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www.vasai-icai.org OCTOBER - NOVEMBER 2012

VASAIBRANCH OF WIRC

NEWSLETTER

VASAIBRANCH OF WIRC

NEWSLETTER

VASAIBRANCH OF WIRC

NEWSLETTER

VASAIBRANCH OF WIRC

NEWSLETTER

MembersOnly

The Institute of Chartered Accountants of India

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

PHOTO GALLERY

November 201202

MANAGING COMMITTEE

EDITORIAL BOARD

CA Shweta Jain CA Ramanand Gupta CA Kishor Vaishnav CA Unmesh NarvekarChairperson | 9920737198 Vice-Chairman | 9322231113 Secretary & Treasurer | 9892194382 Imm. Past Chairman | 9821236179

CA Haresh Mehta Committee Member | 9823137477

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

CA D. P. Revawala Addressing Students at Career Counseling at Abhinav College Dt. 24th Aug 2012

CA Ramanand Gupta - Vice Chairman Vasai Branch Introducing Speaker seen (L-R) CA Dilip Phadke - Speaker

CA Shweta Jain - Chairperson Vasai Branch & CA Haresh Mehta -Member Vasai Branch

CA Suvarna Gokhale introducing to speaker at Seminar on MVAT Audit seen (L-R) CA Kishor Vaishnav-

Secretary Vasai Branch, CA Madhukar Khandekar - Speaker & CA Shweta Jain - Chairperson Vasai Branch

Participants at Seminar on MVAT Issue Related to Builders Dt. 6th Oct. 2012

CA Shweta Jain - Chairperson Vasai Branch Presenting Memento to CA Dilip Phadke (Speaker)

CA Kishor Vaishnav Secretary Vasai Branch Presenting Memento to Speaker Mr. Ajit Manjure also seen of CA D. P. Revawala (Member Vasai Branch) Participants at Investor Awareness Programme Dt. 4th Nov. 2012

CA Madhukar Khandekar (Speaker at Seminar on MVAT Audit)

CA Dilip Phadke (Speaker at Seminar on

MVAT issues Related to Builder)

03

FROM CHAIRPERSON’S DESKMy Dear Professional Colleagues,

I am proud to watch ICAI impressive growth across the world,thanks to the efforts of our hardworking leaders. Now as theprocess of December 2012 elections are on its way for theCentral and Regional Council of the Institute, I am confident thatall of you will come forward to exercise your right for bettermentof profession. Good luck for the enthusiastic candidacies in thisyear’s election. Happy voting everyone!

The essence of this newsletter is to share professionalexperience and exchange information. I would request allmembers to actively contribute material to their very ownnewsletter. Suggestions and feedbacks for further improvingthe newsletter are also welcome.

Long live the tradition of Indian culture and as the generationshave passed by, our culture is getting stronger and stronger.Let's keep it up. Festivals really are recanted to bring peopletogether and inspire them to forget their narrow differences andwelcome each other with open arms, by celebrating the festiveseasons. It is the time when entire country is tinged in colors ofcelebrations, enthusiasm and devotion of just ended GaneshUtsav, Navratri, Dussera & Eid....!! The already sparklingcountry further brightens itself by adding more decorations andcolors to homes and streets with May the festival oflights be the harbinger of joy and prosperity. As the holyoccasion of Diwali is here and the atmosphere is filled with thespirit of mirth and love, here's hoping this festival of beautybrings your way, bright sparkles of contentment, that stay withyou through the days ahead. Best wishes on Diwali and NewYear.

During this year, our focus and efforts, as always, will be onenhancing the dignity and development of our profession. Andmaintaining our aforeset vision, I would like to share with yousome of the initiatives & activities of the branch during lastmonths, we successfully completed the Lecture Meeting onMVAT issues related to the builders & MVAT Audit with theeminent speakers & the cheerful participants.

Seminar on Project financing- Project financing is aninnovative and timely financing technique that has been used onmany high-profile corporate projects. Many risks and pitfalls arethere in concerning project finance. So considering the synergywe are organizing two days seminar on the above subject inmonth of December.

Certificate course on valuation – After the successfulcompletion of two certificate course on Indirect Taxes & ISA andcontinuing the same we are further organizing certificate courseon Valuation. Since in the light of the emerging diversities &complexities in valuation jobs, the course has been designed toempower the members to be the leaders in the global servicemarket. Apart from the comprehensive theoretical aspects, thiscourse will sharpen the expertise and excellence of ourmembers through multiple case studies across the industry.Since it is little apart & different from our routine practices wecan use this into our practice by availing the benefit of thiscertification course .

Regional Members Convention- It gives immense pleasureto announce that we are hosting the Members convention in themonth of December with - The high standard of deliberation onInternational Taxation, 21st and 22nd December 2012along with resource persons par excellence to share theirknowledge and thoughts. Trying to make this event a successthat we are sure to remember - it as an event of pride inretrospect. We have successfully completed 7 years of ourbranch, to rejoice it we called for the celebration on 22ndDecember 2012 and you all are invited with your family to bepart of this celebration.

DIWALI..

Certificate course on concurrent audit - The concurrentaudit system has become very crucial and important for banks.It is regarded as part of a system to ensure timely detection ofirregularities and lapses, which helps in minimization of theirregularities and fraudulent transactions at branches. Theconcurrent auditors must be fully abreast with the changes infunctioning and operational activities of the banks. Consideringthis, we are organizing one more certificate course onconcurrent audit. By undergoing this certificate course you willbe able to hone your skills in carrying out the concurrent audit inmuch better way.

ITAT Proceedings & Mock Tribunal- After receiving theoverwhelmed response last time in 2010, and on receiving manyrequest to organize once again we are organizing ITATProceedings Mock Tribunal in month of December. Hoping toexplore the possibilities of conducting such a seminar where theprocedural aspects, rules & regulations of ITAT could beexplained to the audience by eminent experts in the field & eventhis time we will be able to create a mark benefit to all thePractising CAs in our Branch Area. This event will instill muchwanted confidence in the audience and remove their fearpsychosis of appearing before ITAT.

Seminar on Internal Audit- It is organized in a synergy ofviews of the deliberations, which threw up a number ofextremely thought provoking and valuable insights into not onlythe current status of internal audit in government and itsinherent limitations but also a suggested road map for futurereforms in internal audit.

As students are always on top most priority, we havesuccessfully completed CA Career counseling, Quiz & Elocutioncompetition, Debate competition for overall development ofstudents. In the same line we are planning to organize RRC toGoa in the end of November and many other programs. Sorequest you all to encourage your articles to take part in allevents.

Exams fever is going on…..My warm wishes to all who areappearing in these Exams. Best of Luck..!

With these words, I once again request all the members tosupport me in all my endeavours and make your presence in allthe possible seminars & courses and also your valuablesuggestions are invited for the betterment of our branch.

“Let no feeling of discouragement prey upon you, and inthe end you are sure to succeed.”

With warm regards,

CA Shweta Jain

Chairperson

The Institute of Chartered Accountants of India Vasai Branch of WIRC Newsletter November 2012

The Institute of Chartered Accountants of India Vasai Branch of WIRC Newsletter04

FORTHCOMING PROGRAMMES

November 2012

FORTHCOMING PROGRAMMES FOR MEMBERS

FORTHCOMING PROGRAMMES FOR STUDENTS

Date Seminar on Timings Venue Speakers Co-ordinators Fees CPE4th Nov. Investor Awareness 10.00 am Hotel Kubera Mr. Ajit Manjure CA Haresh Mehta Free 32012 Programme to 1.00 pm 9823137477

CA Kishor Vaishnav9892194382

16th Certificate Course on 9.30 am GCC Club, Eminent Speaker CA Haresh Mehta Rs. 20000/- 50Dec. 2012 Valuation to Mira Road (East) 9823137477to 27th 5.30 pm CA Hemant ShahJan. 2013, 9869011148(Every CA Sandeep JainSunday) 993060804015th & 16th Seminar on Project 9.30 am GCC Club, Eminent Speaker CA Unmesh Narvekar Rs. 1800/- for 12Dec., 2012 Finance to 5.30 pm Mira Road (East) 9821236179 members,

CA Sandeep Jain Rs.1500 /- for9930608040 CA students &CA Mita Modi Rs. 2500/- for9321901964 others

21st & Members Regional 9.30 am GCC Club, See in detail CA Dinesh Gandhi Rs. 2750/- 1222nd Convention on International to 6.00 pm Mira Road (East) Programme Schedule 9821240303Dec., 2012 Taxation-2012 CA Shweta Jain

9920737198

22nd Vasai Branch 5.00 pm GCC Club, _ CA Ramanand Gupta Free –Dec., 2012 7th Annual Day to 11.00 pm Mira Road (East) 9322231113

CA Preeti Agrawal9320059238

28th to 30th Certificate Course 9.30 am GCC Club, Eminent Speaker CA Kishor Vaishnav Rs. 12500/- 36Dec, 2012 & on Concurrent Audit to 5.30 pm Mira Road (East) 98921943824th Jan to CA Nitesh Shah6th Jan, 2013 9821170150

29th ITAT Proceedings 9.30 am GCC Club, CA Bhupendra Shah CA Ramanand Gupta Rs. 850/- for 6Dec., 2012 and Mock Tribunal to 5.30 pm Mira Road (East) 9322231113 members,

CA Lalit Munoyat Rs. 650/- for9820193508 CA students &

Rs. 950/- forothers

30th Seminar on Internal Audit 9.30 am GCC Club, CA C. N. Rushi CA Haresh Mehta Rs. 850/- for 6Dec., 2012 to 5.30 pm Mira Road (East) CA Satish Shenoy 9823137477 members,

CA. Manish Pipalia CA Mita Modi Rs. 750/- for9702285086 CA students &CA Pratik Soni Rs. 1000/- for

others

Date Seminar on Timings Venue Speakers Co-ordinators Fees CPE

18th to 20th Residential Refresher Two Days Goa - CA Ramanand Gupta Rs. 2500/- -Nov, 2012 Course(RCC) 9322231113

22nd Career Counseling 10.00 am Royal college, - CA Ramanand Gupta Free -Nov, 2012 to 12.30 pm Mira Road (East) 9322231113

23rd Career Counseling 10.00 am Gracious School - CA Ramanand Gupta Free -Nov, 2012 to 12.30 pm 9322231113

25th Youth Festival 9.00am IIPS Institute, Students CA Ramanand Gupta Free -Nov, 2012 onwards Mira-Bhayandar 9322231113

Road, Mira Road(East)

27th Career Counseling 10.00 am Reena Mehta - CA Unmesh Narvekar Free -Nov, 2012 to 12.30 pm College, 9821236179

Bhayandar(West)

29th Career Counseling 10.00 am Viva College, - CA Ramanand Gupta Free -Nov, 2012 to 12.30 pm Virar (West) 9322231113

30th Career Counseling 10.00 am Vartak College, - CA Ramanand Gupta Free -Nov, 2012 to 12.30 pm Vasai(West) 9322231113

1st Career Counseling 10.00 am S.N College, - CA Ramanand Gupta Free -Dec, 2012 to 12.30 pm Bhayandar (East) 9322231113

Fees Rs.20,000/- payable by Cheque/DD infavour of "Secretary, Inst itute ofChartered Accountants of India" payable atDelhi and should be sent to Vasai Branch ofWIRC at “C-310/ 311, Shanti ShoppingCentre, Opp. Railway Station, Mira Road(East), Thane”.

Fees Rs. 1800/- for members, Rs. 1500/- forCA students & Rs. 2500/- for others

Speakers Eminent

Co-ordinators CA Unmesh Narvekar-9821232169CA Mita Modi-9321901964CA Sandeep Jain - 9930608040

05

FORTHCOMING PROGRAMME & SCHEDULE


Venue Green Court Club (G.C.C.)Mira Bhayandar Road, Mira Road (East)

Timing 9.30 am to 5.30 pm

Date 16th December 2012 to 27th January 2013 (Every Sunday)

Venue Green Court Club (G.C.C.) MiraBhayandar Road, Mira Road (East)

Date 15th & 16th December, 2012


Certificate Course on Valuation

Seminar on Project Finance

Organized by

Corporate Law & Corporate Governance Committee

Hosted byVasai Branch of WIRC of ICAI

Course Chairman Course Director Course Coordinators Dr. P. T. Giridharan CA Shweta Jain, Chairperson, CA Haresh Mehta - 9823137477

Secretary, Corporate Law & Vasai Branch of WIRC of ICAI CA Hemant Shah - 9869011148Corporate Governance Committee CA Sandeep Jain - 9930608040

Date Topic

13th January, 2013 Valuation of ESOP and options with case studies

20th January, 2013 Effective use of excel spread sheet

Drafting of valuation report/ Valuation asa profession- competence, quality andethics

27th January, 2013 Valuation of Intellectual property andHuman resources with case study/Valuation of closely held and stressedbusinesses

Date Topic

16th December 2012 Valuation overview and general principlesof Valuation, Fair Value measurement,challenges for accountants, ImpairmentMeasurement

23rd December, 2012 Selection of Valuation Techniques, Use offorecasting techniques

30th December, 2012 Valuation in Merger and acquisition withcase studies, Income Tax - Impact &Implication on Valuation, Case Studyalong with Practical issues on Valuation

6th January, 2013 Valuation of Complex SecuritiesIntangible Assets - Generalconsiderations in Valuation with case study

Programme Schedule

2nd Day Sunday 16th December 2012 (9.30 a.m. to 5.30 p.m.)

�Perspective: FDI vs. others

�Risk allocation & Mitigation

�Sector specific –Project Finance

�SME & Institutional Financing

1st Day Saturday 15th December 2012 (9.30 a.m. to 5.30 p.m.)

�Project finance-Introduction and Innovations

�Technical collaboration : Assesssement of risk

�Financial modeling : Forecast Reality

�Due diligence: Essential credit issues

Programme Schedule

CPE-50 hrs

CPE-12 hrs

For Registrations please contact022-65568900/9224781595


November 2012


CA Nitesh Shah 9821170150, CA Nitesh Kothari 9833860870, CA Rajesh Kotak 9561330333,CA Santosh Baranwal 9923421020, CA Aniket Padhye 9922063800, CA Prasad Chitre 9823843717,CA Preeti Agarwal 9320059238, CA Sanjay Pahariya 9321171413, CA Narayan Toshniwal 9892458001,CA Alok Murarka 9029007232

CPE-12 hrsRegional Convention on International Taxation - 2012Organized by

Western India Regional Council of ICAIHosted by

Vasai Branch of WIRC of ICAI

Convention Chairman Convention Co-Chairman Convention Coordinators CA Dinesh Gandhi CA Shweta Jain CA Ramanand Gupta - 9322231113

Treasurer-WIRC, ICAI Chairperson,Vasai Branch of WIRC of ICAI CA Kishor Vaishnav - 9892194382CA Haresh Mehta - 9823137477CA Unmesh Narvekar - 9821236179

Programme Schedule

1st Day - Friday, 21st December 2012 (9.00am to 6.00 pm)Inauguration Session - New Emerging Area for CA in

International Taxation

Technical Session-I

Principles and Provisions of International Taxation

Interpretation of Tax treaties, models and its scope

Technical Session-II

Advance Ruling Procedure, documentation and recent controversies

TDS Implications as per DTAA and Domestic tax laws

Technical Session - III

Mergers & Acquisitions : Cross border taxation

2nd Day - Saturday, 22nd December 2012 (9.00am to 4.00pm)

Technical Session - IV

Transfer Pricing : Introduction, Arms Length pricing & Documentation

Transfer Pricing: Recent Country Experiences and developments

Special Session - I

Controversial Issues- International taxation

Special Session-II

Motivational LectureCultural Evening 5.30 pm Onwards

Our Session Chairmen

Our Speakers

Convention Team

Venue Date FeesGreen Court Club (G.C.C.) Friday, 21st & Saturday, 22nd 2750/-

Mira Bhayandar Road, Mira Road (East) December 2012

For Registrations you can also Contact 022-65568900/9224781595Email : [email protected]

CA Mahesh P. Sarda Prof. Roy Rohatgi(Chairman-Committee on International Taxation, ICAI), (Director - Foundation for International Taxation)

Shri. Girish Dave CA Gautam NayakChief Commissioner of Income-Tax, Presently Member & Advocate), (Past President, BCA & Partner- Contractor, Nayak & ITAT (Retd. Kishnadwala)

CA T. P. Ostwal CA Rashmin Sanghvi(Partner at M/s. T. P. Ostwal & Associates and IFA India Member) (Partner at Rashmin Sanghvi & Associates)

CA Mahesh P. Sarda, CA Dhaval Sanghavi, CA Paresh shah, CA Gautam Nayak,CA Darpan Mehta, CA Rashmin Sanghvi, CA Naresh Ajwani CA Vaishali Mane

07



CPE-36 hrs

CPE-6 hrs

CPE-6 hrs

ITAT Proceedings & Mock Tribunal

Program Schedule

Seminar on Internal Audit

Program Schedule

Venue GCC, Mira Road (E)

Date Saturday, 29th Dec.2012

Time 9.30 am to 5.30 pm

Fees Rs. 850/- for members, Rs. 650/- forCA students & Rs. 950/- for others.(Please add Rs. 100/- towardsCA Benevolent Fund as VoluntaryContribution)

Co-ordinators CA Ramanand Gupta – 9322231113CA Lalit Munoyat – 9820193508

Timings Topics Speakers9.30 am to 10.00 am Registration -

10.00 am to 11.30 am Preparation of CA Bhupendra ShahAppeal Papers/Ground ofAppeal and StayProceedings

11.30 am to 11.45 am Tea Break -

11.45 am to 1.00 pm ITAT Rules CA Bhupendra Shah

1.00 pm to 2.00 pm Lunch Break -

2.00 pm to 5.30 pm Mock Tribunal Live Performance

Venue Green Court Club (G.C.C.)Mira Bhayandar Road,Mira Road (East)

Date 30th December, 2012Timing 9.30 am to 5.30 pm.Fees Rs. 850/- for members,

Rs. 750 /- for CA students &Rs. 1000/- for others.(Please add Rs. 100/- towardsCA Benevolent Fund as VoluntaryContribution)

Co-ordinators CA Haresh Mehta - 9823137477CA Mita Modi-9702285086CA Pratik Soni

Timings Topics Speakers9.30 am to 10.00 am Registration -

10.00 am to 11.30 am ERM & Internal CA C. N. RushiAudit

11.45 am to 1.00 pm Role of Internal CA C. N. RushiAuditors-fraudprevention & detection

1.00 pm to 2.00 pm Lunch Break -2.00 pm to 3.30 pm Internal Audit- CA Satish Shenoy

codifyingBest Practices

4.00 pm to 5.30 pm Using CAATs for CA Manish PipaliaData Analytics

Certificate Course on Concurrent Audit of Banks

Program Schedule

Organized byInternal Audit Standards Board of the ICAI

Hosted byVasai Branch of WIRC of ICAI

Venue Green Court Club (G.C.C.)Mira Bhayandar Road, Mira Road (East)

Date 28th December 2012 to 6th January 2013 (Every Sunday)


Participation Fees Rs. 12,500/- payable by Cheque/DD in favour of "Secretary, ICAI" payable at Delhi

Course Chairperson CA Jyoti Singh, Secretary, Internal Audit Standard Board

Course Director CA Shweta Jain, Chairperson, VasaiBranch of WIRC of ICAI

Course Coordinators CA Kishor Vaishnav-9892194382CA Nitesh Shah-9821170150

For Registrations and 022-65568900/9224781595Details Please contact

Day Topics

December Inaugural Session28, 2012 Banking in India and Concurrent Audit in Banks

Legal and Regulatory FrameworkOrganizational Structure of Banks in India and Other Aspects

December Concurrent Audit Universe and29, 2012 Pre-commencement Planning Procedures

Concurrent Audit Procedures : AdvancesConcurrent Audit Procedures : Treasury and Investment Function- Part I

December Concurrent Audit Procedures :30, 2012 Treasury and Investment Function- Part II

Concurrent Audit Procedures : Deposits, Forexand Other Items - Part IConcurrent Audit Procedures :Deposits, Forex and Other Items - Part IIBasel II & III- Paradigm Shift

January Diligence Report for Banks4, 2013 Use of Technology in Concurrent Audit

Software Usage in Banks - CBS DemonstrationJanuary Audit in CBS Environment : Checks & Strategy5, 2013 Bankers Panel Discussion (GMs of Banks to

address)Revenue Audit and Credit Audit, IS & MigrationAuditsStock and Debtors' Audit, DP Audit

January Effective Concurrent Audit Reporting6, 2013 Case Studies by Participants

Objective Assessment

DIRECT TAX-

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

1. DTAA – AGREEMENT FOR EXCHANGE OF INFORMATIONWITH RESPECT TO TAXES WITH GUERNSEY {208TAXMANN 212 (ST.)}

The Central Government Vide notification no 30/2012 dated09/08/2012, in exercise of the powers conferred by section 90of the Income Tax Act, notifies that all the provision of theagreement between government of republic of India and stateof Guernsey for the exchange of information with respect totaxes as set out in the agreement will be given effect to theUnion of India w.e.f. 11th day of June, 2012.

2. TRANSFER PRICING – NOTIFIED PERCENTAGE UNDERSECTION 92C(2) (Second Proviso) FOR THE PURPOSE OFCOMPUTATION OF ARMS LENGTH PRICE {209 TAXMANN1(ST.)}

The CBDT vide its notification no 31/2012 dated 17th August,2012, in exercise of the powers conferred by section 92C(2)(Second Proviso), notifies that where the variation between thearm's Length Price determined under section 92C(2) and theprice at which international transaction has actually beenundertaken does not exceed 5% of the latter, the price at whichinternational transaction has actually been undertaken shall bedeemed to the arm's Length Price for the A.Y. 2012-13.

3. PRESS RELEASE – APPOINTMENT OF Dr. POONAMKISHORE SAXENA AS CHAIRPERSON OF CBDT. {209TAXMANN 1(ST.)}

Press Release no 402/92/2006-M, Dated 21st August 2012

Dr. Poonam Kishore Saxena has taken over as Chairperson,CBDT on 21st August 2012. She is an IRS Officer of 1975 batch.She holds a Master Degree in Economics from RajasthanUniversity and is also a Phd in Economics on the topic “Wideningthe Direct Tax – Efforts of the Central Government for economicgrowth in India.”

Dr Saxena was selected as member, CBDT in March, 2011. Priorto this appointment she worked as Director General(Investigation) in Jaipur for three years. During her long career,she has worked in Lucknow, Meerut, Ahmadabad, Jaipur, andDelhi in various areas like Administration of Income Tax,Appeals and Recovery.

4. AMENDMENT TO INCOME TAX (DISPUTE RESOLUTIONPANEL) (First Amendment) Rules, 2012 {209 TAXMANN3 (ST.)}

The CBDT, in exercise of the power under section 144C(14) of the Income Tax Act, vide notification no – 33/2012 dated 24thAugust 2012 gives the Income Tax (Dispute Resolution Panel)(First Amendment) Rules 2012. It amends Rule 3 of the IncomeTax (Dispute Resolution Panel) Rules 2009. Hitherto, Rule 3 (2)authorized board to assign by name three commissioner ofIncome Tax to each panel as a member who, in addition to theirregular duties as commissioner shall also carry the function ofthe panel,. This sub rule 2 has been amended by which theboard is now authorized to assign by designation (Earlier byName) three Commissioner of Income Tax to each panel as amember to carry on the function of a panel.

The sub rule 3 has been substituted where by the board is nowauthorized to assign one commissioner of Income Tax as a

LAWUPDATES

reserve member to each panel who shall also carry on thefunction of a panel, in place of any member, as and whenrequired by the Director General of Income Tax (InternationalTaxation).

The sub rule (3A) has been inserted where by it is provided thatthe Director General of Income Tax (International Taxation)may after giving the eligible assessee an opportunity of beingheard and after recording the reason transfer a case from onepanel to another panel.

5. DISPUTE RESOLUTION PANEL – RECONSTITUTION OFDISPUTE RESOLUTION PANEL AT MUMBAI – 1 {209TAXMANN 4 (ST.)}

The board in partial modification of Order 6/FT & TR/2012, andin exercise of power under section 144C of the Income Tax Act,reconstitutes the Dispute Resolution Panel at the Mumbai withthe approval of Chairman CBDT. The specific details of the orderare available at above citation..

6. INSTITUTIONAL MECHANISM FOR FORMINGDEPARTMENTAL VIEW ON CONTENTIOUS LEGAL ISSUES{209 TAXMANN 5 (ST.)}

The CBDT vide office memorandum dated 28th August 2012decided to set up Institutional Mechanism to formulate“Departmental view” on Contentious Legal Issues with a view toprovide clarity on Contentious legal issues, promoteconsistency of approach on a given issue and reduce litigation.The board provides the guidance on the followings:

a) Formation of central Technical Committee.b) Appointment of the Secretariat.c) Regional Technical Committee.d) Identification of Contentious legal Issues.e) Procedure at Regional Technical Committee.f) Work process of Central Technical Committee.g) Dissemination of “Departmental View”.The further details in this respect are available at abovecitation.

7. REPORT UNDER SECTION 115JC FOR COMPUTINGADJUSTED TOTAL INCOME AND ALTERNATE MINIMUMTAX OF A PERSON OTHER THAN COMPANY. {209TAXMANN 9 (ST.)}

The CBDT vide Notification No – 34 dated 28th August 2012gives Income Tax (Ninth Amendment) Rules, 2012. ItSubstitutes rule 40BA and Form No.29C. It came in to forcefrom 1st April 2013. The rule 40BA provides for report of anaccountant which is required to be furnished by the Assesseeunder section 115JC(3) of the Income Tax Act and which shallbe in Form No 29C. It substitutes form of report under section115JC of the Income Tax Act for computing adjusted totalincome and Alternate Minimum Tax for a person other thancompany.

8. ADVANCE PRICING AGREEMENT SCHEME {209TAXMANN 29 (ST.)}

The CBDT vide Notification No. 36/2012 dated 30th August2012 gives the Income Tax (Tenth Amendment) rules, 2012.where by it notifies an “Advance Pricing Agreement Scheme”. Itinserts rule 10F to rule 10T of Income Tax Rules 1962. Thefinance Act 2012 had inserted Section 92CC and 92CD in theIncome Tax Act, introducing the provision of Advance PricingAgreement. The Advance Pricing Agreement scheme came in toforce from 30th August 2012. The rules provides as under :

a) Rule 10F : Provides for meaning of the expression usedin the matter of Advance Pricing Agreement.

b) Rule 10G : Provides for persons eligible to apply.


November 2012

RECENT LAW UPDATES

c) Rule 10H : Provides for pre-filings consultation.

d) Rule 10I : Provides for advance pricing agreement.

e) Rule10J : Provides for withdrawal of application foragreement.

f) Rule 10K : Provides for preliminary processing ofapplication.

g) Rule 10L : Provides for procedure.

h) Rule 10M : Provides for terms of the agreement.

i) Rule 10N : Provides for amendments to application.

j) Rule 10O : Provides for furnishing of annual compliancereport.

k) Rule 10P : Provides for compliance audit of theagreement.

l) Rule 10Q : Provides for revision of an agreement.

m) Rule 10R : Provides for cancellation of an agreement.

n) Rule 10S : Provides for renewing an agreement.

o) Rule 10T : Provides for miscellaneous.It also insert rule 44GA which provides for procedure to dealwith the request for bilateral or multilateral Advance PricingAgreement.

It insert the following forms :

1) Form No 3CEC : Application for pre-filing a meeting.

2) Form No 3CED : Application for an Advance PricingAgreement.

3) Form No 3CEE : Application for withdrawal of AdvancePricing Agreement Request.

4) Form No 3CEF : Annual Compliance report on AdvancePricing Agreement

The further details of the notification is available at abovecitation.

9. PRESS RELEASE – RATIONALE BEHIND ADVANCEPRICING AGREEMENT SCHEME {209 TAXMANN 11 (ST.)}

The CBDT vide press release dated 31st August 2012 explainsthe rationale behind Advance Pricing Agreement schemeintroduced by the Minister of Finance vide Notification No.36/2012 dated 30th August 2012.

10.APPOINTMENT OF SHRI. H. L. KARWA, VICE-PRESIDENTOF ITAT AS PRESIDENT OF ITAT IN OFFICIATINGCAPACITY W.E.F. 01-09-2012 {210 TAXMANN 1 (ST.)}

Notification No. A-12023/2/2011-ADM.III(LA) dated13/09/2012

The Cental Government has appointed Shri. H. L. Karwa, Vice-President of Income Tax Appellate Tribunal (ITAT), as Presidentof that Tribunal in officiating capacity with effect from theforenoon of 1st September, 2012 till the post is filled on regularbasis.

11.INCOME TAX (ELEVENTH AMENDMENT) RULES, 2012 –INSERTION OF RULES 31ACB, 37J, FORM NO 26A & 27BA{210 TAXMANN 5(ST.)}

Notification No. 37/2012 [F. No. 142/18/2012-SO(TPL)] dated12/09/2012

CBDT has inserted Rule 31ACB therein notifying Form 26A asthe Form for furnishing certificate of accountant under the firstproviso to Sec 201(1) and also inserted Rule 37J therein

09

(cont)...RECENT LAW UPDATES


notifying Form 27BA as the Form for furnishing certificate ofaccountant under the first proviso to Sec 206C(6A)

12.RAJIV GANDHI EQUITY SAVINGS SCHEME (RGESS) –FINANCE MINISTER APPROVES OPERATIONALFEATURES {210 TAXMANN 10(ST.)}

Press Release dated 21/09/2012

The Union Finance Minister – Shri. P. Chidambaram approved anew tax saving scheme called “Rajiv Gandhi Equity SavingsScheme” (RGESS) exclusively for first time retail investors inSecurities Market. This scheme would give tax benefits to newinvestors who invest upto Rs. 50,000/- and whose annualincome is below Rs. 10 Lakh. The investor would get a 50%deduction of the amount invested from the taxable income forthat year. Under the scheme, those stocks listed under BSE 100or CNX 100 or those public sector undertakings which areNavratnas, Maharatnas and Miniratnas would be eligible. Inaddition, Exchange Traded Funds (ETFs) and Mutual Funds(MFs) that have RGESS eligible securities as their underlyingand are listed and traded in stock exchanges and settledthrough a depository mechanism have also been brought underRGESS. Investments are allowed to be made in installments inthe year in which tax claims are made. The total lock-in periodwould be 3 years including an initial blanket lock-in period of 1year commencing from the date of last purchase of securitiesunder RGESS. Department of Revenue will notify the schemeand SEBI will issue the relevant circulars to operationalize the scheme.

13.SECTION 48 – CAPITAL GAINS – NOTIFIED COSTINFLATION INDEX FOR FINANCIAL YEAR 2012-13 {210TAXMANN 13(ST.)}

Notification No. 38/2012 [F.No.142/02/2012-SO(TPL)]/SO2187[E] dated 17/09/2012

The CBDT has notified the Cost Inflation Index for Financial Year2012-13 as “852”.

14.INCOME TAX (TWELFTH AMENDMENT) RULES, 2012 –INSERTION OF RULE 21AB AND FORM NOS 10FA & 10FB{210 TAXMANN 20(ST.)}

Notification No. 39/2012 [F. No. 142/13/2012-SO(TPL)]/SO2188[E] dated 17/09/2012

CBDT has inserted Rule 21AB therein notifying Form 10FA asthe Form of Application for Certificate of Residence for thepurposes of an Agreement under Sections 90 & 90A to be madeby Applicant and Form 10FB as the Form of Certificate ofResidence for the Purpose of Section 90 & 90A to be issued bythe Assessing Officer.

15.DTAA OF INDIA WITH LIBERIA {210 TAXMANN 23(ST.)}

Notification No. 32/2012 [F.No.503/02/2010-FT&TR-II]/SO1877(E) dated 17/08/2012

The Cental Government has notified that all the provisions ofAgreement between the Government of Republic of India andthe Government of Republic of Liberia for the exchange ofinformation and assistance in collection with respect to taxesshall be given effect to in Union of India w.e.f. 30th day ofMarch, 2012.

INDIRECT TAX -

— Compiled by CA. Alpesh Shah |e-mail: [email protected] 86508

CIRCULARS & NOTIFICATIONS;

SYNOPSIS OF CIRCULARS & NOTIFICATION

Trade Cir. No. 9T of 2012 Date: 30/06/2012:-

By which department has given effect to the Budget proposalsregarding certain changes in the schedule entries under theMaharashtra Value Added Tax Act, 2002. These changes in taxrates are effective from 1st April 2012 (except otherwise stated)which are briefly explained below.

AMENDMENT TO SCHEDULE 'A'

Entry 9A , Entry 21A, Entry 45A, Entry 51,

Addition of new entry –

Entry 60, Entry 61

AMENDMENT TO SCHEDULE 'C'

Entry 4(a), Entry 10, Entry 12, Entry 41, Entry 58(b), Entry 75A,Entry 82A, Entry 83A, Entry 85A, Entry 99(a), Entry 104(c), Entry107(11)(f), Entry 108(l)(b), Entry 108 A, Entry 115,

AMENDMENT TO SCHEDULE 'D'

Entry 11, Entry 12,

Trade Cir. No. 10T of 2012. Date: 02/07/2012

Administrative relief in respect of import export licences coveredunder Schedule Entry C-39 of MVAT Act, 2002.


Refund through Electronic Clearing Service (ECS) has madeoptional With effect from 1st October 2012, to the dealers inMumbai only.


Regarding new procedure for Automatic cancellation of UnilateralAssessment Order under Sub-section (1) of section 23 of the MVATAct, 2002. has been introduced.


Regarding amendment to the certain laws administered by thesales tax department to give effect to the budget proposals.


Regarding grant of registration and administrative relief todevelopers & builders:

Key points

1. Separate officer will be assigned or obtaining Vat registrationnumber, for Builders & Developers.

MVATUPDATES

2. The department will not make any Pre-Visit to the place ofbusiness of the Developer before granting vat no.

3. After making application on the immediate next day the dealercan go for obtaining Vat no. irrespective of the date appearingon the E-vat application acknowledgment for attending to thevat dept.

4. If all documents submitted properly than the number can beobtained on the same day.

5. The dealer is required to make the application and also to obtainVat no. on or before 16-08-2012.

6. After obtaining the number, the dealer should pay the tax withinterest, penalty & fine for filling late return which is Rs.5,000 per return.

7. Apart from above the dealer is also liable to pay Compoundingfees of Rs.5,000 for all Unregistered period.

8. The dealer should file Quarterly Vat return in Form 233.

9. The dealer should make application for Administration reliefbefore 31-08-2012.

10. After obtaining vat no., paying of tax with interest &compounding fees & applying for administrative relief as statedabove, the Joint commissioner will grant administrative reliefwithin two days of applying of administrative relief.


Extention of Due Date for filing return for the period ending 30thJune, 2012

The due date for filing return has been extended from 31st July,2012 to 17th August, 2012.

FOR YOUR INFORMATION & REMINDER:

Late filing fees under MVAT and Profession Tax has made effectivefrom 1st August, 2012. Details are as under:

The Department of Sales Tax has issued Notification No.VAT.1512/C.R. 65/Taxation-1 dated 4th July, 2012 specifying that theprovisions relating to payment of late fee for filing returns beyonddue date under Maharashtra VAT Act and Maharashtra ProfessionTax Act will be effective from 1st August, 2012.

Vide Maharashtra Act No. VIII of 2012 published on 25th April,2012, the provisions under Maharashtra VAT Act and MaharashtraProfession Tax Act are amended and accordingly -

* Section 6(3) of Maharashtra Profession Tax Act, 1975 wassubstituted and provided that "Where an employer has failed to filesuch return within prescribed time, he shall pay, by way of late fee,an amount of rupees one thousand before filing of the said return....." in addition to the tax payable.

* Section 20(6) of Maharashtra VAT Act, 2002 was added andprovided that "Where a person or dealer fails to file return withinprescribed time, as provided under this section, then the saidperson or dealer shall, before filing of the said return,Â pay, by wayof late fee, an amount of rupees five thousand. ...." in addition tothe tax payable. Note that it will be applicable for all the returnspending irrespective of the period for which it relates.


November 2012

RECENT LAW UPDATES

RECENT CASE LAWS &OTHER DEVELOPMENTS / AMENDMENTS

CA. Hemant R. Shah | 98690 11148e-mail: [email protected]

1. ACIT vs. ICICI Securities Primary Dealership Ltd.(Supreme Court)

Reopening U/s 147 on “change of opinion” is notpermissible

For A.Y.1999-2000, the assessee claimed a deduction for Rs.19.86crores which was allowed by the AO in section 143(3) assessment.Subsequently, after the expiry of 4 years, the AO reopened theassessment U/s 147 on the ground that the said loss was a“speculative loss” and could not be allowed as a deduction. Theassessee filed a Writ Petition to challenge the reopening which wasallowed by the High Court on the ground that although the AO wasjustified in his analysis that there was escapement of income, therewas “nothing new” which had come to the notice of the Revenueand that reopening was based on a “mere relook” which was notpermissible. On appeal by the Department to the Supreme Court,the apex Court dismissed the appeal of Revenue on the followinggrounds:

The assessee had disclosed full details in the Return of Income in the matter of its dealing in stocks and shares. According to theassessee, the loss incurred was a business loss, whereas,according to the Revenue, the loss incurred was a speculative loss.Rejection of the objections of the assessee to the re-opening of theassessment by the AO vide his Order dated 23rd June, 2006, isclearly a change of opinion and therefore the Order re-opening theassessment was not maintainable.

2. CIT vs. Smifs Securities Ltd (Supreme Court)

“Goodwill” is an intangible asset eligible for depreciationU/s 32

Pursuant to an amalgamation of another company with theassessee, the difference between the consideration paid by theassessee and the net value of assets of the amalgamating companywas treated by the assessee as “Goodwill” and depreciation ofRs.54 lacs was claimed thereon U/s 32(1)(ii). The AO rejected theclaim on the ground that

i) “Goodwill” was not an “intangible asset” as defined inExplanation 3 to Section 32(1) and

ii) the assessee had not paid anything for the same.

The Tribunal and the High Court upheld the assessee'sclaim. On appeal by the Department to the Supreme Court,the Apex Court has dismissed the appeal filed by theRevenue on the following grounds:

Explanation 3(b) to Section 32 states that the expression“asset” shall mean an intangible asset, being know-how,patents, copyrights, trademarks, licences, franchises or anyother business or commercial rights of similar nature whichindicates that goodwill would fall under the expression “anyother business or commercial right of a similar nature“. Theprinciple of ejusdem generis would strictly apply whileinterpreting the said expression which finds place inExplanation 3(b). Consequently, “Goodwill” is an asset der Explanation 3(b) to Section 32(1) & eligible fordepreciation. Though the AO held that the assessee had not“paid” anything for the Goodwill, this cannot be acceptedbecause

Recent Supreme Court Decisions

(a) the CIT (A) & Tribunal (correctly) held that the differencebetween the cost of an asset and the amount paid in theprocess of amalgamation constituted “goodwill” and

(b) this aspect was not challenged by the Departmentbefore the High Court.

3. Sundaram Finance Ltd vs. ACIT (Supreme Court)

"Contingent deposits" received from customers is "income”

It is now well settled that in determining whether a receipt is liableto be taxed, the taxing authorities cannot ignore the legal characterof the transaction which is the source of the receipt. The taxingauthorities are bound to determine the true legal character of thetransaction. "Contingent deposits" received from leasing/hirepurchase customers with a view to protect from potential sales taxliability, which is credited to turnover, is assessable to income-tax(Bazpur Co-operative Sugar Factory (1988) 3 SCC 533distinguished).

4. CIT vs. Bongaigaon Refinery and Petrochemical Ltd.(Supreme Court)

Section 80HH & 80-I do not require maintenance of separatebooks:

S. 80HH & 80-I do not require maintenance of accounts Unit wiseand deduction can be claimed on the basis of consolidatedaccounts. To avoid litigation, the assessee should get the workingof Unit wise net profits certified by a Chartered Accountant.

Note: This impliedly approves Indian Aluminum 88 ITR 257 (Cal) &Mahindra Sintered 177 ITR 111 (Bom). Contrast with ArisudanaSpinning Mills Ltd. (SC)

5. Karanvir Singh Gossal vs. CIT (Supreme Court)

Section 234A to 234C are mandatory & can be levied even ifAssessment Order is silent

As held in Anjum M.H. Ghaswala 252 ITR 1 (SC), interest U/s 234Ato 234C is mandatory and in nature and there is no need for the AOto specifically recite in the Assessment Order that the said interestshall be levied. The Tribunal should consider whether the assesseeis eligible for waiver of interest as per NotificationNo.F.No.400/234/95-IT(B), dated 23rd May, 1996.

6. ACIT vs. M/s Gebilal Kanhaialal (HUF) (Supreme Court)

Section 271(1)(c) Explanation 5 immunity available even if tax isnot paid by due date of Return of Income (ROI)

In a search & seizure operation U/s 132, the assessee was foundwith unaccounted income of Rs. 42 lakhs. The assessee made adeclaration U/s 132(4) and offered the said amount to tax.However, neither the Return of Income was filed, nor was the tax due on the surrendered income was paid on the due date(31/07/1987). The tax was paid during the assessmentproceedings. The AO took the view that the assessee was notentitled to immunity from penalty under Explanation 5 to Section271(1)(c) as it had not paid the tax due on the surrendered incomeby the due date. The CIT (A) reversed the AO. The Tribunalreversed the CIT (A). The High Court (270 ITR 523 (Raj)) reversedthe Tribunal and upheld the assessee's claim. On appeal by theDepartment to the Supreme Court, the Apex Court dismissed theAppeal by the Revenue and upheld the Assessee's contention.

11The Institute of Chartered Accountants of India Vasai Branch of WIRC Newsletter November 2012

(cont)...RECENT CASE LAWS & OTHER DEVELOPMENTS/AMENDMENTS

maxims in law and would squarely apply to the present case;

(ii) The Department's contention that the assessee ought to havepurchased the alternative section 54EC NHAI bonds is also not wellfounded because if section 54EC confers a choice investing either inthe REC bonds or the NHAI bonds, the Revenue cannot insist thatthe assessee ought to have invested in the NHAI bonds.

3) Wealth Tax Officer v. Lallubhai Jogibhai Patel (GujaratHigh Court)

(TAX APPEAL Nos.179, 180 & 182 of 2000) (Date ofPronouncement 04/09/2012)

Net wealth not to include forfeited assets despite pendency ofAppeal on Valuation Date:

The Appellate Tribunal was right in law and facts in holding that thevalue of silver bars which stood confiscated under the Smugglersand Foreign Exchange Manipulators (Forfeiture of Property) Act,1976 could not be added to the wealth of the assessee despite thefact that the confiscation order was subsequently set aside inappeal and the appeal was pending on the date of valuation.

1) Kellogg India Pvt. Ltd vs. ACIT (ITAT Mumbai)

In fresh Assessment Order passed pursuant to remand by ITAT,assessee cannot be worse off than what he was in the originalAssessment Order:

The AO passed the Order U/s 143(3) in which he disallowed 50% ofthe expenditure on an ad-hoc basis. This was reduced to 25% bythe CIT (A). On further appeal by the assessee, the Tribunal setaside the matter to the AO to examine the issue afresh. In thesecond round of appeal, the AO disallowed 100% of theexpenditure on the ground that the assessee had already claimedthe same expense under some other head and that there was aclaim for double deduction. This was upheld by the CIT(A). Beforethe Tribunal, the assessee argued that once a matter has been setaside by the Tribunal, the assessee cannot be put into a worsesituation than what it was at the time of the original assessment. The Tribunal upheld the plea of the Assessee on the followinggrounds:

The Tribunal U/s 254(1) has no power to take back the benefitconferred by the AO or enhance the assessment. Once the matterhas been restored by the Tribunal, the income can not be enhancedfrom what was determined at the time of original assessmentproceedings, which was the subject matter of dispute before theTribunal. This proposition of law has been upheld by the SupremeCourt in Hukumchand Mills Ltd 62 ITR 232 (SC) and reiterated inMcorp Global 309 ITR 434 (SC). Therefore, the enhancement ofassessment by making 100% disallowance in respect of free food allowance can not be sustained and the same is restricted to 50%,as was made by the AO in the original round of proceedings.

2) M/s Blue Steel Engineers P. Ltd. Vs. DCIT (ITATMUMBAI)

ITA No.6411 /Mum/2010, A.Y.2005-06 (Date of pronouncement:11/05/2012)

Ad hoc disallowance of foreign travelling expenses U/s 14A withoutpointing out any specific instance is not valid

Directors of the company have undergone foreign travelling for thepurpose of export and looking for the business avenues abroad.The details submitted by the assessee though only provides thedate of travelling, details of country visited and amount of fare, visacharges and other miscellaneous expenses incurred, however, theA.O. has not brought anything on record to show that the foreign travelling was for personal purposes. Once the foreign travellinghas been accepted for the purpose of business then part of theamount cannot be disallowed on account of personal user unless itis established that there was personal and non business

Recent Tribunal Decisions

Recent High Court Decisions1) Netapp BV vs. The AAR (Delhi High Court)

Mere filing of Return of Income disbars an advance rulingapplication

For A.Y.2009-10, the assessee filed a Return of Income (ROI) U/s 139(1) on 31/03/2010. On 17/06/2010, it filed an applicationbefore the AAR seeking a ruling in respect of the transactions thathad been entered into in that year. The AAR rejected the applicationon the ground that as the assessee had filed a ROI, the questionsraised in the application were “already pending” before an Income-Tax Authority and so the application was not maintainable underthe proviso to section 245R(2). The assessee filed a Writ petitioncontending that:

(a) mere filing of a ROI did not mean that all possible questionswere “pending” if the AO had not raised the issue and

(b) as the AAR had, in the past, admitted applications even thoughROIs were filed, it could not change its stand.

The Hon. High Court, however, dismissed the Petition on thefollowing ground:

Upon a return of income being filed, the matter is “pending“, in thesense that the AO has the right to take such steps, includingissuance of notice. The rationale for the bar in the Proviso to s.245R(2) is that if the applicant wishes to plan its affairs andtransactions in advance, it is free to do but once it proceeds to file areturn, the AAR's jurisdiction to entertain the application foradvance ruling is taken away, because the AO would then be seizedof the matter, and would possess a multitude of statutory powers toexamine and rule on the Return. The fact that the AAR followed a different practice in the past is irrelevant because there is noestoppel against a statute.

2) CIT vs. Cello Plast (Bombay High Court)

Fact that Section 54EC bonds were available during the 6 months &that there were alternative bonds available are irrelevant if thebonds not available on the last date:

The assessee sold factory building on 22/03/2006 and earned LTCGof Rs.49.36 lakhs. The LTCG was invested in Section 54EC Bonds ofRural Electrification Corporation (REC Bonds) on 31/01/2007,beyond the period of 6 months (21/09/2006) specified U/s 54EC. The assessee claimed that the delay was due to the fact that for theperiod from 04/08/2006 to 22/01/2007, the bonds were notavailable and the investment was made when available. TheTribunal allowed the assessee's claim. Before the High Court, theDepartment argued that:

(a) even if the Bonds were not available for a part of the period,they were available for some time in the period after the transfer(01/07/2006 to 03/08/.2006) and the assessee ought to haveinvested then &

(b) Section 54EC Bonds issued by National Highway Authority(NHAI) were available and the assessee could have invested inthem.

The Hon. Mumbai High Court dismissed the Appeal filed by theRevenue on the following grounds:

(I) The Department's contention that the assessee ought to haveinvested in the period that the section 54EC bonds were available(01/07/2006 to 03/08/2006) after the transfer is not well founded.The assessee was entitled to wait till the last date (21/09/2006) toinvest in the bonds. As of that date, the bonds were not available.The fact that they were available in an earlier period after thetransfer makes no difference because the assessee's right to buythe bonds upto the last date cannot be prejudiced. Law does notcompel a man to do that which he cannot possibly perform and thelaw does not expect a party to do the impossible - are well known


November 2012


expenditure. Since no basis has been given nor anything adversehas been brought on record, the ad hoc addition cannot be allowed.

3) Govind Properties Pvt. Ltd. Vs. ACIT (ITAT MUMBAI)

(ITA No. 6665/Mum/2010 A.Y.2007-08 Date of pronouncement:23/05/2012)

Companies which are liable to tax U/s 115JB have to pay interest U/s 234B/234C

Issue is covered by the decision of Hon'ble Supreme Court in thecase of JCIT Vs Rolta India Ltd. (330 ITR 470) wherein it has beenheld that in case of company which are liable to tax U/s 115JB /Minimum Alternative Tax (MAT), have to pay interest U/s234B/234C of the Act.

4) K.K. Nag Ltd. v. Additional Commissioner of Income-tax[ITAT PUNE]

IT Appeal Nos. 1304 & 1305 (Pune) of 2010 [A.Y.2005-06 &A.Y.2006-07] (25/05/2012)

Without referring the matter to DVO, A.O. cannot compute CapitalGains U/s 50C

Section 50C of the Act prescribes for adoption of full value ofconsideration as the value adopted by the State Govt. Authority forthe purposes of payment of Stamp duty in respect of such transferwhere the consideration received or accruing as a result of thetransfer of a capital asset being land or building or both is less thanthe value adopted by such an Authority

The provisions of section 50C(1) are further circumscribed bysection 50C(2) where it is provided that where an assessee claimsbefore the A.O. that the value adopted or assessed by the Stamp valuation Authority U/s 50C(1) exceeds the FMV of the property ason the date of transfer, then the A.O. may refer valuation of thecapital asset to the Valuation Officer. In this case, factually it wasevident that the assessee had claimed in the Return of Income itselfthat the value adopted by the Stamp valuation Authority exceededthe FMV as on the date of transfer as provided in section 50C(2)(a)of the Act.

The Tribunal held that under the circumstances the AO ought tohave referred the matter to the Valuation Officer instead ofstraightaway deeming the value adopted by the Stamp valuationAuthority as the full value of consideration. The point made out bythe Revenue that it is only discretionary on the part of the AO torefer the matter to the Valuation Officer is quite untenable. Thediscretion vested in the AO, in our considered opinion, in such asituation is required to be used in a judicious manner. Section 50Cof the Act is a deeming provision and ostensibly involve creation ofan additional tax liability on the assessee and therefore,notwithstanding the presence of the expression “may” in section50C(2)(a), the AO ought to have referred the matter to theValuation Officer for ascertaining the value of the capital asset inquestion. Therefore, in this view of the matter without going intofurther merits of the dispute, we set aside the order of the CIT(A)and direct the AO to adopt the course mentioned in section50C(2)(a) of the Act and thereafter proceed to determine capitalgain on sale of land and building after giving a reasonableopportunity to the Assessee.

5) Smt. Usha Vaid v. ITO, Dasuaya [ITAT AMRITSAR]

(IT Appeal No.98 (Asr.) of 2011) (A.Y.2006-07) (Date ofPronouncement 27/07/2012)

Exemption U/s 54F is available even if construction is notcompleted but the amount invested within the stipulated period:

U/s 54F, if the assessee being an individual, the capital gain whicharises from the transfer of any long term capital asset, not being aresidential house, and the assessee had, after the date of transfer,purchased, or has within a period of three years after that dateconstructed, a residential house (the new asset), then the capital

gain is exempt, if whole of the net consideration of the originalasset is invested in the new asset, i.e., residential house.

The question arose as to whether the assessee had fulfilled theconditions U/s 54F or not. The assessee had invested the entire netconsideration within three years after the date of transfer of theoriginal asset. The words mentioned in section 54F are that theamount should be invested in the construction of a residentialhouse. Therefore, once the assessee has invested the entire netconsideration into construction of a residential house, then it is notnecessary that the residential house should have been completedwithin three years from the date of transfer of the original asset.The residential house may be completed even after completion ofthree years. In such a situation, the assessee is entitled toexemption U/s 54F.

6) Adidas Sourcing Limited vs. ADIT (ITAT Delhi)

What ingredients are required for services to be assessable as "feesfor technical services" U/s 9(1)(vii)

To constitute “fees for technical services”, it is necessary that somesort of 'managerial', 'technical' or 'consultancy' services shouldhave been rendered in consideration. The terms 'managerial','technical' or 'consultancy' do not find a definition in the Income-taxAct, 1961 and need to be interpreted based on their understandingin common parlance. Services rendered under a Buying ServicesAgency agreement are routine services offering procurementassistance. They consist of negotiating between the Principal andthe manufacturers for purchase of merchandise. The fees for suchservices does not constitute "fees for technical services" U/s9(1)(vii).

7) The Dy. CIT-8(3) Vs. M/s Shantivijay Jewels Ltd. [ITATMumbai]

(ITA No.7485/Mum/2010 – A.Y.2003-04)(Date of Order :05/09/2012)

No Penalty on tax payable as per MAT provisions, if tax undernormal Provisions is 'Nil'

On identical facts in ITA No.6600/Mum/2011, wherein the Tribunalheld that penalty cannot be levied U/s 271(1)(c) when the incomeis computed as per the provisions of Section 115JB of the Actfollowing the decision of Hon'ble Delhi High Court in the case of CITVs. Nalwa Sons Investments Ltd. (2011) 37 ITCL 218 (ITANo.1420/2009).

1) Service Tax Return to be filed by 25/10/2012 shall be forthe period from 01/04/2012 to 30/06/2012

Service Tax (Fourth Amendment) Rules, 2012 –Amendment in rule 7

Notification No. 47/2012 ST, dated 28/09/2012

In exercise of the powers conferred by sub-section (1) read withsub-section (2) of section 94 of the Finance Act, 1994 (32 of 1994),the Central Government hereby makes the following rules further to amend the Service Tax Rules, 1994, namely:-

1. These rules may be called the Service Tax (Fourth Amendment)Rules, 2012 and shall come into force on the date of theirpublication in the Official Gazette.

2. In the Service Tax Rules, 1994, in Rule 7, in sub-rule (2), thefollowing proviso shall be inserted, namely:

“Provided that the Form 'ST-3' required to be submitted by the 25thday of October, 2012 shall cover the period between 1st April to30th June, 2012 only.”

2) Due Date is extended for Annual Return Filing (NonXBRL) with ROC to 03/11/2012 & 22/ 11/2012

General Circular No.30/2012, Dated 28th September, 2012

OTHER RECENT AMENDMENTS

11The Institute of Chartered Accountants of India Vasai Branch of WIRC Newsletter November 2012oveTThe Institute of Charrtered Acccountanntss of Inndia Vasai Branch of WIRCC NNewsletter NNo



Filling of Balance Sheet and profit and loss Account by companies inNon-XBRL for the accounting year commencing on or after01/04/2011

The Ministry has issued general circulars No.21/2012 dated28/09/2012 and No.28/2012 dated 03/09/2012 extending time forfiling e-form 23AC (Non-XBRL) and 23ACA (Non-XBRL) up to15/10/2012 or within 30 days from the date of AGM whichever islater.

The revise e-forms 23AC (Non-XBRL) and 23ACA (Non-XBRL) havenow been notified vide notification dated 24/09/2012 and shallcome into effect from 30/09/2012.

In order to ensure smooth filing and to avoid last minute rush, it isinformed that with the approval of the Competent Authority, thedue date for filing of e-forms 23AC (Non-XBRL) or 23ACA (Non-XBRL) as per new schedule VI is now further extended in followingmanner without any additional fees:

(a) Company holding AGM or whose due date for holding AGM is onor before 20/09/2012, the time limit will be 03/11/2012 or due dateof filing, whichever is later.

(b) Company holding AGM or whose due date for holding AGM is onor after 21/09 /2012, the time limit will be 22/11/2012 or due dateof filing, whichever is later.

3) New Nature of Payments have been introduced underOLTAS Challan No.ITNS 281

4 new categories of payment have been added to the existing list of32 categories. The revised list is as under:193 – Interest onSecurities

194 – Dividend

195 – Other sums payable to a non-resident

4BB – Winning from Horse race

4EE – Payments in respect of Deposits under National SavingSchemes

4LB – Income by way of interest from infrastructure debt fundpayable to a non-resident

4LC – Income by way of interest from specified company payable toa non-resident

6CA – Alcoholic liquor for human consumption

6CB – Timber obtained under forest lease

6CC – Timber obtained other than forest lease

6CD – Any other forest produce not being timber or tendu leaves

6CE – Scrap

6CF – Parking Lot

6CG – Toll Plaza

6CH – Mining and Quarrying

6CI – Tendu Leaves

6CJ – Minerals

6CK – Bullion and Jewellery

92A – Payment to Govt. Employees other than Union Govt.employees

92B – Payment of Employees other than Govt. Employees

94A – Interest other than Interest on Securities

94B – Winning from lotteries and crossword puzzles

94C – Payment of contractors and sub-contractors

94D – Insurance commission

94E – Payments to non-resident Sportsmen/Sport Associations

94F – Payments on account of Re-purchase of Units by MutualFunds of UTI

94G – Commission, prize etc. on sale of Lottery tickets

94H – Commission or Brokerage

94I – Rent

94J – Fees for Professional or Technical Services

94K – Income Payable to a resident assesse in respect of units of aspecified Mutual Fund or of the Units of the UTI

94L – Payment of Compensation on Acquisition of CertainImmovable property

96A – Income in respect of Units of non-residents

96B – Payments in respect of Units to an Offshore Fund

96C – Income from foreign currency Bonds or Shares of IndianCompany payable to a non-resident

96D – Income of Foreign Institutional investors from securities

4) Serv ice por t ion in execut ion of a workscontract–Revised Rules w.e.f. 01/07/2012

Service Tax (Determination of Value) Rules, 2006 amended videnotification No.11/2012-ST, DATED 17/03/2012., to be effectiveafter Section 66B comes into force i.e. w.e.f. 01/07/2012[NOTIFICATION NO. 19/2012-SERVICE TAX, DATED 05/06/2012]

1) Service portion in execution of a works contract

Works contract has been defined in section 65B of the Act as acontract wherein transfer of property in goods involved in theexecution of such contract is leviable to tax as sale of goods andsuch contract is for the purpose of carrying out construction,erection, commissioning, installation, completion, fitting out,improvement, repair, renovation, alteration of any building orstructure on land or for carrying out any other similar activity or apart thereof in relation to any building or structure on land.Typically every works contract involves an element of sale of goodsand provision of service. In terms of Article 366(29A) of theConstitution of India transfer of property in goods involved inexecution of works contract is deemed to be a sale of such goods. Itis a well settled position of law, declared by the Supreme Court inBSNL's case [2006(2) STR 161 (SC)], that a works contract can besegregated into a contract of sale of goods and contract of provisionof service. This declared list entry has been incorporated to capturethis position of law in simple terms.

Further, with a view to bring certainty and simplicity the manner ofdetermining the value of service portion in works contracts will begiven in the Valuation Rules.

2) Would labour contracts in relation to a building or structuretreated as a works contract?

No. Labour Contracts do not fall in the definition of works contract.It is necessary that there should be transfer of property in goodsinvolved in the execution of such contract which is leviable to tax assale of goods. Pure labour contracts are therefore not workscontracts and would be leviable to service tax like any other serviceand on full value.

3) Would contracts for tailoring of clothes or development ofphotographs also be treated as works contracts as these are alsofor carrying out a particular work?

No. The phrase used is 'works contract' and not work contract.'Works' has a defined and accepted legal meaning. As per Black's Law dictionary 'works' means 'buildings or structures on land'.Moreover works contract has been defined in the Act as contract forcarrying out specified activity, like construction, erection,


November 2012

commissioning, installation, completion, fitting out, improvement,repair, renovation, alteration etc., or a part thereof in relation toany building or structure on land. Therefore contracts which do notpertain to building or structures on land would be out of the ambit ofworks contracts.

4) Would contracts for construction of a pipeline or conduit becovered under works contract?

Yes. As pipeline or conduits are structures on land contracts forconstruction of such structure would be covered under workscontract.

5) Would contracts for erection commissioning or installation ofplant, machinery, equipment or structures, whether prefabricatedor otherwise be treated as a works contract?

Such contracts would be treated as works contracts if -

Transfer of property in goods is involved in such a contract; and

The machinery equipment structures are attached or embeddedto earth after erection commissioning or installation.

6) What is the scope of 'building or structure on land'?

Buildings and structures on land means not only buildings orstructures attached to earth but also things permanently fastenedto a building or structure attached to earth.

7) Would contracts for painting of a building, repair of a building,renovation of a building, wall tiling, flooring be covered under'works contract'?

Yes, if such contracts involve provision of materials as well.

8) What is the way to segregate service portion in execution of aworks contract from the total contract?

A simplified manner for determining the value of service portion ofa works contract from the total works contract is given in Rule 2A ofthe Service Tax (Determination of Value) Rules, 2006 (which will beamended partially for the negative list). In brief, the value of theservice portion is the gross amount charged for the works contractless the value of transfer of property in goods involved in theexecution of the said works contract.

5) Stamp Papers valid even after six months of Purchase

According to the Supreme Court Judgement dated 19/02/2008 inthe case of Thiruvengada Pillai vs. Navaneethammal and Anr., thestamp papers do not have any expiry period. Relevant extract fromSC judgement is reproduced herein below:

“The Indian Stamp Act, 1899, nowhere prescribes any expiry datefor use of a stamp paper. Section 54 merely provides that a personpossessing a stamp paper for which he has no immediate use(which is not spoiled or rendered unfit or useless), can seek refundof the value thereof by surrendering such stamp paper to theCollector provided it was purchased within the period of six monthsnext preceding the date on which it was so surrendered. Thestipulation of the period of six months prescribed in Section 54 isonly for the purpose of seeking refund of the value of the unused stamp paper, and not for use of the stamp paper. Section 54 doesnot require the person who has purchased a stamp paper, to use itwithin six months. Therefore, there is no impediment for a stamp paper purchased more than six months prior to the proposed dateof execution, being used for a document.

Compiled by CA. Abhishek Agrawal |

e-mail: [email protected] |

9223579583

M-Commerce refers to monetary transactions done through amobile device, involving person to person /person to merchant/person to Government etc. For the vast majority of population inIndia, paying bills, saving money, or sending cash to familymembers in another village, is a dangerous, time consuming,and expensive prospect. With mobile users are increasing day byday mobile money transfer and payment services provide apotential solution to connect the millions of people who do not haveaccess to formal financial services.

With the growth of smart phones, tablets and mobile devices and the high penetration of mobile communications in India hasenhanced business opportunities, mobile commerce or M-commerce has started to gain prominence amongst the digitalmarketplace. E-commerce companies had to await for a decade forit to take off but M-commerce is moving at a faster pace. Accordingto an eBay study and survey, Mobile Assisted Commerce (MAC) isset to come to the mainstream in India in 2012. With reductions insmart phones prices and increased 3G penetration, m-commerce isset to increase from end of 2012.M-commerce in India is primarily dependent on network operators,thus the recent advertisement showing a girl buying bags after hermother sends money 'through mobile' or the one showing a friendhelping another with Rs 65 through his mobile (for a drink ofcourse!) are just the examples of companies trying to tap the m-commerce market in the country. Companies in India have seentremendous demand of m-commerce in India. Indians beingbargain hunters uses MAC for price comparison and then do theactual purchase.A study by digital news website, Mashable, says that 47% of smartphones owners and 56% of tablet owners plan to purchase moreproducts on their respective devices in the future. The market isvirgin and with the betterment of e-commerce in general andmobile payment gateways in particular, change in perspective isexpected.Reserve Bank of India approved mobile payment for merchanttransactions-the proposal to extend payment facility was put forthby National Payment Corporation of India (NPCI). NPCI rolled out pilot projects with 6 banks, viz ICICI Bank, Union Bank of India,State Bank of India, Canara Bank, Standard Chartered Bank, and Kotak Mahindra Bank. In May 2011, the RBI relaxed the norms formaking payment through mobile phones; it has increased the limitof virtual money a user can load on a cell phone to Rs. 50,000 fromRs. 5,000.There are lots many benefits to consumers:1. Safer alternative to cash2. Customer has a wider choice of services to avail like shopping,

making utility bill payments, mobile top-up, buying tickets andcharity donations.(To be launched)

3. Convenience of use, Place and Time agnostic transaction /shopping capability

4. Easy to adopt as any mobile handset will be compatible to thisservice

5. Easy to save – easy to splurge for the Youth segment6. Multiple options for funding his account with merchant partner

using credit card, internet banking and debit cards along withcash payment at authorized retailer.In the end just want to say that in the fast growing technologyenvironment M-Commerce is the future.


IT CORNER - M COMMERCE

11The Institute of Chartered Accountants of India Vasai Branch of WIRC Newsletter November 2012oveTThe Institute of Charrtered Acccountanntss of Inndia Vasai Branch of WIRCC NNewsletter NNo



November 2012

Editor: CA. Shweta Jain Published by Vasai Branch of Western IndiaRegional Council of The Institute of Chartered Accountants of India andprinted at Finesse Graphics and Prints Pvt. Ltd., 309, Parvati Ind. Est.,Sun Mill Compound, Lower Parel, Mumbai 400 013. Tel. : 40364600

The views and opinions expressed or implied are those of the authors orcontribution and do not necessarily reflect those of Vasai Branch.Unsolicited articles and transparencies are sent in at the owner's riskand the publisher accepts no liability for loss or damage. Material in thispublication may not be reproduced, whether in part or in whole, withoutthe consent of Vasai Branch.

DISCLAIMER: The Vasai branch is not in any way responsible for theresult of any action taken on the basis of the advertisement published inthe Newsletter. The members, however, may bear in mind the provision ofthe Code of Ethicswhile responding to the advertisements.

To

Undelivered please return to :

Address:Centre, Mira Road(E),Thane-401107Telephone: 65568900Email: [email protected]: www.vasai-icai.org

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

Office No. C-, 310/311, Shanti Shopping

Designed and Printed by Finesse • +91-22 4036 4600

Appeal to All the Members of Vasai Branch of WIRCThe Vasai Branch of WIRC of ICAI since inception has been trying to prepare Vasai Branch Directory for the benefit of Members, but due to incompletedetail of Members we could not proceed.

We are again requesting you to kindly fill up your details in the form attached and forward the same at Vasai Branch office {Add:- C- Wing 310/311,Shanti Shopping Centre, Opp. Railway Station, Mira Road(East). Contact:-022-65568900/28102193}or you can send the same through scan andemail us at [email protected]

This time we hope that your kind cooperation and support will take place and we will surely proceed towards Vasai Branch Directory.

Membership Form is attached with this Newsletter. Please fill it and send to us as soon as possible.

Thanks & Warm Regards

CA Shweta JainChairperson

Vasai Branch of WIRC of ICAIInvites You & Your Family

FOR

IT’S 7TH ANNUAL DAY CELEBRATION ONSaturday, 22nd Dec. 2012 From 5.30pm Onwards

At GCC Club Mira Road.

Program Schedule

5.30pm to 6.00pm Welcome to invitees & Dignitaries

6.00pm to 7.00pm Musical Nights

7.00pm to 8.00pm Dance Performances By Children & Students

8.00pm to 9.00pm Dance Performances By Members

9.00pm to 10.00pm DJ Night (Rock the Floor)

Programme Chairperson CA Shweta Jain -9920737198

Co- ordinators CA Ramanand Gupta- 9322231113CA Preeti Agrawal- 9320059238

Venue Lawn No.2 Green Court Club (GCC), Mira Bhayandar Road Mira Road (East)

Note:-

Members & Children interested to perform on Annual Day are requested to send their entries to the branch.( Choreographer is available), For FurtherDetails Please Contact at Branch to Trupti Pimple :- 022-65568900/9221416142

Kindly enroll yourself with your family with Branch in advance to avoid any inconveniences.

Documents

Only BRANCH OF WIRC NEWSLETTER - Institute of Chartered ...vasai-icai.org/resource/Image/Vasai Branch Newsletter Ocober-Nove… · CA Dushyant Chaudhary CA Anil Kabra CA Vikas Soni