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28.01.2016 - Voice of CA presents - Updates
Thursday, January 28, 2016

I. Headlines Today    

  1. FEMA Notification: Now residents can acquire immovable property overseas jointly with non-resident relatives, provided there is no outflow of funds from India  (Click for detail)
  2. Finance ministry may ask companies to pay advance tax in equal installments  (Click for detail)
  3. 200 SEZs likely to be exempt from 18.5 per cent MAT  (Click for detail)
  4. Apply GST on factory price of textiles Industry  (Click for detail)
  5. RBI shortlists 5 companies for audit and risk monitoring mechanism  (Click for detail)
II.  Useful Updates on Companies Act 2013: 
1. Central Govt. establishes Central Registration Centre for Reservation of Names under the Companies Act, 2016 w.e.f. 26th January, 2016 [Notification No.SO.218(E), and published in the Gazette of India Extraordinary, dated 22nd January, 2016]. 
Brief highlights of CRC are that it
  • has territorial jurisdiction all over India

  • is located at Indian Institute of Corporate Affairs [IICA], Plot No.6-7-8, Sector 5, IMT Manesar [Distt. Gurgaon, Haryana]

  • will process applications, in e-Form No.INC-1 alongwith prescribed fee, for reservation of name(s)

  • is under the administrative control of Registrar of Delhi [RoC, Delhi]

  • RoC, Delhi acts as Registrar, CRC [until appointment of separate registrar to CRC] 

Approval of name(s) proposed in e-Form NO.29 will continue to be processed by the respective Registrar of Companies having jurisdiction over incorporation of companies as per the provisions of, and the rules made under, the Companies Act, 2013.

(Please click here for related notifications)

2.  Amendments made to the The Companies (Incorporation) Rules, 2014, w.e.f. 26th January, 2016 [Notification dated 22nd January, 2016].

Highlights of these amendments, in brief, are :

Where the name proposed is —

  • not in consonance with the principal objects of the company [(ii) of clause (b) of sub-rule (2) of Rule 8]
  • vague [e.g. ABC Limited] or an abbreviated name [e.g. BMCD Limited (Bharat Mahesh Chandan and David)] [(x) of clause (b) of sub-rule (2) of Rule 8]

  • likely to produce a misleading impression regarding the scope or scale of activities [(xvii) of clause (b) of sub-rule (2) of Rule 8]

which, inter alia, were earlier considered undesirable, omitted

Similarly, the requirement of —

  • changing its name where any company changed its activities [to bring it in line with changed activities] 
    [sub-rule (3) of Rule 8]

  • ‘no objection’, where the key word used in the name proposed is of another person than that of the promoter etc., from that another person, or

  • ‘proof of relation’ where the name includes the name of a relative [sub-rule (4) of Rule 8]

has been done away with.  In other words, the above are now not relevant for approval etc. of a name.

Regarding submission of documents

  • one more opportunity to remove defects or deficiencies, as intimated by the Registrar.  In other words, an applicant will now have, in all, three opportunities, in place of the hitherto before two opportunities.
    [clause (ba) to sub-rule (12) of Rule 36 inserted]

(Please click here for related notifications)  



III.  Direct Taxes Case Law: 

1.   Abhishek Govil Vs. CIT, Income Tax Appeal No. 19/2016, Date of Order: 06.01.2016, High Court of Delhi

Whether maintenance charges received is taxable under the head Income from house property where a separate agreement is entered and TDS is deducted u/s 194C.

Held_ No

The assessee entered into two separate agreements with the lessee one for rental receipt and another for maintenance charges. TDS was deducted u/s 194-I on rental receipt and u/s 194C on maintenance charges. The AO contended that the receipts on account of the maintenance are taxable under the head of income from other sources. Whereas, the assessee contended that form of the agreements should be ignored and if the substance of the maintenance agreements is considered, it would be seen that the said agreements were not for purposes of rendering any service and the consideration payable pursuant to the said agreements, was in reality lease rentals.  

The Hon’ble High Court upheld the decision of the AO, CIT and ITAT and added that the lessee had deducted TDS on the said charges at the rate as applicable to payments made to contractors moreover a plain reading of the agreements also indicates that the said charges were payable as consideration for providing services mentioned therein. Thus, consideration received in respect of the said agreements could not treat as rental income. Appeal of the assessee was dismissed.

(Please click here for judgment)

 Golden Rules:

  "Our body is full of water
but whenever it hurts, blood comes out.
And our heart is full of blood
but whenever it hurts, water (tears) comes out"


  Thanks & Regards


Voice of CA 

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