Notices as well as
enforcing demand against service providers.
Recently, aggrieved by various show cause
notices issued by the Service Tax Department
in terms of Section 67 of the Finance Act, 1994
read with Rule 5 (1) of the Service Tax
(Determination of Value) Rules, 2004;
petitioners has filed writ petitions before
Honorable Delhi High Court (M/s. Balaji Mariline
Pvt. Ltd. Versus Joint Commissioner, Service
Tax, Commissioner of Service Tax 2014).
In this case, referring the judgment of Delhi
High Court in case of Intercontinental
Consultants and Technocrats Pvt. Ltd. v. Union
of India, 2013, honorable Delhi High Court has
directed Service Tax Department not to
proceed further in terms of the impugned show
cause notices or draw or enforce any demand
against the petitioner. The court has also
clarified that the Service Tax Department
would, however, be at liberty to initiate
proceedings in the event of and having
regard to the final orders of the Supreme Court
in the pending appeal.
VALUE ADDED TAX
Central Sales Tax (Delhi) [Amendment]
Rules,2014
Reconciliation Return
Rule 4 of CST (Delhi) Rules has been amended.
In addition to the returns required under Rule 3,
every dealer shall also furnish to the
Commissioner, a Reconciliation Return for a
year in Form 9 relating to receipt of
declarations/certificates within a period of 6
months from the end of the year to which it
relates. The return shall be filed electronically.
The return may be revised by the end of the
financial year next to which it relates.
Amendment and Cancellation of Registration
Certificate
In the said rules, after Rule 10, Rule 10A has
been inserted which provides that the
application for cancellation of registration can
be filed in Form 10 and application for
amendment of registration can be filed in
Form 11.
Notification No.F.3(27)Fin.(Rev-I)2013-
14/DSVI/292 dated 5.03.2014
Online filing of information/return by using
digital signature
To facilitate the dealer/person to submit
information/return etc. online by using digital
signatures, the provisions contained In the
Information Technology Act, 2000 and the rules
made and directions given under the
Information Technology Act. 2000 have been
extended to the procedures under the Delhi
Value Added Tax Act, 2004 and Delhi Value
Added Tax Rules, 2005.
Notification No.F.3(21)Fin/(Rev-
I)/2013/DSVI/347 dated 26.03.2014

11. 9
Appropriate Government Treasury for
collection of tax, interest, penalty or any
other amount due under the Act
The following banks located in the National
Capital Territory of Delhi have been notified as
the ‘Appropriate Government Treasury’ for
collection of tax, interest, penalty or any other
amount due under the Act or Central Sales Tax
Act, 1956 from the dealers registered or liable
to be registered under the Act, casual traders
and contractees (TAN holders):
1. Allahabad Bank 2. Axis Bank 3. Bank of
Baroda 4. Bank of Maharashtra 5. Canara
Bank 6. Central Bank of India 7.
Corporation Bank 8. HDFC Bank 9. ICICI Bank
10. IDBI Bank 11. Indian Bank 12. Indian
Overseas Bank 13. Kotak Mahindra Bank 14.
Oriental Bank of Commerce 15. Punjab & Sind
Bank 16. Punjab National Bank 17. State Bank
of India 18. Syndicate Bank 19. UCO Bank 20.
Union Bank of India 21. United Bank of India 22.
Vijaya Bank.
Notification No.F.7(400)/Policy/VAT/2014/1387-
1398 dated 28.03.2014
CUSTOMS
Conversion Rate for Foreign Exchange
Rate of exchange of conversion of each of the
following foreign currency into Indian currency
or vice versa shall, with effect from 21st March,
2014 be the rate mentioned against it in the
given tables:
SCHEDULE-I
S.
No.
Foreign
Currency
Rate of exchange of
one unit of foreign
currency equivalent to
Indian rupees
(For
Imported
Goods)
(For Export
Goods)
1. Australian
Dollar
56.85 54.50
2. Bahrain Dinar 167.10 157.90
3. Canadian
Dollar
55.10 53.75
4. Danish Kroner 11.55 11.15
5. EURO 85.65 83.65
6. Hong Kong
Dollar
7.95 7.80
7. Kuwait Dinar 223.75 211.35
8. New Zealand
Dollar
52.95 51.45
9. Norwegian
Kroner
10.25 9.95
10. Pound
Sterling
102.45 100.20
11. Singapore
Dollar
48.60 47.55
12. South African
Rand
5.80 5.45
13. Saudi Arabian
Riyal
16.80 15.90
14. Swedish
Kroner
9.70 9.40
15. Swiss France 70.35 68.60
16. UAE Dirham 17.15 16.20
17. US Dollar 61.75 60.75
SCHEDULE-II
S. No. Foreign
Currency
Rate of exchange of 100 units of foreign
currency equivalent to Indian rupees
(For Imported
Goods)
(For Export Goods)
1. Japanese
Yen
60.55 59.10
2. Kenya Shilling 73.00 68.85

12. 10
Notification No.24/2014-Customs (N.T.) dated
20th March, 2014
CASE LAWS
Commissioner of Central Excise,
Aurangabad v. Komal Enterprises,
(2014)
Credit allowed even if vendor has charged
duty wrongly
Recently, the CESTAT, MUMBAI BENCH in the
case of Commissioner of Central Excise,
Aurangabad v. Komal Enterprises, (2014) held
that buyer is eligible to avail CENVAT Credit of
duty charged by supplier irrespective of the
fact that activity carried on by supplier does
not amount to manufacture of goods.
The assessee in the cited case was engaged in
manufacture of springs and press pans for
which he procured S.S.Wires from supplier. The
supplier has paid duty on such wires and the
appellant took credit of the duty paid.
Department argued that supplier's process of
drawing wire from wire rods did not amount to
manufacture and, therefore, no duty was
payable by supplier and, accordingly, no
credit could be taken by assessee. Honorable
Tribunal held that the supplier issued
CENVATable invoices and paid duty thus as
per rule 9 of CENVAT Credit Rules, 2004,
assessee was entitled credit of duty paid.
CCE Salem vs. Salem Starch & Mfr’s
Service Indl. Co-op. Society Ltd., 2014
Clearing & Forwarding Agent Services
The assessee society was receiving the goods
from its member-manufacturers at its doorstep
for auction sale to member merchants. It
stored the products, tested its quality, provided
a finance facility for the manufacturers by way
of advances, sold the products on auction
whereafter the buyer took delivery of the
goods. The Court held that in absence of any
responsibility to collect the goods from the
manufacturer’s premises nor to arrange for
dispatch to the buyer, the assessee cannot be
held to be a clearing and forwarding agency.
B. G. Shirke Construction Technology
Pvt. Ltd. vs. CCE, 2014
Commercial or Industrial Construction service
Sports Complex Stadium constructed for the
purpose of holding games which was allowed
to be used by the public later on, on payment
of user charges is a public facility for the
recreation of the public and it does not come
under the category of commercial or industrial
construction merely because some amount is
charged for using the facility. Hence
construction of sports stadium being a non-
commercial construction is not liable for
service tax under the category of
“Commercial or Industrial Construction
service”.
Tandus Flooring India Pvt. Ltd. vs. CST
2014
Export of Service / Place of provision of service
Where the applicant proposed to engage
itself in providing Marketing and Sales Support
Services to a US and Chinese companies for
sale of their products in India, for which it was
to receive monies in convertible foreign

13. 11
exchange, the Authority on Advance Ruling
held that the place of provision service to be
provided by the applicant would be outside
India since the location of the service recipient
is in China and US respectively (vide rule 3 of
the Place of Provision Rules, 2012). Further,
since the case met with the requirements of
Rule 6A of Service Tax Rules, 1994, the
applicants service would also be considered
as “export” of service.
FEMA
A.P. (DIR Series) Circular No. 113 dated
March 26, 2014
External Commercial Borrowings (ECB) for
Civil Aviation Sector
Vide A.P. (DIR Series) Circular No. 113 dated
April 24, 2012, External Commercial Borrowings
(ECB) can be raised by airline companies for
working capital as a permissible end-use,
under the approval route, subject to the
conditions stipulated in the said Circular. The
scheme was extended till December 31, 2013
vide A.P. (DIR Series) Circular No. 116 dated
June 25, 2013.
On a review and subject to all other conditions
stipulated in aforesaid Circular dated April 24,
2012, remaining unchanged, it has been
decided, vide this Circular, that this scheme of
raising ECB for working capital for Civil Aviation
Sector will continue till March 31, 2015.
A.P. (DIR Series) Circular No. 114 dated
March 27, 2014
Risk Management and Inter Bank Dealings
Under the extant guidelines of the Foreign
Exchange Management (Foreign Exchange
Derivative Contracts) Regulations, 2000 dated
May 3, 2000 (Notification No. FEMA/25/RB-2000
dated May 3, 2000) as amended from time to
time and A.P. (DIR Series) circular no. 58 dated
December 15, 2011, relating to hedging of
currency risk of probable exposures based on
past performance by residents:
(a) Exporters are allowed to hedge
currency risk on the basis of a
declaration of an exposure up to an
eligible limit computed as the average
of the previous three financial years’
(April to March) actual export turnover
or the previous year’s actual export
turnover, whichever is higher.
(b) Importers are allowed to hedge up to
an eligible limit computed as 25
percent of the average of the previous
three financial years’ actual import
turnover or the previous year’s actual
import turnover, whichever is higher.
(c) All forward contracts booked under this
facility by both exporters and importers
are required to be on fully deliverable
basis. In case of cancellation,
exchange gain, if any, should not be
passed on to the customer.
Vide this circular, in order to provide greater
operational flexibility, it has been decided to
relax the restriction at paragraph (c) above.
Henceforth, contracts booked up to 75
percent of the eligible limit mentioned at
paragraph (a) and (b) above may be
cancelled with the exporter/importer
bearing/being entitled to the loss or gain as

14. 12
the case may be. Contracts booked in excess
of 75 percent of the eligible limit mentioned at
paragraph (a) and (b) above shall be on a
deliverable basis and cannot be cancelled,
implying that in the event of cancellation, the
exporter/importer shall have to bear the loss
but will not be entitled to receive the gain.
A.P. (DIR Series) Circular No. 115 dated
March 28, 2014
Merchanting Trade Transactions – Revised
Guidelines
By A.P. (DIR Series) Circular No. 95 dated
January 17, 2014 the existing guidelines laid out
in A.P. (DIR Series) Circular Nos.106 & 4 dated
June 19, 2003 and July 19, 2003, respectively,
were reviewed, in the light of the
recommendations of the Technical Committee
on Services / Facilities to Exporters under
Chairmanship of Shri G. Padmanabhan, to
further liberalise and simplify the procedure.
In view of suggestions received from
merchanting traders and trade bodies, the
guidelines on merchanting trade transactions
have been further reviewed and revised
guidelines have been issued vide this circular.
COMPANY LAW
Below mentioned Rules have been notified by
the Ministry of Corporate Affairs in relation to
different chapters of the Companies Act, 2013,
effective from 1st April, 2014:
Sl.
No
.
Respecti
ve
Chapter
of the
Compan
ies Act,
2013
Subject Matter Date of
Notification
01 Chapter
1
The Companies
(Specification of
definition details) Rules,
2014
27th
March,
2014
02 Chapter
2
The Companies
(Incorporation) Rules,
2014
30th
March,
2014
03 Chapter
3
The Companies
(Prospectus and
Allotment of Securities)
Rules, 2014
27th
March,
2014
04 Chapter
4
The Companies (Share
Capital and Debenture)
Rules, 2014
27th
March,
2014
05 Chapter
5
The Companies
(Acceptance of
Deposits) Rules, 2014
31st
March,
2014
06 Chapter
6
The Companies
(Registration of
Charges) Rules, 2014
27th
March,
2014
07 Chapter
7
The Companies
(Management and
Administration) Rules,
2014
27th
March,
2014
08 Chapter
8
The Companies
(Declaration and
Payment of Dividend)
Rules, 2014
27th
March,
2014
09 Chapter
9
The Companies
(Accounts) Rules, 2014
27th
March,
2014
10 Chapter
10
The Companies (Audit
and Auditors) Rules,
2014
31st
March,
2014
11 Chapter
11
The Companies
(Appointment and
Qualification of
Directors) Rules, 2014
27th
March,
2014
12 Chapter
12
The Companies
(Meeting of Board and
its Powers) Rules, 2014
27th
March,
2014
13 Chapter The Companies 31st
March,

15. 13
13 (Appointment and
Remuneration of
Managerial Personnel)
Rules, 2014
2014
14 Chapter
14
The Companies
(Inspection,
Investigation and
Enquiry) Rules, 2014
31st
March,
2014
15 Chapter
21
The Companies
(Authorised to
Registered) Rules, 2014
31st
March,
2014
16 Chapter
22
The Companies
(Registration of Foreign
Companies) Rules, 2014
31st
March,
2014
17 Chapter
24
The Companies
(Registration Offices and
Fees) Rules, 2014
31st
March,
2014
18 Chapter
26
The Nidhi Rules, 2014 28th
March,
2014
19 Chapter
29I
The Companies
(Adjudication of
Penalties) Rules, 2014
28th
March,
2014
20 Chapter
29II
The Companies
(Miscellaneous) Rules,
2014
28th
March,
2014
Clarification with regard to section 180 of
the Companies Act, 2013
[General Circular No 4/2014 dated
25/03/2014]
It has been clarified by the Ministry of
Corporate Affairs that the ordinary resolution
passed under section 293 of the Companies
Act, 1956 prior to 12.09.2013 with reference to
borrowings (subject to the limits prescribed)
and / or creation of security on the assets of
the company will be regarded as sufficient
compliance of the requirements of section 180
of the Companies Act, 2013, for a period of
one year from the date of notification of said
section 180.
Commencement Notification of the
Companies Act, 2013
[Reference No S.O(E) dated 26/03/2014]
In exercise of the powers conferred by sub
section (3) of section 1 of the Companies Act,
2013 (18 of 2013) the Central Government had
notified 183 new sections of the said Act, on
the 26th day of March, 2014, effective from 1st
day of April, 2014.
Investor Education and Protection Fund
(Uploading of information regarding
unpaid and unclaimed amounts lying with
companies) Amendment Rules, 2014
[Reference No G.S.R(E) dated 27/03/2014]
In exercise of the powers conferred by sub-
section (1) of section 642 read with sub-section
(3) of section 205C of the Companies Act, 1956
(1 of1956), the Central Government had made
the Investor Education and Protection Fund
(Uploading of information regarding unpaid
and unclaimed amounts lying with
Companies) Amendments Rules, 2014,
effective from the 31st day of March, 2014.
In order to amend the Investor Education and
Protection Fund (Uploading of information
regarding unpaid and unclaimed amounts
lying with Companies) Rules, 2012 (hereinafter
referred to as the said rules):
1. In rule 2 of the said rule, after clause(a),
the following clause has been inserted
namely:
‘(aa) “corresponding new Bank”
means the corresponding new Bank as
defined in clause (d) of section 2 of the
Banking Companies (Acquisition and

16. 14
Transfer of Undertakings) Act, 1970 (5 of
1970)and clause (b) of section 2 of the
Banking Companies (Acquisition and
Transfer of Undertakings) Act, 1980.
2. In rule 3 of the said rules, after the
words, figures and letter, “section 205C
of the Act”, the following words, figures,
letter and brackets have been inserted
namely:
“and corresponding new Bank shall with in a
period of 90 days from the date of holding
their Annual General Meeting every year,
identify the money transfer to the Unpaid
Dividend Account in pursuance of section 10B
of the Banking Companies (Acquisition and
Transfer of Undertakings) Act, 1970 and section
10B Banking Companies (Acquisition and
Transfer of Undertakings) Act, 1980, which
remains unpaid or unclaimed for a period of
seven years from the date of such transfer.”
3. In Form 5INV annexed to the said rules,
for the word “company” wherever it
occurs, the words “company and
corresponding new Bank” shall be
substituted.
Investor Education and Protection Fund
(awareness and protection of investors)
Amendment Rules 2014
[Reference No G.S.R(E) dated 27/03/2014]
In exercise of the powers conferred by sub-
section (1) of section 642 read with sub-section
(3) of section 205C of the Companies Act, 1956
(1 of1956), the Central Government had made
the Investor Education and Protection Fund
(awareness and protection of investors)
Amendment Rules 2014, effective from the 31st
day of March, 2014.
In order to amend the Investor Education and
Protection Fund (awareness and protection of
investors) Rules, 2001 (hereinafter referred to as
the said rules):
1. In rule 2 of the said rules, after clause
(d), the following clause has been
inserted namely:
‘(da) “corresponding new bank” means the
corresponding new bank as defined in clause
(d) of section 2 of the Banking Companies
(Acquisition and Transfer of Undertakings) Act,
1970 (5 of 1970) and clause (b) of section 2 of
the Banking Companies (Acquisition and
Transfer of Undertakings) Act, 1980(40 of 1980):’
2. In rule 3 of the said rules, in sub-rule (i),
after the words “Any money required to
be credited by the companies to the
fund, as provided in the Act”, the
following shall be inserted, namely:
“and any money transferred to the
Unpaid Dividend Account of a
corresponding new bank in pursuance
of section 10B of Banking Companies
(Acquisition and Transfer of
Undertakings) Act, 1970 and section
10B of Banking Companies (Acquisition
and Transfer of Undertakings) Act, 1980,
which remains unpaid or unclaimed for
a period of seven years from the date
of such transfer”
3. In Form I annexed to said rules, for the
word “company”, wherever it occurs,
the words “company and

17. 15
corresponding new bank” shall be
substituted.
Nomenclature of various forms prescribed
under the provisions of Companies Act,
2013.
[Reference No: S.O(E) dated 27/03/2013]
In order to facilitate easy understanding of the
e-forms being rolled out under the provisions of
Companies Act, 2013 and Rules made
thereunder, the Ministry of Corporate Affairs
had notified the nomenclature of various forms
prescribed under the provisions of Companies
Act, 2013 that are mandatorily numbered
alpha-numeric unlike numbering of various
forms under the Companies Act, 1956. Initial of
forms is to be started with alphabet of two or
three letters based on the subject of the
Chapter, followed by serial number of the
form. This will define the nature of the forms
and would be easy to recognise.
Online payment of stamp duty and court
fee stamp for issue of certified copies
[General Circular No 5/2014 dated
28/03/2014]
With a view to identify and improve the
component causing delay in issue of certified
copies the Ministry has enabled payment of
Stamp Duty as well as Court fee online through
MCA Portal effective from 31st March, 2014.
Amount of Court Fee shall be added to the
MCA fee calculated by the system for getting
Certified Copies based on the State in which
the registered office of the company is
situated.
Stamp Duty for obtaining certified true copy
would also be paid electronically through the
system as per the existing process, which will
be calculated based on document, number of
copies requested and the State in which the
registered office of the Company is situated.
Roll out plan of various forms under the
Companies Act, 2013 and continuance of
forms under the provisions of Companies
Act, 1956
[General Circular No 6/2014 dated
28/03/2014]
In order to facilitate the completion of notified
sections the Ministry has planned a staggered
roll out of various forms. It has been decided to
waive fees for all event based filing whose due
date falls between 01/04/2014 to 30/04/2014.
For the same, a separate Circular will be being
issued by the Policy Cell of this Ministry.
From 01/04/2014 to 14/04/2014 except existing
e-forms mentioned in Table given herein below
no other e-forms will be available for filing.
Other Front office portal services will continue.
From 01/04/2014 to 13/04/2014 the period will
be used for clearing pending e-forms already
filed under the provisions of Companies Act,
1956.
Sl
No.
Old
form
Purpose of form
01 66 Form for submission of
compliance
certificate with the
Registrar
02 14LLP Form for intimating to
Registrar of
Companies of
conversion of the
company into limited
liability partnership
(LLP).
03 20B Form for filing annual
return by a company
having a share capital
with the Registrar

18. 16
04 21A Particulars of annual
return for the
company not having
share capital
05 23AC Form for filing balance
sheet and other
documents with the
Registrar
06 23ACA Form for filing Profit
and Loss account and
other documents with
the Registrar
07 23ACA-
XBRL
Form for filing XBRL
document in respect
of Profit and Loss
account and other
documents with the
Registrar
08 23AC-XBRL Form for filing XBRL
document in respect
of balance sheet and
other documents with
the Registrar
09 23C Form of application to
the Central
Government for
appointment of cost
auditor
10 23D Form for Information
by Cost Auditor to
Central Government
11 35A Information to be
furnished in relation to
any offer of a scheme
or contract involving
the transfer of shares
or any class of shares
in the transferor
company to the
transferee company
12 A-XBRL Form for filing XBRL
document in respect
of compliance report
and other documents
with the Central
Government
13 FTE Application for striking
off the name of
company under the
Fast Track Exit(FTE)
Mode
14 I-XBRL Form for filing XBRL
document in respect
of cost audit report
and other documents
with the Central
Government
15 5-INV Transfer unpaid
dividend amount to
IEPF
16 21 Order of the
court/authority till
14/04/2014
17 Refund Application for
requesting refund of
fees paid
18 Bank ACC Application for
simplifying bank
account opening
process as user shall
not be required to
submit any physical
application form.
19 Investor
Complaint
Form
Form for filing
complaint(s) against
the company
Table of Fees: Fee for filings etc. under
section 403 of the Companies Act, 2013
[Circular dated 01/04/2014]
Pursuant to rule 12 of the Companies
(Registration of Offices and Fees) Rules, 2014
the Ministry of Corporate Affairs had notified a
Table of fees for the documents required to be
submitted, filed, registered or recorded or for
any fact or information required or authorized
to be registered under the Act, within the time
specified in the relevant provision on payment
of such fee as provided in the said Table.
Commencement of provisions of the
Companies Act, 2013 with regard to
maintenance of books of accounts and
preparations/adoption/filing of financial
statements, auditors report, Boards report

19. 17
and attachments to such statements and
reports- Applicability with regard to
relevant financial year
[General Circular dated 08/2014 dated
04/04/2014]
Pursuant to the receipt of various requests for
clarification with regard to the relevant
financial year with effect from which such
provisions of the new Act relating to
maintenance of books of account,
preparation, adoption and filing of financial
statements (and attachments thereto),
auditors report and Board's report will be
applicable, the Ministry of Corporate Affairs
had clarified that the financial statements
(and documents required to be attached
thereto), auditors report and Board report in
respect of financial years that commenced
earlier than 1st April, 2014 shall be governed by
the relevant provisions/ Schedules/ rules of the
Companies Act, 1956 and that in respect of
financial years commencing on or after 1st
April, 2014, the provisions of the new Act shall
apply.
TRANSACTIONS THAT
MADE HEADLINES
 Diageo makes fresh open offer to buy
majority stake in United Spirits for up to
$1.9B
 Tata Steel selling Kiwi distribution arm
for around $24M
 OnMobile set to sell Voxmobili for up to
$26M
 Sun Pharma to buy Ranbaxy in $3.2B
all-stock deal
 Japan's Meidensha Corp buys 23%
stake in Prime Electric
 KEC sells its Thane land asset to Tata
Housing for $35M
 UPL sells entire stake in Brazilian
agrochemical JV for $59M
 Deal of the month: Taqa buying
Jaypee Group’s two hydro power
assets for $1.6B
 Facebook to buy virtual reality goggles
maker for $2B
 Oberoi Realty to buy land in Mumbai
from Tata Steel for $190M

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