Updates

Income-tax law is one of the most complex pieces of legislation in India and regular amendments with conflicting judicial views only add to the complexities. This article published on Taxmann delves into the controversy surrounding inclusion of current year profits in computing ‘accumulated profits’ under dividend provisions.

Reserve Bank of India (‘RBI’) vide A.P. (DIR Series) Circular No. 16 dated September 30, 20221 had revised the Late Submission Fee (‘LSF’) computation matrix for reporting delays under the Foreign Exchange Management Act, 1999 (‘FEMA’), to bring uniformity in imposition of LSF across functions.

Recently, Kolkata Tribunal in case of Koninklijke Philips NV held that interest on income-tax refund to the Netherlands based company was not taxable in India by application of beneficial provisions of India-Italy Tax Treaty pursuant to Most Favoured Nation clause in India-Netherlands Tax Treaty.

RBI had introduced Single Master Form (‘SMF’) vide A.P. (DIR Series) Circular No. 30 dated 7 June 2018, with an objective of integrating the reporting requirements of foreign investment in India. On 4 January 2023, RBI has released a circular for rationalizing the reporting of foreign investment on the Foreign Investment Reporting and Management System (‘FIRMS’) Portal.

The Competition Commission of India has imposed a provisional monetary penalty of Rs. 1,338 crores on Google for allegedly abusing its dominant position in multiple markets in the Android mobile device ecosystem and violating Indian competition laws. Further, the Commission has also issued cease and desist order against Google asking it to refrain from unfair business practices and directed it to modify its conduct within a defined timeline.

Recently, the Hon’ble Kolkata Tribunal held that provisions of section 56(2)(viib) of the Income-tax Act, 1961 shall be applicable upon conversion of Compulsory Convertible Debentures (CCDs) into equity shares. The Tribunal interpreted the term “receives any consideration” contained in section 56(2)(viib) to include consideration in all forms and is not limited to only ‘receipt of money’.