Jena & Company - Economic Corporate Law Practice

15/10/2022

13/10/2022

Section 194C(6) & (7) cannot be read together to attract section 40(a)(ia) disallowance

13/10/2022

Show-Cause Notice in Form GST DRC-01 issued without Personal Hearing is Invalid: Gujarat HC

05/03/2019

30/06/2017

Please do not expect more than this

26/01/2016

6 changes you must know for registration of company’s name under new Rules

The Govt. has notified the Companies (Incorporation) Amendment Rules, 2016 (‘Amended Incorporation Rules’). Now the process of reservation of name of companies has been simplified. Following changes have been made for ease of doing business in India:

1) Name of company need not to be in consonance with principal object:
Under extant norms, the company’s name was necessarily required to be in consonance with principal object, if such name resembled any object of company. Now as per the amended Rules the name of company will not be considered undesirable even if it is not in consonance with the principal objects of the company as set out in Memorandum of association. Let us understand this condition with the help of an example. Suppose if a company wants to opt its name as ‘ABC Builders Pvt. Ltd.’ then it is not necessary that its principal object should be related to construction and development only. Thus, now company is free to choose such name which is not in consonance with principal object.

2) Usage of vague or an abbreviated name:
Under the extant norms there was restriction on usage of vague and abbreviated name. How many of us knows about ANI Technologies Pvt. Ltd but if one would say ‘OLA’ then most us might have heard of it and even enjoyed its first free ride. ‘OLA’ could have registered its name containing ‘OLA’ if there was no such restriction on usage of abbreviated name. The Amended rules does away with restriction on usage of vague and abbreviated name. Now a company can use either vague or an abbreviated names such as 'ABC limited' or '23K limited' or 'DJMO' Ltd.

3) No need to change name on change in business activity:
As per the extant norms if any company has changed its activities which are not reflected in its name then it would be required to change its name in line with its activities. However, such requirement has now been done away with under the amended Rules.

4) Central registry to dispose of name reservation application:
Now an application for the reservation of a name made in INC.1 shall be approved or rejected by the Registrar, Central Registration Centre. Earlier, the authority to dispose application for reservation of name was with respective ROCs.

5) Additional opportunity to remove defects:
Now while going for the fast-track mode of incorporation the registrar can give third opportunity to company to remove such defects or deficiencies.

6) Usage of Name containing Name of other person:
Under the extant norms, in case the key word used in the proposed name of a company is the name of a person other than the name(s) of the promoters or their close blood relatives, then NOC from such other person(s) and the proof of relation were required to be attached, respectively. Now such requirement of furnishing NOC and proof of relation has been removed.

23/01/2016

No additional depreciation if manufactured goods were captively consumed for construction activity

Facts of the case:

a) The assessee was engaged in laying pile foundation on job work basis, which was required in construction activities.

b) Piling work was used to be done at the site itself by digging bores of required sizes and erecting concrete pipes inside the bore, hence, assessee purchased new machinery, which enabled him to fabricate piles of standard size.

c) He claimed additional depreciation under section 32(1)(iia) on machinery contending that the pre-cast or pre-fabricated piles manufactured by using the new machinery resulted in manufacture of new article or thing.

d) Assessing Officer rejected the claim holding that pile was constructed and it was not manufactured or produced and the business of civil construction would not amount to carrying on any manufacturing activity.

e) On appeal, the Commissioner (Appeals) upheld the disallowance. Assessee filed instant appeal before Tribunal:

Tribunal held in favour of revenue as under:

1) As per the provisions of section 32(1)(iia), the additional depreciation is allowed to an assessee engaged in the business of manufacture or production of any article or thing.

2) The production of prefabricated piles which would be used by the assessee in its business of piling would form part of construction activity and the said business could be considered to be a business of manufacture or production of an article or thing.

3) In civil construction contracts 'concrete slabs' are produced separately and they are then fitted at the required places. It does not mean that the civil contractor is manufacturing or producing the 'concrete slabs'.

4) Production of prefabricated piles, which would be used by assessee in its business of piling would formed part of construction activity whether piles were constructed inside bore at project site itself or at a different place by using machinery

5) Hence, assessee cannot be considered to be an assessee engaged in the business of manufacture or production of an article or thing. Thus, order of CIT(A) was upheld. Stefon Constructions (P.) Ltd. v. CIT - [2016] (Mumbai - Trib.)