Chartered Accountants No Longer Allowed to Value Unquoted Shares
The Central Board of Direct Taxes (“CBDT”) via a notification dated May 24, 2018 has amended Rule 11 UA of the Income Tax Rules, 1962 which earlier authorised chartered accountants and merchant bankers to calculate the fair value of shares issued by closely held companies for the purpose of Section 56(2)(viib) of the Income Tax Act, 1961 (“IT Act”). Through this amendment, the word “or an accountant” has been omitted, thereby now permitting only merchant bankers to determine face value of shares issued by closely held companies.
CAIT Objects Against Flipkart-Walmart Deal to CCI
The Confederation of All India Traders (“CAIT”) has approached the Competition Commission of India (“CCI”) claiming that Walmart’s investment in Flipkart will create unfair competition and an uneven playing field for domestic players on account of predatory pricing and deep discounts. CAIT claimed that Walmart would sell its inventory on Flipkart either directly or through a web of associated preferred sellers which will result in unhealthy competition that will disadvantage both online as well as offline sellers.
Extension of Deadline for Suggestions to Task Force Set Up for New Direct Tax Law
The CBDT via a press release dated May 28, 2018 has extended the date for sending suggestions and feedback to the Task Force set up for the drafting of a new direct tax law to June 15, 2018.
The Task Force was constituted by the Government of India via an office order dated November 22, 2017 to review the existing IT Act and to draft a new direct tax law in consonance with the direct tax system prevalent in various countries, best international practises and economic needs of the country within a period of six months.