Weekly Round-up on Tax & Corporate Laws | 30th Aug to 4th Sep

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  • Last Updated on 7 September, 2021

Weekly Round-up

This weekly newsletter analytically summarizes the key stories reported at taxmann.com during the previous week from August 30th to September 04th 2021, namely:

(a) The Amritsar Tribunal has ruled that a lower depreciation rate to apply on iPad as it is not a computer;

(b) CBDT notifies Rule to compute taxable interest on PF contributions exceeding threshold limits;

(c) Non-payment of bonus due to non-fulfillment of certain terms and conditions would be a pre-existing dispute: NCLAT;

(d) Exemption from Customs Duty on import of COVID-19 relief items further extended to 30th September 2021;

(e) Jharkhand High Court ruled that assessee can’t get immunity from coercive action, including arrest if he failed to appear before authority after dozens of summons;

(f) SEBI asks investors to link PAN with Aadhaar before September 30th, 2021;

(g) ICAI issues exposure draft of revised Guidance Note on Schedule III to the Companies Act, 2013.

1. ‘iPad’ may have some computing functions, but it isn’t a computer for higher depreciation: ITAT

The Amritsar Tribunal has ruled that the iPad is predominantly a communication device and not a computing device. Thus, the iPad is not eligible for the higher rate of depreciation as applicable on computers.


Assessee purchased an apple iPad during the year and claimed depreciation at the rate of 60%. The Assessing Officer (AO) held that comparing the technical specification reveals that the iPad has more similarities to an iPhone than a MacBook. iPhone and iPad share the same operating system, containing 2G/3G/4G connectivity and GPS. Whereas MacBook does not contain the same. Thus, primarily an iPad has a mobile phone feature. Further, the sim card and mobile network are available on an iPad and iPhone, not on MacBook. Based on this comparison, AO concluded that the iPad has more similarities with an iPhone and thus is a phone and not a computer. The CIT(A) upheld the order passed by the AO.

In contrast, the assessee contended that as an iPad performs the functions of a computer, it should be treated as a computer. Even otherwise, the size of the iPad is 9.7 inches with a weight of over 600gms. It is not practical to use it as a phone. It is pertinent to mention that the assessee’s iPad can make no cellular calls as per the specifications. Further, making a cellular call cannot be the determinative factor in deciding if a device is a computer or a phone. Phone calls can also be made using Skype or other such applications, even from desktop computers. If a device performs functions as described under the Information Technology Act, 2000 or defines a computer in common parlance, the device should be treated as a computer.


On further appeal, the Amritsar ITAT held that the predominant purpose of the iPad is communication, and it is not a computing device. Its main features are email, WhatsApp, Facetime calls, music, films, etc. Though the iPad may discharge some of the functions of computers, it is not a substitution for computers or laptops. In common parlance, the iPad is considered as communicating device with some additional features of a computer.

Further, apple stores do not sell the iPad as a computer device. Rather, it is selling it as communicating/entertainment device. Another reason the iPad can be held as a communication device is it has an IMEI number. Though the assessee had denied having an IMEI number, no concrete records have been produced on record in this regard. Accordingly, ITAT held that the iPad is not a computer, Hence, depreciation is applicable at a lower rate.

Read the Ruling

Also, Update yourself with the various Rulings of the ITAT, in the most authentic format.

See Taxmann’s Income-tax Tribunal Decisions – An Authorized Weekly of the ITAT

2. CBDT notifies Rule for to compute taxable interest on PF contributions exceeding threshold limits

The Finance Act, 2021 has amended Section 10(11) and Section 10(12) to provide that exemption shall not be available for the interest income accrued during the previous year on the recognized and statutory provident fund in the account of the person to the extent it relates to the contribution made by the employees more than Rs. 2,50,000 in the previous year. However, if such a person has contributed to a fund in which the employer does not contribute, a limit of Rs. 2,50,000 shall be increased to Rs. 5,00,000. The amount of such interest income shall be computed as per the prescribed rules.

The CBDT has notified Rule 9D to calculate the taxable portion of interest pertaining to the contribution made to a statutory or a recognized provident fund in excess of the threshold limit of Rs. 2.5 lakh or Rs. 5 lakhs, as the case may be. It provides that separate accounts within the provident fund account shall be maintained during the previous year 2021-22 and onwards for the taxable and non-taxable contribution made by the person.

Read the Notification

Also Read Taxmann’s Analysis on How to calculate the taxable portion of interest on PF contribution? (Read by more than 1,000 users)

3. Non-payment of bonus due to non-fulfillment of certain terms and conditions would be a pre-existing dispute: NCLAT

The appellant joined the corporate debtor as a senior manager in January 2017. He requested the corporate debtor to accept his resignation and relieve him by 31-01-2019. He was relieved with effect from 31-03-2019. The appellant, after that, sent three reminders requesting the corporate debtor to discharge the bonus for the financial year 2018-19, but no such payment was made.

The appellant applied for initiation of CIRP against the corporate debtor under Section 9. In reply, the corporate debtor stated that there existed a pre-existing dispute before the issue of notice under Section 8 regarding the bonus. According to the discussion between the parties, the appellant’s bonus was to be given to the appellant if certain conditions related to the extension of the notice period and execution of a retainership agreement were fulfilled by the appellant.

The corporate debtor claimed that the bonus was not payable to the appellant since those conditions were not fulfilled. The Adjudicating Authority held that there was a pre-existing dispute between the parties and, therefore, the CIRP application was to be dismissed.

On appeal, the Appellate Tribunal held that the observations of the Adjudicating Authority in the impugned order were not out of place. The appellant may be able to pursue his remedies in any other forum if enforceable under law. However, as far as provisions of the IBC are concerned, which are more concerned with the company’s resolution, there is no error in the impugned order to interfere in the appeal.

Read the Ruling

BUY NOW: Insolvency and Bankruptcy Law Manual With IBC Law Guide

4. Exemption from Customs Duty on import of COVID-19 relief items further extended till 30th September

Earlier, the CBIC has provided relief by way of extending exemption from customs duty on import of COVID-19 relief items such as medical oxygen, its storage tanks, concentrators, ventilators, COVID-19 Vaccines, etc. This exemption was issued by way of Notification No. 28/2021-Customs dated April 24th, 2021.

This exemption was available till July 31st, 2021, and the same was extended till August 31st, 2021. Now, CBIC has further extended this exemption on Custom Duty for import of COVID-19 relief items till 30th September 2021.

Read the notification

Watch the Video

5. Assessee can’t get immunity from coercive action including arrest if he failed to appear before authority after dozens of summons: Jharkhand HC

The Jharkhand High Court held that an individual avoiding appearance before the authority would not get immunity from coercive action by the authority, including arrest. The High Court gave this ruling in the case of Directorate General of GST Intelligence v. Pankaj Agarwal.


The petitioner-Directorate General of GST Intelligence filed a petition before the High Court and submitted that in flagrant violation of directions issued by the High Court, the assessee did not appear before him and had failed to submit necessary documents and other evidence. It was also submitted that the petitioner was reluctant to proceed against the assessee because of observation of the writ Court that he shall not be arrested on the first date of his appearance before the Senior Intelligence Officer.

High Court

The High Court observed that the Directorate has misread and misconstrued the order of the Court. The Court formed an opinion on a conjoint reading of Sections 69 and 70 of the Central Goods and Services Tax Act, 2017 that the Senior Intelligence Officer is not authorized to arrest an individual to whom he had issued a summon on the first date of his appearance. It was certainly not the import of Section 69 read with Section 70 that an individual avoiding appearance before the authority without any just excuse can claim that even if he appears after a dozen summons, the authority cannot take coercive action against him, including his arrest. Therefore, it was held that the assessee would not get immunity from coercive action, and the Directorate can proceed in the matter in accordance with the law.

Read the Ruling

Buy Now: Taxmann’s GST Search Seizure Summon & Arrest

Also, Refer to Taxmann’s GST Investigations Demands Appeals & Prosecution

The SEBI has asked investors to link PAN with Aadhaar number by September 30, 2021, for continual and smooth transactions in the securities market and to avoid any consequences of non-compliance of CBDT notification G.S.R 112(E) dated February 13, 2020. As per the CBDT notification, the Permanent Account Number (PAN) of a person allotted as on 01-07-2017 shall become inoperative if it is not linked with Aadhaar by September 30, 2021, or any other date specified by CBDT.

SEBI has also asked market intermediaries to ensure compliance with the said notification. “Since PAN is the sole identification number for all transactions in the Securities Market, in view of the said CBDT notification, all SEBI registered entities including Market Infrastructure Institutions (MIIs) should ensure compliance of said notification and accept only operative PAN (i.e., linked with Aadhaar number) by the client while opening new accounts post-September 30, 2021 or any other date specified by CBDT,” said SEBI.

Read the Press Release

Also Read: Taxmann’s FAQs on Aadhaar-PAN Linking

7. ICAI issues exposure draft of revised Guidance Note on Schedule-III to the Companies Act, 2013

The Ministry of Corporate Affairs (MCA) has enhanced the various disclosure requirements for financial reporting by amending Schedule III to the Companies Act, 2013. The changes were made applicable from 1 April 2021.

Schedule III provides the format of the financial statement and the minimum disclosure requirements that need to be complied with. In recent years, there have been significant changes in the reporting requirements by the auditors, but no such corresponding changes were made in the financial reporting framework of an entity. These amendments have drastically increased the disclosure norms for financial statements and strengthen their transparency and governance.

The preparers of the financial statements and practitioners might need detailed guidance on dealing with the various issues that may arise during the implementation of Schedule III. Considering the situation, the Corporate Laws and Corporate Governance Committee of the ICAI has issued an exposure draft of the revised Guidance Note under three divisions of Schedule III to the Companies Act.

The main objective of the issue of the guidance note is to provide guidance in the preparation of financial statements in accordance with the various amended aspects of Schedule III. This note includes changes to the presentation and disclosure of financial statements under three divisions:

Division I – Guidelines for entities whose financial statements are required to comply with the Companies (Accounting Standards) Rules, 2006.

Division II – Guidelines for entities whose financial statements are required to comply with the Companies (Indian Accounting Standards) Rules, 2015.

Division III – Guidelines for Non- Banking Financial Companies (NBFCs) whose financial statements are required to comply with Companies (Indian Accounting Standards) Rules, 2015.

The Stakeholders are requested to submit their comments by 10 September 2021.

Read the Story

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