1 CBDT clarifies on classification of income from sale of shares as capital gains or business income
– Circular No. 6/2016 dated 29.02.16
In continuation to the earlier Instruction No. 1827, dated 31st August, 1989 and Circular No. 4 of 2007 dated 15th June, 2007 further clarifications have been provided by CBDT for considering income from sale of shares as Capital gains or Business Income as under:
i) If the assessee has treated the securities in his books as stock in trade, the same should be accepted
ii) In case holding period of the securities is more than a year and the assessee wants to treat it as a Capital asset, then the AO needs to accept it provided the treatment is consistently followed by the assessee in the subsequent years.
iii) In all other cases, the earlier mentioned Instructions and Circular be considered for determination of the nature of income.
iv) These guidelines would not apply to transactions the genuineness of which are questionable.
It is further clarified that these are broad guidelines and the determination needs to be based on the facts of the case.
2 Clarification by CBDT that the provisions of DTAA between India and UK would be applicable in case of a partnership resident in either state and its income be taxed either in the hands of the entity or beneficiaries/partners
– Circular No. 02/2016 dated 25.02.2016
3 CBDT has issued an Office Memorandum for clearing the pending refunds wherein the timeline for clearance laid down in Office Memorandum dated 29.01.2016 be reduced to 15 days for notices u/s. 245 of the Act valid till 31.3.16
– Office Memorandum dated 07.03.2016
4 CBDT extends the benefit of higher monetary limits laid down in Circular 21 of 2015 dated 10.12.2015 for filing appeals to Cross Objections filed by Department before ITAT and references made to the High Court u/s. 256(1) and 256(2) of the Act
– Letter No: F.No.279/Misc./M-142/2007-ITJ (Part) dated 08.03.2016
5 CBDT clarifies on the status of the EPC consortiums when to be treated as AOP –
Circular no. 7/2016 dated 7th March 2016
Certain broad parameters are laid down for NOT treating the EPC consortiums as AOP and thereby not taxing it as a separate entity:
i) Clear independence exists between each member in terms of responsibility, resources and risk for the scope of work defined for him.
ii) Each member earns profit/loss for his scope of work though all together can share contract price at the gross level for accounting convenience.
iii) R esources in terms of men and materials used by each member are under his risk and control parameters.
iv) There is no unified control and management of the consortium and common management is for administrative convenience and co-ordination.
v) Other facts and circumstances which point out that consortium is not an AOP.
It is further clarified that this Circular shall not be applicable in cases where all or some of the members of the consortium are Associated Enterprises within the meaning of Section 92A of the Act. In such cases, the Assessing Officer will decide whether an AOP is formed or not keeping in view the relevant provisions of the Act and judicial jurisprudence on this issue.
Guidelines for Implementation of Transfer Pricing Provisions – Instruction No. 15/2015, dated 16th October, 2015 replaced by Instruction No. 3/2016 dated 10th March 2016 ( full text available on www.bcasonline.org
6 CBDT reaffirms its view point of not adopting coercive action against payees for TDS which is not deposited by the payer and directs the AO to follow the Directives issued in letter dated 01.06.2015.
–Office memorandum – no: F.No. 275/29/2014- IT (B) dated 11th March 2016
