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www.vasai-icai.org JULY - AUGUST 2012

VASAI BRANCH OF WIRC

NEWSLETTER


NEWSLETTER


NEWSLETTER

Members

Only

The Institute of Chartered Accountants of India

The Institute of Chartered Accountants of India Vasai Branch of WIRC NewsletterJul - Aug 2012

02

GLIMPSES AT DATED 30TH JUNE & 1ST JULY, 2012 ICAI-NATIONAL STUDENTS’ CONVENTION

MANAGING COMMITTEE

EDITORIAL BOARD

CA Shweta Jain CA Ramanand Gupta CA Kishor Vaishnav CA Unmesh NarvekarChairperson Vice-Chairman Treasurer Imm. Past Chairman

CA Lalit Bajaj CA Pramod Dhamankar CA Haresh Mehta CA Ashok JainPast Chairman Past Chairman Committee Member WIRC Nominee

CA Shweta Jain CA Haresh Mehta CA Lalit Munoyat CA Hemant Shah CA Kamal Sharma CA Alpesh Shah CA Dushyant Chaudhary CA Anil Kabra CA Vikas Soni CA Haresh Kenia CA Prasad Chitre

Secretary &

Ms. Shilpa Verma Mr. Srinivas Anand Sriram Ms. Bhawana Jhawar Mr. Nikhil Chhabra Mr. Milind Joshi

Mr. Chirag MehtaMs. Mrunal KarveMs. Pooja RamkrishnanMs. M. Sabira Khojia Ms. Bhakti Tanna

Mr. Anil Kumar Reddy

Mr. Ashay Upadhayay

Ms. Purvi Porwal

Mr. Sahil Gupta

Ms. Kushboo Mehta Ms. Srija Shetty

Ms. Niddhi Kothari

Ms. Uzma Mandlik

Ms. Piyali Chatterjee

Ms. Vasudevan CR

Ms. Sarah Balasundaran

Mr. Dhruv Goyal Mr. Sukrut Sawarkar

CA T. N. ManoharanPast President-ICAI

CA Nilesh VikamseyChairman BOS-ICAI

Session Chairmen

CA N. P. SardaPast President-ICAI

CA Amarjeet ChopraPast President-ICAI

Shri Vijay KapurDirector - Board Of Studies

CA B. R. JajuDirector & CFO - Welspun Corp. Ltd

CA Madhukar HiregangeVice Chairman, Board of Studies

CA Uttam Prakash AgarwalPast President-ICAI

Paper Presenters

03

FROM CHAIRPERSON’S DESKMy Dear Professional Colleagues,

"Chartered Accountants: Partners in National Development" —

These words of acknowledgement and recognition used by visionary

former President of India Dr. A. P. J. Abdul Kalam for the Chartered

Accountant fraternity amply sums up the great role, power and

potential of the Accountancy profession in the country.

Now let me take this opportunity to extend my sincere wishes to all,

on the occasion of Chartered Accountants Day. I would like to wish

you all the very best in your future profession as Chartered

Accountants, Sixty three years back, on this day India witnessed the

enactment of the Chartered Accountant Act, 1949.

The first ever I would like to present gratitude to CA Jaydeep Shah,

President of ICAI and CA Subodh Agarwal, Vice President of ICAI and

also CA Nilesh Vikamsey Chairman, Board of Studies for giving us an

opportunity for organizing National Convention for CA Students for

the first time in the History of Vasai Branch of WIRC of ICAI. We will

also endeavour to hold such more events so will always look upon

you for gratefulness.

I believe, if we begin with humility, we will conclude with some

sustainable achievement. It is not strange that, with a humble

beginning, we always discover an infinite scope of opportunities and

possibilities. Let me say if we start with openness, conditions will

turn conducive themselves. This I can simply relate to the National

convention which was organized by us. Here the glimpses of it…. In

the absence of CA Jaydeep Shah, President Of ICAI and CA Subodh

Agarwal, Vice President of ICAI the Convention was inaugurated by

Padmashree CA T N Manoharan, Hon’ble Past President of ICAI and

CA Nilesh Vikamsey Chairman, Board of Studies. It drew many

speakers from the various parts of our nation. Our technical &

special sessions were enlightened further by the august presence of

luminary dignitaries (including Past Presidents of ICAI).

My heart fills with pride in acknowledging the efforts, enthusiasm

and perseverance of those who were committed to create the

presence of such wonderful event and make it a success and mark of

professional triumph. Because of their continuous and relentless

efforts of all the Affiliates, CA aspirants ,my team and Vasai WICASA

Team we have been able to come this far in the journey we

embarked upon a to continue.

Conferences & Conventions and other events in the same lineup

organized by our esteemed Institute is golden opportunities

to unleash the hidden potentials within students. Further our

Institute has launched new scheme of General Management and

Communication Skills (GMCS). I am sure the new Scheme of GMCS,

I and GMCS II with its contemporary courseware will help in the

professional development and advancement.

Our Vasai branch is also taking the initiative in the same line by

organizing on 14th and 15th of July 2012 Youth Festival and Quiz &

Elocution Competition respectively. By participating in the contest,

students will get motivated to study various topics in greater detail

and thereby it will improve their performance in the examination,

apart from improving their communication skills. The Quiz &

Elocution contests conducted in the past have witnessed very

enthusiastic response and participation. It is therefore proposed to

organize this contest this year also.

Vasai branch is also going to host Video profiling for CA community

and newly qualified Chartered Accountants, the objective of the

Video CV is to increase the visibility of CA final year students in front

of the recruiters, break the barriers of distance and location and

provide wider range of career options. It also helps in enhancing the

communication skills & bolstering the confidence levels of students.

Interested participants are requested to enroll for the same with the

branch.

Vasai Branch is always concern to provide platform as a perfect

medium for our members to hone their professional skills on a wide

variety of specialized areas of practice. These also provide

opportunities for members to be exposed to new and emerging

areas of practices I am sure all these seminars and other events will

attract and benefit even greater number of members in days to

come, particularly in the backdrop of plethora of opportunities being

offered in current globalised economy.

Branch is also organizing many programmes & seminars in the

upcoming months and current month itself and we have successfully

accomplished the goal of completion of our first certification course

on Indirect Taxes. We are grateful to ICAI for providing us an

opportunity, we have also completed a Seminar on Service Tax

Amendments on 7th July, was organized by WIRC and hosted

together by Vasai Branch & Vasai Virar CPE Study Circle, at Lions

Club Hall at Palghar. I acknowledge the unwavering support of WIRC

for giving us the opportunity to host this programme. I am also

grateful to all members and participants for their presence and

making these both events successful.

Since Tax laws in India are becoming more and more complex and

more so in the case of indirect taxes. Frequent changes in taxation

through Finance Acts, Notifications and Circulars are one of the

significant features of Indian tax laws. Appreciating these increasing

complexities and changing facade of indirect taxes, branch is

organizing the Six days Intensive Course on MVAT, C.S.T. & Allied

Laws in the month of August.

Also there is Lecture Meeting on SME in the month of August, as such

programmes will assist the present and prospective entrepreneurs

in their business growth. In India since, SMEs are making

tremendous progress and are getting more and more opportunities

to enhance their activities and expand & diversify their business in

core sectors.

Today, I feel very proud to have been a part of such a flourishing

branch. This will continue with the expansion, innovation and

growth of the association as a unit as it sets new benchmarks for the

future and I must mention that the success of the branch is directly

proportional to the support which it derives from its members. This

confidence motivated us to look beyond our horizons & take you

around the world. With this intention & experience of last four

IRRCs. This time Vasai Branch has planned to take you at Mauritius a

Premium Destination in the world famous for the Beaches. I expect

the same support and enthusiasm even for this IRRC too.

We look forward for your same support in future also.

As CA results are going to be declared. Wishing you all the blissful

result, and further conclude with, Some will clear and some will not,

Never lose hope, come again and combat,

All my good wishes are with you everyone all the best for the

18th July mission.

“Pursue your goal, even in the face of difficulties. Convert

difficulties into opportunities.”

With warm

Professional Regards

Chairperson

CA. Shweta Jain

The Institute of Chartered Accountants of India Vasai Branch of WIRC Newsletter Jul - Aug 2012

The Institute of Chartered Accountants of India Vasai Branch of WIRC Newsletter

04

FORTHCOMING PROGRAMMES

Date Seminar on Timings Venue Speakers Co-ordinators Fees CPE

FORTHCOMING PROGRAMMES FOR STUDENTS

FORTHCOMING PROGRAMMES OF BHAYANDAR STUDY CIRCLE

FORTHCOMING PROGRAMMES OF VASAI VIRAR STUDY CIRCLE

1, 2, 3, 6, 7, Intensive Course 5.30 p.m. Hotel Haridwar CA Amar Shukla CA Haresh Mehta ` 2200/- for 188 August, on MVAT, C.S.T & to Vasai West. CA Deepak Thakkar 9823137477 Members and 2012 Allied Laws 9.00 p.m. CA Rajat Talati CA Pramod Dhamankar Students.

CA Dilip Phadke 9987155522 ` 3000/- for CA Kiran Garkar OthersCA Bharat Gosar

4th August, Information System 9.30 a.m. IIPS Centre Eminent Speaker CA Pramod Dhamankar ` 17,500 100to 9th Sept, Audit (ISA) to Mira Road (E) 99871555222012 (6 CA Lalit Bajaj - Weekends) 9867692321

CA Unmesh Narvekar9821236179

15th August, IRRC - Matters in - Mauritius CA Anu Agarwal CA Lalit Bajaj - 9867692321 ` 65,000 9to 19th International Taxation CA Pramod DhamankarAugust,2012 9987155522

25th August, Lecture Meeting on 6.00 p.m. Hotel Veg Sagar, Mr. Ravi Tyagi, CA Lalit Bajaj - 9867692321 Free 32012 SME Listing to Nr. Maxus Mall, Chief Guest Amar Kakaria - 9987512101

9.00 p.m. Bhy(W) Mr. Swapnil Mahajan

8th July, Lecture Meeting on 6.00 p.m. Reliable Classes, Eminent Speaker CA Unmesh Narvekar ` 200/- 3September, Corporate Compliance to Mira Road (E) 98212361792012 9.00 p.m. CA Ramanand Gupta

9322231113


22nd July, Video Profiling for 9.30 a.m. Branch Premises - CA Ramanand Gupta ` 750/- -2012 Newly Qualified CA onwards 9322231113


22nd July, Revised Schedule VI 10.00 a.m. Hotel Zaika, 150 Eminent Speaker CA Nitesh Kothari - 32012 to Ft. Rd., Nr. Maxus

Mall, Bhy (W)


4th August, Tax Audit with Tally Ref to 4.00 p.m. Hotel Kubera Eminent Speaker CA Rajesh Kotak - 32012 3CD Speaker & other Anx. to 7.00 p.m. 9561330333

18th August, Issues in Tax 4.00 p.m. Hotel Kubera CA Atul Suraiya CA Aashutosh Vidhvans - 32012 to 7.00 p.m. 9322272878

8th Sept., Issue in Vat Audit Form 704 4.00 p.m. Hotel Kubera Eminent Speaker CA Rajesh Kotak - 32012 to 7.00 p.m. 9561330333

5.30 p.m.

98338608701.00 p.m.

Jul - Aug 2012


05

FORTHCOMING PROGRAMMES & SCHEDULE

INTENSIVE COURSE ON MVATCPE

18 Hrs

Venue Hotel Haridwar,

Timings 5.30 pm. to 9.00 pm.

FEES ` 2200/- for Members and Students. ` 3000/- for Others(Including Course Material, Tea and Dinner)

Co-ordinators CA Haresh Mehta - 9823137477

CA Pramod Dhamankar - 9987155522

Date Topic Speakers

1st August 2012 Introduction, Definition, CA Dilip PhadkeRegistration, Levy of Taxes, incl Schedules

2nd August 2012 Exemptions, Set Off Rules, CA Kiran Garkar(incl judgements of Mahalaxmi Traders-Bbay H C) Tax Invoice

3rd August 2012 CST, Branch & Consignment CA Amar ShuklaTransfer, Sale in Transit, HighSea Sale, Various forms, returns under CST Acts - S. S 52,53,54,55, Rule86 Profession Tax Act, Luxury Tax

6th August 2012 Maintenance of Books, CA Deepak ThakkarRecords & Audit.Search & Survey

7th August 2012 Composition Schemes - CA Bharat GosarTaxation of Works Contract (incl judgementson BAI of Bbay HC)

8th August 2012 Returns, Periodicity & CA Rajat TalatiE-filing of Forms &Procedural Issues.Assessment, Review,Rectification, Appeals,Interest, Penalty &Brain Trust

Vasai (W)

PROGRAM SCHEDULE

Dates 4th August to 9th September 2012(For 6 weeknds, Every Saturday & Sunday)

Venue IIPS Centre, Mira Road (East)

Timings 9.30 a.m. to 5.30 p.m.

Speakers Eminent

Fees ` 17500/-

Co-ordinators CA Pramod Dhamankar- 9987155522

CA Lalit Bajaj- 9867692321

CA Unmesh Narvekar- 9821236179

POST QUALIFICATION COURSE ON INFORMATION SYSTEM AUDIT (ISA)

CPE100 Hrs

Dates Saturday, 25th August,2012

Venue Hotel Veg. Sagar ,Near Maxus Mall, Bhayendar West

Timings 6.00 p.m. to 9.00 p.m.

Fees Free for All

Chief Guest Mr. Ravi Tyagi, Head-NSE EMERGE

Co-ordinators CA Lalit Bajaj- 9867692321

CA Amar Kakaria-9987512101

Timings Topics Speaker6.00pm to 6.15pm Registration

6.15 pm to 6.45pm Welcome address, Mr. Ravi TyagiSpeech by Chief Guest (Head-NSE EMERGE)

6.45pm to 7.45pm SME Banking Eminent Speaker

7.45pm to 8.00pm Tea Break

8.00pm to 9.00pm Practical & Regulatory Swapnil MahajanAspects for Listing on (Senior - Manager –SME Exchange Karvy Merchant Banker)

CPE3 Hrs

LECTURE MEETING ON SME LISTING

Jul - Aug 2012

INTERNATIONAL RESIDENTIAL REFRESHER COURSE


06

Meet the Fantastic Natural Beauty

with

Exotic Sea Shores & Great Sight Seeing

Mauritius has No Boundaries

Meet the Fantastic Natural Beauty

with

Exotic Sea Shores & Great Sight Seeing

Mauritius has No Boundaries

From Wednesday, 15th August, 2012to Sunday, 19th August, 2012 (4N—5D)

CPE09 Hrs

Only For Rs.62800/-* per person, only for first 30 participants.Thereafter Rs. 65000/- till 40 seats

*Co

nd

itio

ns

Ap

ply

CA Shweta JainChairperson– Vasai Branch Past Chairman-Vasai Branch Past Chairman, Vasai Branch9920737198 9867692321 9987155522

CA Lalit Bajaj CA Pramod DhamankarProgramme Chairman Programme Co-ordinators

PremiumDestinationin the World

Stay in 4 Star comfortable and Luxurious Hotels.Seats are limited. Enrolment on First cum First serve basis.So hurry up & reserve your seat right now.

Mauritius: Double Tax TreatiesCompany Formation at MauritiusInvestment Opportunities in Mauritius

Speaker :

VASAI BRANCH OF WIRC – 65568900

Conference Subject:-

Contact:

CA ANU AGARWAL

Jul - Aug 2012


07

Manage Your Team & your work more effectively with the

following principles.

1. Try to know what Your Team Wants from You

Followers consistently expect their boss to show five qualities:

• Vision

• Ability to motivate

• Decisiveness

• Good in crises

• Honesty and integrity

2. Have a clear Vision: Setting up a Direction

Do Not Predict the Future, Create the Future:

You have to give your team a sense of direction and purpose. You

can do that by telling them a simple story about your direction:

• This is where we are.

• This is where we are going, and

• This is how we will get there.

3. Learn How to Motivate Your Team

Your team will feel well motivated if they:

• Work for a worthwhile cause

• Have a meaningful role

• Feel supported in their role

• Have good colleagues

• Are recognised for their efforts

• Feel secure as a member of the team

4. Learn about Handling Crises

The principles of crisis management are well known;

a) Act fast. Don’t worry about the things you cannot control: you

cannot control them. Focus on what you can do and do it. Even if

it is a small thing, it builds momentum and builds confidence.

b) Be positive. Followers hate fear, uncertainty and doubt. Be

confident and they will happily follow. Do not worry if you take

some missteps: you can always change direction later. The

important thing is to keep up momentum.

c) Get help. You cannot do it all yourself, so get help from anyone

and everyone who can help you. Do not simply ask your boss for

general help: that is called delegating upwards, or giving up.

5. Setting Targets

When you set goals they should be SMART. This is what SMART

stands for:

• S – Specific

• M – Measurable

• A – Achievable

• R – Relevant

• T – Time bound

6. Build Your Trusted Network

You can think of trust as a simple formula:

T = (VxC)/R

To put this into English:

Trust (T) increases in proportion to Values Alignment (V) and

Credibility (C), but decreases in proportion to the perceived Risk

(R) of the situation.

7. Handling Bad News

Here is how to handle the inevitable setbacks which will happen

to you:

• Accept responsibility.

• Offer a solution.

• Act fast.

• Communicate early.

• Stay positive.

8. The Art of a Good Meeting

A good meeting will answer four questions positively for each

attendee:

1. What will I/we do differently as a result of this meeting? This is

normally the result of decisions being made. If you see an agenda

item which looks like it might go the wrong way for you, do not

fight the battle in the meeting. Fight it in private beforehand.

2. What progress have I made on my personal agendas at this

meeting? The informal agenda can be as useful as the formal

agenda. Use the few minutes before and after a meeting to work

your personal agenda with any hard-to-get executives you need

to talk to. If necessary, simply set up a meeting with them for

later.

3. What did I learn at this meeting? Meetings are a good way of

gathering intelligence about people and priorities. If you go to a

client meeting with a colleague, always debrief together

immediately afterwards so that you can maximize your combined

learning from the meeting.

4. What did I contribute? If you have nothing to contribute, do not

go. Just because senior executives are there, avoid the

temptation for ¯face time . If you are like a good child and you

are seen, not heard, you will be treated like a child: you will be an

irrelevance.

9. How to Get Promoted

1. Build a claim to fame. You need to have some stand-out

achievement. It is not enough to have beaten budget and shown

great personal skills: everyone else will be able to make the same

claim. You need to have sorted out a crisis, led some landmark

initiative, done something that makes people take notice.

2. Make moments of truth work for you. There are set piece events

where you are on display to top management: this is where they

will form their opinions. So if you have a speech or a presentation

to make, overinvest in it. If you need to get a speech coach, get

one. Appearances count.

3. Build the right image. Even if top bosses are not familiar with the

details of what you have really achieved, they will be familiar with

you as a person. If you are always positive, volunteering to help out and action-focused you will do far better than the technically

excellent colleague who is always a bit dour, cautious and

occasionally cynical. You cannot fake this. But you can work in

places that bring out the best in you, and you can focus on always

presenting your best face to the firm.

10.What Your Boss Wants From You

You will be judged not just on what you do, but on how you do it. I

have asked thousands of bosses what they expect from their

teams, and here is what they said:

• Reliability

• Ambition

• Proactive

• Intelligence

• Hard work

11.Manage Your Boss

Four principles lie at the heart of managing your boss well, and all

have been covered so far. You need to bring them together for

your boss:

1. Deliver on your formal commitments: budget, MBO,

development plan as appropriate.

2. Adopt the behaviour of a good team member: reliability,

ambition, proactivity, intelligence and hard work.

3. Build trust. Without trust, there is no relationship. Remember

that trust has three elements:

• Values alignment: always be loyal, sing the same tune as your

boss

• Credibility: always deliver, so manage expectations well.

• Manage risk: over communicate, flag bad news early, avoid

surprises.

4. Adapt your style to suit your boss. In practice, your boss has the

¯right style, in the sense that you have to adapt your style

because your boss won’t adapt their style to yours.

NEW RULES FOR MODERN MANAGERS— Compiled by CA Ravi Jain | e-mail: [email protected]

Jul - Aug 2012

DIRECT TAX — Compiled by Haresh P. Kenia |e-mail: [email protected] | 9821351838

�ISSUANCE OF TDS CERTIFICATES IN FORM

16ADOWNLOADED FROM TIN WEBSITE {206

TAXMANN 112 )}

Circular No. 01/2012 [F.No. 276/34/2011-IT(B)] Dated

09/04/2012

The CBDT has issued certain administrative clarifications

throughthis circular.

�GUIDELINES FOR ENGAGEMENT OF STANDING

COUNSELS TO REPRESENT THE INCOME TAX

DEPARTMENT BEFORE HIGH COURTS AND OTHER

JUDICIAL FORUMS; REVISION OF THEIR SCHEDULE OF

FEES AND RELATED MATTERS {206 TAXMANN 116

(ST.)}

Instruction No. 3/2012 [F.No. 279/MISC/M-75/2011-ITJ]

dated 11/04/2012

Detailed revision on above subject matter, after

consolidating all the earlier instructions can be found at

above citation.

�INCOME TAX (FIFTH AMENDMENT) RULES, 2012 –

INSERTION OF RULE 2F { 206 TAXMANN 157 (ST.)}

Notification No. 16/2012 [F.No.149/72/2011-SO(TPL)]

dated 30/04/2012

Guildelines for setting up an infrastructure Debt Fund for

the purpose of exemption U/s. 10(47) has been provided by

inserting Rule 2F.

�FINANCE MINISTER’S SPEECH ON FINANCE BILL, 2012

{206 TAXMANN 160 (ST.)}

Press Release dated 07/05/2012

After presenting the Union Budget for the year 2012-13 on

16th March, 2012, Hon. Finance Minister – Shri Pranab

Mukherjee has made certain amendments in the Finance Bill,

2012. His speech while presenting the amendments can be

found at above citation.

�FINANCE ACT 2012 RECEIVES PRESIDENTIAL

ASSENT

Finance Act 2012 has received Presidential assent on 28th

May, 2012.

RECENT - Complied

by CA Hemant R. Shah e:mail: [email protected] | 9869011148

LAW UPDATES

CASE LAWS

RECENT SUPREME COURT DECISIONSACIT vs. Tulip Star Hotels Ltd (Supreme Court)

Section 36(1)(iii): S.A.Builders 288 ITR 1 (SC) to be

reconsidered

The assessee borrowed funds and used it to subscribe to the

equity capital of its subsidiary company. The subsidiary

company used the said funds for the purpose of acquiring the


08

Centaur Hotel, Juhu Beach, Mumbai. The assessee paid interest

on the borrowed money and claimed that a deduction U/s

36(1)(iii). The AO rejected the claim though the CIT (A),

Tribunal & High Court (338 ITR 482) allowed it by relying on

S.A.Builders Ltd vs. CIT 288 ITR 1 (SC).

It was held that as the assessee, being a holding company had a

deep interest in its subsidiary, and hence if the holding

company advanced borrowed money to a subsidiary and the

same is used by the subsidiary for some business purposes, the

assessee would be entitled to deduction of interest on its

borrowed loans. On appeal by the Department, it was held by

the Supreme Court that such interest is allowable U/s

36(1)(iii).

CIT vs. Cargil Global Trading Pvt. Ltd. (Supreme Court)

Section 194A TDS: Discounting charges is not “Interest”

The assessee paid Rs.3.97 crores to an associate concern in

S ingapore on account of d iscounted charges for

getting the export sale bills discounted. The AO held that the

discounting charges was “interest” U/s 2(28A) and that

as there was no TDS, the expenditure had to be disallowed U/s

40(a)(i). This was reversed by the CIT (A) and Tribunal. The

High Court [335 ITR 94 (Del)] relied on Circular No.65 dated

02/09/1971, Circular No.674 dated 22/03/1993 & Vijay Ship

Breaking 219 CTR 639 (SC) held that as the discounting

charges were not in respect of any debt incurred or money

borrowed and were merely discount of the sale consideration on

sale of goods, it was not “interest” U/s 2(28A) and there was no

obligation to deduct TDS thereon. On appeal by the Department

to the Supreme Court confirmed the decision of the view taken

by the Delhi High Court.

CIT vs. De Beers India Minerals Pvt. Ltd (Karnataka

High Court)

To “make available” technical knowledge, mere

provision of service is not enough; the payer must be

enabled to perform the service himself

The assessee, engaged in prospecting and mining for diamonds

entered into an agreement with a Netherlands company for

conducting air borne survey and providing high resolution

geophysical data. The AO held that the consideration was

chargeable to tax as “fees for technical services” under Article

12 of the India-Netherlands DTAA and held the assessee liable

U/s 195 & U/s 201 for failure to deduct TDS. This was reversed

by the CIT (A) & the Tribunal on the ground that though the

Dutch company had performed services using technical

knowledge and expertise, such technical experience etc. had

not been “made available” to the assessee. On appeal by the

Department to the High Court, the Karnataka High Court

dismissed the appeal filed by the Revenue and upheld the view

taken by CIT(A) and the Tribunal.

CIT vs Sahara India Housing Corporation Ltd. (Delhi HighCourt

Objective tests to classify shares gains as STCG vs. biz

profits laid down:

The assessee offered gains from sale and purchase of securities

as “capital gains”. The AO assessed it as business profits on the

ground that in the earlier years, it was offered as such.

The CIT (A) & the Tribunal accepted the assessee’s plea

on the ground that the securities were shown as “investments”

in the accounts and in the earlier years, the STCG was offered as

business profits as there was no difference in the tax rate.

On appeal by the Department, the Delhi High Court

upheld the view taken by the AO and reversed the Tribunal on

the following guidelines:

There was a dispute whether in the earlier years, the gains were

offered as business profits or as capital gains and the Tribunal

RECENT HIGH COURT DECISIONS

Jul - Aug 2012


09

had not given a clear finding. The Tribunal ought to examine the

issue holistically keeping in mind the parameters/tests laid

down in CIT vs. Rewashanker A. Kothari 283 ITR 338 (Guj)

and CBDT’s Circular No.4/2007 dated 15th June 2007 on

when income from transactions in securities should be treated

as “business profits” and when as “capital gains”:

(a) Whether the initial acquisition of the subject-matter of

transaction was with the intention of dealing in the item

or with a view to finding an investment;

(b) Why and how and for what purpose the sale was

effected subsequently;

(c) How the assessee dealt with the subject-matter of

transaction during the time the asset was with the

assessee. Has it been treated as stock-in-trade or as an

investment in the Balance Sheet;

(d) How the assessee returned the income from such

activities and how the Department dealt with the same in

the preceding and succeeding assessments;

(e) Whether the Deed of Partnership or Memorandum of

Association, if the assessee is a firm or a company,

authorises such an activity;

(f) Most importantly, what is the volume, frequency,

continuity and regularity of transactions of purchase and

sale of the goods concerned;

Mehru Electrical & Engg. (P) Ltd. vs. CIT (Rajasthan High

Court)

Despite “Last Chance”, Appeal should be adjourned if

there is sufficient cause

The Department’s Appeal was adjourned at the assessee’s

request to 09/02/2010 and it was made clear that it would be

the “last opportunity”. The assessee’s Counsel filed an

application for adjournment on 08/02/2010 on the ground that

he was going to Mumbai for some urgent work. On 09/02/2010,

no one appeared for the assessee and therefore the Tribunal

rejected the adjournment application and allowed the

Department’s Appeal. On appeal by the assessee, the High

Court allowed the Appeal to the Assessee.

Ordinarily, it is not incumbent on the Tribunal to adjourn the

case when a last opportunity had already been granted to the

assessee. However, there may be number of circumstances

where adjournment becomes necessary in the interest of

justice. If the Counsel for assessee had to go for some urgent

work to Mumbai and an application for adjournment was moved

in advance, then in the interest of justice, a short

adjournment should have been granted. If number of

opportunities had already been afforded to the Counsel for

assessee, then adjournment could have been granted, on

payment of cost. The Tribunal has not assigned any reason as

to whether reason ment ioned in the app l icat ion

for adjournment, constituted sufficient cause for adjournment

or not. Even if a last opportunity is granted and case is fixed

for hearing and sufficient cause is shown on the date fixed

for hearing, then the case can be adjourned and it should be

adjourned, in the interest of justice. Accordingly, the Tribunal

committed an illegality in rejecting the application for

adjournment and in deciding the appeal ex-parte. Appeal

remitted to the Tribunal for decision on merits on payment of

costs of Rs.21,000/- by the assessee.

CIT vs. Awadh Hotels (P) Ltd (Allahabad High Court)

Interest U/s 234A, 234B & 234C, though mandatory, is

not payable if AO does not direct it to be charged in

Assessment Order:

The AO passed the Order U/s 143(3) in which he omitted to

direct that interest U/s 234A, 234B & 234C should be levied.

The Tribunal, relying on Ranchi Club Ltd. 247 ITR 209 (SC)

held that in the absence of a specific direction, interest was not

leviable. Before the High Court, the Department relied on the

larger bench decision in Anjum M.H.Ghaswala 252 ITR 1 (SC)

and argued that as interest U/s 234A, 234B & 234C was

mandatory, there was no need for the Assessment Order to

specifically direct that interest should be charged. The High

Court dismissed the Revenue’s Appeal.

Court on its Own motion vs. CIT (Delhi High Court)

High Court takes notice of TDS Refund harassment by

Department & demands answers:

One Anand Parkash, FCA, addressed a letter dated 30/04/2012

to the High Court in which he set out the numerous problems

being faced by the assesses across the country owing to the

faulty processing of the Income Tax Returns and non-

grant of TDS credit & refunds. He claimed that because of

the Department’s fault, the assessees were being

harassed. The High Court took judicial notice of the letter,

converted it into a public interest writ petition and directed the

CBDT to answer each of the allegations made in the letter. In

addition, the Court demanded an answer to the following

issues:

(1) Whether procedure U/s 245 of the Act, is being followed

before making adjustment of refunds and whether

assessees are being given full details with regard to

demands, which are being adjusted.

(2) Whether the Revenue is taking caution and care to

communicate rejection of TDS certificates and intimation

U/s 143(1) in case any adjustment or modification is

made to taxes paid, either as advance tax, self

assessment tax or TDS.

(3) Whether and what steps are taken to verify and ascertain

that the old demands against which adjustment is being

made was communicated to the assessee?

(4) What steps have been taken to ensure that the deductors

correctly upload the TDS details/particulars on the

Income Tax website?

(5) What is the remedy available to the assessee and can

he/she approach the Department in case the deductor

fails to correctly upload the particulars in his/her cases?

(6) Whether an assessee can get benefit of TDS deducted

or/and paid but not uploaded by the deductor and

procedure to claim the said benefit?

CIT vs. High Energy Batteries (India) Ltd. (Madras High

Court)

Sale & Lease Back transactions are not “sham”

transactions:

The assessee purchased igni-fluid boiler from its sister concern

and on the same day leased it back. The AO & CIT(A) relied on

McDowell 154 ITR 148 and held the sale and lease back

arrangement to be a sham & camouflage for a loan by the

assessee to the sister concern and rejected the assessee’s

claim for depreciation. However, the Tribunal allowed the claim

on the ground that the transaction was not a “sham”. On appeal

by the Department, the High Court dismissed the Appeal on

following considerations:

(i) Though the machinery was embedded and was in

possession of the seller, the assessee took constructive

delivery of the machinery. As the law recognises

constructive delivery as an acceptable mode of delivery

and possession, physical possession is not necessary.

Thus there is no material on record to show that the

sale was a sham transaction and so its genuineness

cannot be questioned. As regards the lease, the fact that

some part of the funding came from Wipro Finance & that

the lessee paid directly to Wipro in satisfaction of the

assessee’s obligation does not make the agreement a

sham because it is a matter of pure commercial

understanding between the parties as to the modalities

of lease rental payment. Given the freedom to enter

into agreements with parties and guided by

commercial considerations, even to invoke the theory

(cont)...RECENT CASE LAWS

Jul - Aug 2012


10


of tax evasion, the Revenue must have sufficient material

to draw an inference of what had been shown as an

understanding on an agreement between the parties, is

not, in fact, so

(ii) In Vodafone International Holdings 341 ITR 1 (SC),

McDowell was considered extensively and it was held

that there is no conflict between McDowell and Azadi

Bachao Andolan 263 ITR 706 (SC) & Mathuram

Agarwal 8 SCC 667. It was pointed out that the task of the

Revenue/Court is to ascertain the legal nature of the

transaction and while doing so, it has to look at the

entire transaction as a whole and not to adopt a

dissecting approach. It was pointed out that “the

Revenue cannot start with the question as to whether the

impugned transaction is a tax deferment/saving device

but that it should apply the “look at” test to ascertain its

true legal nature. Genuine strategic tax planning has

not been abandoned by any decision of the English

courts till date.” It was held that while colourable devices

cannot be a part of tax planning, it cannot be said that all

tax planning are illegal/ impermissible. Applying this

ratio, the mere fact that what had been purchased had

been leased out to the vendor or that vendor had

undertaken to pay the hire charges on behalf of the

assessee to the hire purchase company does not per se

lead to a conclusion that the transaction is a sham one.

Mahesh Nemichandra Ganeshwade vs. ITO (ITAT Pune)

Section 54EC: If investment within 6 months of transfer

is impossible, then relief is available if investment made

within 6 months of receipt of consideration:

The assessee entered into a Development Agreement on

12/07/2005 in which the consideration was fixed at Rs.2.50

crores. A correction Deed was entered into on 02/07/2007 in

which the sale consideration was increased to Rs.4.90 crores.

The assessee invested Rs.50 lakhs in section 54EC bonds on

03/08/2007 and 27/10/2007. The AO held that the date of

transfer was 12/07/2005 and as the section 54EC investments

had been made beyond a period of 6 months from the date of

transfer, the exemption was not available. The assessee

claimed that as it was impossible for him to invest within 6

months from the date of transfer, the period of 6 months had to

be reckoned from the date of receipt of consideration. HELD by

the Tribunal:

Though section 54EC requires the investment to be made within

6 months of the date of transfer, a technical interpretation

cannot be adopted but it has to be interpreted having regard

to the purpose and spirit of the section. In Circular No.791

dated 02/06/2000, the CBDT held in the context of capital gains

arising U/s 45(2), that though the transfer arises in the year of

conversion of a capital asset into stock-in-trade, the period of 6

months for investment U/s 54E has to be reckoned from the

date of sale of the stock-in-trade. The CBDT appreciated the

impossibility of the assessee being able to invest the amount in

specified assets within six months from the date of transfer.

This interpretation of the CBDT supports the assessee’s claim

that where the consideration is received much after the date of

transfer and it is not possible to invest the same within 6

months of the date of transfer, the period of 6 months must be

reckoned from the date of receipt of consideration.

DCIT vs. Mastek Limited (ITAT Ahmedabad)

Foreign Income-Tax is deductible U/s 37(1). Bar in

section 40(a)(ii) does not apply to foreign taxes:

The assessee paid Rs.42.57 lakhs in Belgium as Income-Tax

and claimed that as deduction U/s 37(1). The AO rejected the

claim by relying on section 40(a)(ii) which provides that any

sum paid on account of tax levied on profits or gains of business

RECENT TRIBUNAL DECISIONS

shall not be allowable as a deduction, though the CIT (A)

allowed the claim on the ground that the bar in section 40(a)(ii)

did not apply to foreign taxes. On appeal by the Department,

the Ahmedabad Tribunal dismissed the appeal and upheld the

view taken by the CIT (A) on the following grounds:

The term “tax” is defined in section 2(43) to mean Income-Tax

chargeable under the provisions of this Act. Section 37(1)

allows a deduction of all taxes and rates. Taxes levied in foreign

countries whether on profits or gains or otherwise are

deductible U/s 37(1) not hit by section 40(a)(ii). It is also not

application of income. The same view has been taken by ITAT

Mumbai in South East Asia Shipping Co. & Tata Sons Ltd.

and the Department’s Reference Applications U/s 256(1) &

256(2) were rejected and the issue has reached finality.

Telecommunications Consultants India Ltd vs. ACIT (ITAT

Delhi)

Under Article 7 of the DTAA, foreign PE profits may be

taxed in India

The assessee, an Indian PSU company, earned Rs.10.68 crores

from foreign projects in Oman etc. The assessee claimed that it

had a “Permanent Establishment” (PE) in those countries and

that in accordance with the DTAA, only the source country was

entitled to tax the profits and India was not authorized to tax

the foreign PE profits. The Tribunal rejected the plea of the

Assessee.

Shri Jatinder Kumar Madan Vs Income Tax Officer (ITAT

Mumbai)

[A.Y.2006-07] [25/04/2012] ITA No.:6921/Mum/2010

Section 54: Exemption is available on exchange of old

Flat by New flat:

The assessee had exchanged old flat with new flat to be

constructed by the builder under development agreement

which amounts to transfer under section 2(47) of the Act. Thus,

the only other condition which is required to be satisfied is that

assessee either purchases a new residential flat within the

prescribed limit or constructs a new residential flat within a

period of 3 years from the date of transfer. The acquisition of a

new flat under a Development Agreement in exchange of the old

flat amounts to construction of new flat. This view is supported

by the decision of the Tribunal in the case of ITO vs. Abbas Ali

Shiraz. Therefore, the provisions of section 54 are applicable

and assessee is entitled to exemption if the new flat had been

constructed within a period of 3 years from the date of transfer.

The ld. AR has also argued that cash compensation received by

the assessee amounting to Rs.11,25,850/- can not be taxed as

capital gain as assessee had invested a sum of Rs.12.00 lacs in

REC bonds under section 54EC. Since cash compensation was

part of consideration for transfer of the old flat and the assessee

had invested the money in REC bonds, the exemption under

section 54EC will be available. In any case, the long term capital

gain computed by the AO including cash compensation as part

of sale consideration is much below the cost of new flat and

therefore, the cash component is also exempt under section 54.

As regards the completion of new flat within a period of 3 years,

assessee has filed a copy of letter dated 30/05/2007 of the

builder in which it has been mentioned that the builder had

applied for Occupation Certificate and possession was to be

given on 14/06/2007. This letter was not available before lower

authorities. The exact date of taking possession of the flat is

also not clear. This aspect therefore, requires verification by

the AO as to whether assessee had taken possession of new flat

within a period of 3 years. The claim of exemption under section

54 is allowed to the assessee, subject to verification of above

aspects by the AO after providing opportunity to the assessee.

M/s Lala Harbhagwan Dass Memorial & Dr. Prem Hospital

(P) Ltd., Vs. ITO, Ward 39(3) ITA No.5023/Del./2011

(A.Y.2005-06) [DELHI TRIBUNAL]

Mere erroneous claim in the absence of any concealment or

Jul - Aug 2012


11

furnishing of inaccurate particulars, is no ground for levying

penalty, especially when there is nothing on record to show that

the explanation offered by the assessee was not bona fide or

any material particulars were concealed or furnished

inaccurate. In these circumstances, the Hon. Tribunal had no

hesitation in observing that no penalty is exigible in relation to

claim for deduction of excess depreciation and interest on

amount borrowed for building which was incomplete.

Therefore, the ITAT held that penalty is not imposable in this

case and action of authorities below in imposing/confirming the

penalty U/s 271(1)(c) of the Act is neither proper nor justified.

Tara Jewels Export Pvt. Ltd. Vs. DCIT [ITAT MUMBAI]

(Date of pronouncement: 02/05/2012) A.Y.2002-03 [ITA

No.4274/M/2008]

Mere Disallowance of Expense not a ground to proceed u/s

271(1)(c)

The law stands very well settled by the Hon’ble Apex Court in

the case of CIT vs. Reliance Petroproducts (P.) Ltd., that merely

disallowing a claim of deduction raised by the assessee is not a

ground to proceed U/s 271(1)(c). For penalty to attract, it has

to be either a case of furnishing of inaccurate particulars,

concealment of income or at least the claim should have been

proved to be a mala-fide one. Since the said eventualities do not

exist in instant case, the Hon. Tribunal held that the penalty in

question does not hold ground.

PEL Holdings Pvt.Ltd. (Now merged with Topstar

Mercantile Pvt. Ltd.) Vs. ITO [MUMBAI TRIBUNAL] ITA

NO. 2402/MUM/2010

(A.Y. 1993-94) Date of pronouncement: 17/04/2012

Return of income is the only document where assessee can

furnish his income details:

Hon’ble Supreme Court in the case of CIT vs. Reliance Petro

Products Pvt. Ltd, reported in 322 ITR 158 (SC) has clearly

held that the Return of Income is the only document where

the assessee can furnish his particulars of income, where

as in the instant Appeal, the Appellant company has not

disclosed the receipt of premium received on renunciation of

rights in its Return of Income nor in the Computation of Income

accompanied with the Return of Income. So, penalty for

Concealment of Income is imposable U/s 271(1)(c) of the

Income Tax Act, 1961.

ACIT vs. SIL Investment Ltd (ITAT Delhi)

Section 14A: Onus is on AO to show expenditure is

incurred to earn tax-free income:

For A.Y.2006-07, the assessee earned dividend of Rs.17 lakhs

and LTCG of Rs.12 crores. The assessee claimed that it had

incurred no expenses to earn the tax-free income and therefore

there can be no disallowance U/s.14A. However, the AO

disallowed Rs.2 crores under Rule 8D towards interest and

administrative expenditure. The CIT (A) accepted that no

interest was incurred and deleted that disallowance. He also

reduced the disallowance on account of administrative

expenditure. On appeal to the Tribunal, it was held so on the

following considerations:

(i) The contention of the Revenue that some expenditure,

directly or indirectly, is always incurred for earning tax-free

income cannot be accepted. The burden is on the AO to

establish the nexus of the expenditure incurred with

the earning of exempt income before making any

disallowance u/s 14A (Hero Cycles 323 ITR 518 (P&H),

Jindal Photo followed)

(ii) As regards interest, the AO has to show the nexus

between the borrowed funds and the tax free investments.

If that is not done, disallowance of interest is not

permissible (K. Raheja Corporation (Bom) followed)

(iii) As regards admin. expenses, section 14A disallowance

cannot be made on an ad-hoc basis. It is the

Department’s responsibility to bring material on record

to show that expenditure was incurred for earning the

exempt income. If this is not done, disallowance is not

permissible (Wimco Seedlings followed)

Deputy Commissioner of Income Tax Vs M/s CNB Finwiz

Limited [DELHI TRIBUNAL] [ITA No.3989/Del/2011]

A.Y.2005-06

When addition itself is set aside, there cannot be penalty

for concealment of income:

The disallowance made by the Assessing Officer and sustained

by the learned CIT(A) was challenged by the assessee before

the ITAT in an appeal. The ITAT has decided the said appeal in

favour of the assessee. Therefore, at present, when the

addition itself has been set aside, there cannot be any case for

levy of penalty for concealment of income.

Deputy Commissioner of Income Tax Vs M/s Trade

Apartment Ltd. [ITAT KOLKATA] [I.T.A. No.: 1277/ Kol. /

2011 A.Y.2008-09] (30/03/2012)

Section 14A: In case net interest is income, no part of

interest paid can be disallowed for earning tax free

dividend

The taxpayer adjusted the interest expenditure against the

interest income earned. After such adjustment, no interest

expenditure remained to be disallowed. The tax payer offered

expenditure other than interest of Rs.111521/- for

disallowance under Section 14A of the Act on the estimated

basis. The Kolkata Tribunal held that there was no interest

expenditure remaining after adjusting the interest credited to

the Profit and Loss Account. Therefore, no part of interest paid

can be disallowed for earning tax free dividend. Further,

expenditure other than interest had been offered for

disallowance by the taxpayer under Section 14A of the Act.

Therefore, no further disallowance shall be made.

Income Tax Department invites Applications from CA’s

for carrying out section 142(2A) Special Audit

OFFICE OF THE CHIEF COMMISSIONER OF INCOME TAX, PUNE

Aayakar Bhavan, 12, Sadhu Vaswani Road, Pune 411 001,

Tele Fax 020-2611 4237 PBX 020-26127244

No. PN/CC/Coord/401/13/2012-13, Dated- 09/05/2012

NOTICE INVITING APPLICATIONS

The Chief Commissioner of Income Tax, Pune invites

applications from qualified Chartered Accountants/firms of CAs

for empanelment to carryout Special Audit U/s 142(2A) of the

I.T.Act, 1961. The remuneration for the Special Audit is

governed by Rule 14B of the I.T.Rules, 1962.

The criteria laid down for empanelment are as under:

(i) The Chartered Accountant / Firm of CA should have been in

practice as Auditors for the last 10 years and should have

experience of audit U/s 44 AB of the Income Tax Act for

atleast 5 years;

(ii) The average professional receipts from Audit of Non-

Banking and Non-financial Institutions as shown in the

Return filed for the last 5 years ending on 31/03/2011

should be Rs.50 lakhs or more;

(iii)No applicant shall qualify for empanelment as Auditor, if

a) he has been dismissed or removed from Government

service; or

b) he has been convicted of an offence connected with any

proceeding under the Income-tax Act, 1961 (43 of

1961), or the Wealth-tax Act, 1957 (27 of 1957), or the

Gift-tax Act, 1958 (18 of 1958), or a penalty has been

imposed on him under clause (iii) of sub-section (1) of

section 271 or clause (I) of section 273 of the Income-

tax Act, 1961, or under clause (iii}of sub-section (1) of

OTHER RECENT DEVELOPMENTS/

AMENDMENTS


Jul - Aug 2012


12


section 18 of the Wealth-tax Act, 1957, or under clause

(iii) of sub-section (1) of section 17 of The Gift-tax Act,

1958; or

c) he is an undischarged insolvent or

d) he has been convicted of any offence and sentenced to a

term of imprisonment; or

e) he has been found guilty of misconduct in his

professional capacity by the institute of Chartered

Accountants of India.

(iv) The general reputation of the CA/Firm of CAs will be

considered and taken into account by the Committee

constituted to recommend names for empanelment ;

The Chartered Accountants/Firms of CAs who fulfill the

above criteria may submit the application (duly filled in) in

the prescribed form with relevant documents (duly

certified) to the office of ACIT (Guard.), Room No.214, 2nd

Floor, Aayakar Bhavan, 12, Sadhu Vaswani Road, Pune- 411

001 on or before 30/05/2012.

The application form may be obtained from the office of the

ACIT (Co-ord.), Pune.

The decision of the Chief CIT, Pune as regards the

empanelment of CA Firms of CAs will be final.

(R.Y.BALAWADE)

ACIT (Co-ord),

For Chief Commissioner of Income Tax, Pune,

Amended GAAR Provisions in the Finance Bill 2012:

Press Release dated 15/05/2012 issued by the Ministry

of Finance:

The following government amendments have been proposed in

the Provisions relating to General Anti-Avoidance Rules (GAAR)

contained in the Finance Bill 2012:

i) To remove the onus of proof from the tax-payers to the

Revenue Department before any action can be initiated

under GAAR.

ii) To introduce an independent member, not below the rank

of Joint Secretary from the Ministry of Law, in the

GAAR approving panel to ensure objectivity and

transparency.

iii) To provide that both, resident or non-resident tax-payer can

approach the Authority for Advance Ruling (AAR) for a ruling

as to whether any arrangement to be undertaken is

permissible or not under the GAAR provisions.

iv) To provide more time to both tax payers and the tax

administration to address all related issues, it is proposed to

defer the applicability of GAAR provisions by one year i.e.

with effect from financial year 2013-14.

LLP – Notice for filing Form-8 & 11 for Financial Year

2011-12th

i) All LLPs registered upto 30 September, 2011 have to

mandatorily close the financial year as on 31/03/2012 and th th

file Form-11 by 30 May, 2012 and Form-8 by 30 October,

2012.

ii) LLPs registered from 01/10/2011 to 31/03/2012 have

option either to close financial year as on 31/03/2012 or

31/03/2013 and to file Form-8 & 11 accordingly.

iii) Please note that if LLP fails to file Form-8 & 11 within time, an

additional fees of Rs.100/- is payable per day till date of

filing.

Section 80CCG: Deduction for Investment made under

any Equity Saving Scheme: w.e.f. A.Y.2013-14

Newly inserted Section 80CCG provides deduction in respect of

investment made under notified equity saving scheme. The

deduction under this section is available if following conditions

are satisfied:

(a) The assessee is a resident individual (may be ordinarily

resident or not ordinarily resident)

(b) His gross total income does not exceed Rs. 10 lakhs;\

(c) He has acquired listed shares in accordance with a notified

scheme;

(d) The assessee is a new retail investor as specified in the

above notified scheme;

(e) The investor is locked-in for a period of 3 years from the date

of acquisition in accordance with the above scheme;

(f) The assessee satisfies any other condition as may be

prescribed.

(g) Amount of deduction is at 50% of amount invested in

equity shares subject to a maximum of Rs.25,000/-. If any

deduction is claimed by a taxpayer under this section in any

year, he shall not be entitled to any deduction under this

section for any subsequent year.

(h) Withdrawal of deduction – If the assessee, after

claiming the aforesaid deduction, fails to satisfy the above

conditions, the deduction originally allowed shall be

deemed to be the income of the assessee of the year in which

default is committed.

Few tips to Prevent Income Tax Raids:

One should not keep any unaccounted or undisclosed

money, property or income popularly known as black money. If

such a disclosure is made before its detection by the Income Tax

Department, the chances of being trapped in a tax raid are

minimized. A tax raid may also be conducted against a person in

possession of undisclosed income or property not belonging to

him but to someone else. It is therefore important for a person

who is in possession or in custody of someone else’s jewellery or

other valuables, etc. to ensure that they are duly accounted for.

DO’S

1. Make correct disclosure of income and wealth in

Returns:

One should make a full and true disclosure of one’s taxable

& exempt income. Similarly, a person’s wealth should be

properly disclosed to the Wealth Tax Officer.

2. Comply with summons or notices to prevent a tax raid:

It is absolutely necessary to fairly and properly comply with

the summons. Wherever this is not possible, proper

adjournment should be sought. Co-operation on the part of

a person, whether he is an income tax assessee or not, will

ensure prevention of a raid.

3. How to declare exempted or non-taxable income and

wealth:

When the entire picture is placed before the Assessing

Officer, there is little scope or raid on the grounds of

possessing undisclosed income. In view of the relaxed

wealth tax exemption limit, many will now be outside the

Wealth Tax net, hence they may enclose their statement of

wealth with the income tax Return.

4. Preserve important vouchers and other documentary

evidence for the acquisition of assets:

It is vital to preserve important vouchers and/or other

documentary evidence as proof for their acquisition. This is

necessary to prove the acquisition of such assets in case an

inadvertent Income Tax raid takes place and the assessee is

called upon to prove the nature and source of acquisition.

5. How to prevent income tax raid on lockers & safe

deposit vaults:

The owner of a locker, should maintain a register recording

its contents for disclosure if called upon by the Income Tax

Authorities with custodian to get a declaration from the

owner regarding the nature and source of the articles to

satisfy.

Jul - Aug 2012


13

DON’TS

1. Don’t introduce fresh capital over 10 lakhs.

2. Don’t introduce new unsecured loans exceeding 25

lakhs.

3. Don’t make investment more than 5 times the Gross

Receipts (including agricultural income).

4. Don’t sale property for lesser amount than Govt.

Valuation.

5. Don’t pay Commission above Rs.10 lakhs.

6. Don’t declare total income less than 20% of

professional receipts.

7. Don’t declare profit less than 5% of receipts if you are a

contractor who’s GC Receipts exceed Rs.1 Cr.

8. Don’t adopt project completion method if you are

builder.

-*-*-*-

6) CBDT Instruction on grant of TDS credit for

A.Y.2011-12:

Instruction No. 4/2012 [F. No. 225/34/2011-

ITA.II], dated 25/05/2012

The Board has decided to withdraw Instruction no.01/2012

issued on 2nd February, 2012 on the above subject with

immediate effect. The following decisions have been taken

in this regard:

I) In all Returns (ITR-1 to ITR-6), where the difference

between the TDS claim and matching TDS amount

reported in 26- data does not exceed Rs.5000/-, the

TDS claim may be accepted without verification.

ii) Where there is zero TDS matching, TDS credit shall be

allowed only after due verification.

iii) Where there are TDS claims with invalid TAN, the TDS

credit for such claims will not be allowed.

iv) In all other cases TDS credit shall be allowed after due

verification.

-*-*-*-

7) How to surrender/Cancel extra /Additional PAN

Online / Manually:

An assessee may have been allotted multiple PAN Card which

might have been allotted to the Assessee for many reasons.

Assessee who has more than one PAN should immediately

apply for surrender of additional PAN number(s) allotted to

him as having more than one PAN may make him liable to a

penalty of Rs. 10,000/-.

Assessee can apply for surrender of PAN Card by two

methods:

1. Manually:

a) Write a letter to this effect to the Assessing

Officer under whose jurisdiction you have been filing your

Returns. The letter must contain details such as your

name, contact details, details of the PAN card

to be retained, details of the duplicate PAN card(s)

wh i ch you need to su r render, e t c . Keep the

acknowledgement copy of the letter that you have filed

with the I-T department, stating that you are

surrendering your additional PAN. That is sufficient as

proof of surrender and no additional confirmation from

the I-T authorities is required. On receipt of the

acknowledgement, there is no need for you to wait for

intimation from the Income Tax Department considering

that the PAN submitted has now been cancelled by them.

The acknowledgment copy of the letter submitted will

more than solve the purpose.

AS

b) Manually Fill the Form No. 49A for change/Correction in

correction in PAN and submit the same at your nearest

UTI PAN centers or NSDL TIN Facilitation centers.

2. Online -

a) Visit the following Link and fill the details in the

Online Form given at the link and following the

instructions.

http://incometax.sparshindia.com/pan/newPAN.asp

b) You can also surrender the PAN online by filing an

application ”change in pan data” through UTI PAN

Centers or NSDL TIN Facilitation Centers. In application

fill spare PAN number in the last row of the Form.

-*-*-*-

8) Persons carrying on agency business or earning

commission income should revise their Return of

Income for A.Y.2011-12, if original Return filed U/s

44AD:

In the Finance Bill, 2012 section 44AD has been amended

retrospectively w.e.f. A.Y.2011-12 to the effect that

presumptive scheme under the said section is not applicable

to:

“ persons carrying on profession as referred to in section

44AA(1) or

“ persons earning income in the nature of commission or

brokerage income or

“ persons carrying on any agency business.

The said amendment has been made with retrospective effect

from A.Y.2011-12. Retrospective amendment is either made

to validate an earlier levy or to make clear the legislative

intent.

Professionals are not covered under the presumptive scheme

of section 44AD that was very much clear from the definition

of eligible business as the word, specially business, was

mentioned therein and business cannot include professions.

However, whether agency business or income from

commission was covered under presumptive scheme

under section 44AD or not, it was not clear from the

wording of section 44AD and in the definition of

eligible business contained in the explanation to the

said sect ion, the word “business” has only been

mentioned and agency business could have been interpreted

as business by any rational person.

There fo re , the re must have been ce r ta in cases

where the assessees carrying on some agency business or

earning income from commission may have filed their

Return of Income under the presumptive income scheme of

section 44AD. In such cases, if such assessee’s (carrying on

agency business or earning income from commission)

turnover or income exceeds the limits prescribed U/s 44AA,

then such assessee would be required to maintain regular

books of accounts and he should have filed his Return of

Income as per Balance Sheet and books of accounts, as such

assessee carrying on agency business is not covered

u/s 44AD.

Thus, after the retrospective amendment in section 44AD

w.e.f A.Y. 2011-12, the assessees carrying on agency

business or earning income from commission should revise

their Return of Income of A.Y. 2011-12, if they have filed their

Return of Income presuming them to be covered under

section 44AD.


Jul - Aug 2012


GLIMPSES AT ICAI- National Students’ Convention Dated 30th June & 1st July, 2012

Jul - Aug 2012

Technical Session IV – Chaired by CA Madhukar Hiregange [Vice Chairman – Board of Studies] on GST and Point of Taxation Rules, 2011.

14

Deep Prajwalan by the gracious Hands of CA T.N. Manoharan (Past President–ICAI)

CA Shweta Jain (Chair- person-Vasai Branch) giving floral welcome to CA Nilesh Vikamsey Chairman –BOS-ICAI)

CA Shweta Jain (Chair-person-Vasai Branch) giving floral welcome to CA Shruti Shah (Chairperson-WICASA)

CA Haresh Mehta (Member Vasai Branch)Presenting Memento to CA Nilesh Vikamsey (Chairman BOS-ICAI)

CA Shweta Jain (Chair-person-Vasai Branch) giving floral welcome to CA Durgesh Kabra (Chairman WIRC)

Technical Session –III chaired by CA Amarjeet Chopra on Revised Schedule VI and Merger, Acquisitions & Requisite

Technical Session –I chaired by CA T.N.Manoharan on Transfer Pricing and Double Taxation Avoidance Agreement

CA Lalit Bajaj (Past

Chairman – Vasai Branch)

Presenting Memento to CA

T.N. Manoharan (Past

President-ICAI)

Technical Session –II chaired by CA N. P. Sarda on Accounting Standards and Auditor Rotation

CA Lalit Bajaj

[Past

Chairman-Vasai

Branch] giving

floral welcome

to CA Jay

Chhaira

[ Vice Chairman

– WIRC]

Ankit Mewada giving

floral welcome to CA

Dinesh Gandhi

[Treasurer WIRC]

CA Pramod Dhamankar [Past

Chairman – Vasai Branch]

and Ms. Neelam Gupta [ Vice

Chairperson –Vasai WICASA]

presenting Bouquet and

Memento respectively to CA

Uttam Prakash Agarwal [ Past

President – ICAI] in special

session II

Special Session III addressed by Mr. Raghuram MTV

Valedictory Session

Technical Session V chaired by CA B. R. Jaju

on Professional Ethics and FDI & Indian

Economy.

Special Session I addressed by CA Nilesh Vikamsey–Chairman - Board of Studies


15

GLIMPSES AT various Seminars organised by Vasai Branch

Jul - Aug 2012

L-R : CA Santosh Sharma, CA Unmesh Narvekar (Past Chairman – Vasai Branch), CA Shweta Jain (Chairperson – Vasai Branch), Mr. Ajit Manjure (Deputy Manager – CDSL), CA Kishor Vaishnav (Secretary – Vasai branch) at (Seminar – Investor Awareness Programme on 3rd June2012)

CA Ajit Manjure (Speaker) at [Seminar – Investor Awareness Programme on 3rd June 2012]

CA Subhash Nair giving Memento to CA Saket Patawari [Speaker] at [Seminar–Certification Course on Indirect Tax]

CA. Jank Vaghani (Speaker)at [Seminar–Certification Course on Indirect Tax]

CA Virat Chavda, Speaker at Seminar –Certification Course on Indirect Tax]

Participants of (Seminar –Certification Course on Indirect Tax)

L-R CA. Suhas Kelkar,CA Jayesh Gogri (Speaker),CA Shweta Jain (Chairperson Vasai Br.), Mr. Tiwari (Guest of Honor),CA Pramod Dhamankar(Past Chairman Vasai Branch

CA Govind Goyal [Speaker] at [Seminar –Certification Course on Indirect Tax]

CA Yogesh Vajani giving Memento at CA Anik Koria [Speaker ]. [Seminar –Revised Schedule VI & transfer Pricing)

CA S.V.N. Rajeshwari (Member) welcoming to CA Amar Shukla[ Speaker ]. [Seminar –Certification Course on Indirect Tax]

L-R : CA Ramanand Gupta [ Vice Chairman– Vasai Branch, CA Lalit Bajaj [Past Chairman – Vasai Branch], CA Shweta Jain [Chairperson – Vasai Branch ], CA Anik Koria [Speaker], CA Unmesh Narvekar [Past Chairman – Vasai Branch]. [Seminar –Revised Schedule VI & transfer Pricing]

L-R CA. Pramod Dhamankar (Past Chairman-Vasai Branch),CA Vijay Brooklyn (Speaker),CA Shweta Jain [Chairperson – Vasai Branch],CA Haresh Mehta (Member-Vasai Branch ) [Lecture Meeting –Developing Excellence and mastering Success on 16th June 2012]

CA Jayesh Gogri (Speaker)at Service Tax Amendment

CA Amar Shukla [ Speaker]. [Seminar–Cert i f icat ion Course on Indirect Tax

Participants Lecture Meeting on Service Tax Amendment

Advocate Sushant Murty, Speaker at [Seminar– Certification Course on Indirect Tax]


161616

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Mr. Sriniwas Sriram (1st Runner up)

(cont)... GLIMPSES AT ICAI- National Students’ Convention Dated 30th June & 1st July, 2012

Participants of ICAI- National Students’ Convention-2012

CA D. P. Rewavala CA Arjun Saini CA Rajesh Kotak CA Anu Agarwal CA Narendra Bhambwani

Panel of Judges

Flag Hoisting on 1st July CA Day

Ms. Uzma Mandlik and Mr. Ashay Upadhayay taking Best Paper Presenters awards

Ms. Nidhi Kothari (1st Runner up) Mr. Vasudevan C R (2nd Runner up)

Our Vasai WICASA Team headed by CA Ramanand Gupta

Jul - Aug 2012

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