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MANAGING COMMITTEE

VOLUME - VII SEPTEMBER 2015l

Baroda Branch of Western India Regional Council ofThe Institute of Chartered Accountants of India

The Institute of Chartered Accountants of India(Setup by an Act of Parliament)

INDEX

CA. Yash N Bhatt 99243 88339

CA. Viral K Shah 98243 62211

CA. Arpan Dodia 98983 83530

CA. Dhiren Parikh 93762 11099

CA. Abhishek Nagori 94260 75397

CA. Nayan Kothari 98244 33445

CA. Kejal Pandya 98259 77220

CA. Utpal Shah 98250 28960

CA. Hitesh Agrawal 99980 28737

Chairman

Vice-Chairman

Secretary

Treasurer

Ex-officio

Immediate Past Chairman

Committee Member &Study Circle Convener

Committee Member

Committee Member

EDITORIAL TEAM

CA. Yash Bhatt

CA. Hitesh Agrawal

CA. Jay Shah

CA. Sanjay Joshi

Forthcoming Events ... 02

Direct Tax Updates ... 02

Judicial Decisions on Excise andService Tax ... 03

3D ... 03

Indirect Tax Updates ... 05

FAQs on IFRS transactions ... 06

ICAI CORNER ... 08

Highlights of Key Changes ... 10

Due Date Planner ... 10

PhotoFlash ... 11

THE INSTITUTE OF CHARTEREDACCOUNTANTS OF INDIA

Tel. :E-mail :

Web :

ICAI Bhawan, Post Box No. 7100,Indraprastha Marg, New Delhi - 110002.

+91 (11) 39893989president@icai.org

www.icai.org

“ICAI Bhawan”, Kalali-Tandalja Road, Atladra,Vadodara - 390 012. +91 8511077115

+91 8511125959+91 (265) 2681115 / 2680593

baroda@icai.orgwww.baroda-icai.org

BARODA BRANCH OF WIRC OF ICAI

M.:Chairman Mobile:

Telefax :E-mail:

Web :

WESTERN INDIA REGIONAL COUNCIL

Tel. :Email :

Web :

ICAI Tower, Plot no C-40, G BlockOpp MCA Ground, Bandra Kurla Complex,

Bandra (E), Mumbai - 400 051+022-33671400/33671500

wirc@icai.orgwww.wirc-icai.org

As we entered in the month of September, the world in general & Indian economy in

particular is reeling under mixed signals. Some says that the worst is in existence.

However there are mixed feelings as the industries are facing the financial problem at one

end & Indian existing government is very optimistic & coming out with different plans for

capital base industries & financial aid for Indian citizens below poverty line. To add,

government has one more challenge of poor monsoon across the country. Analysts

indicate that the revival of economic growth of India is real and the evidence is visible

from a variety of sectors. However no confidential motions are being reciprocated by

industrialists from varied sectors.

Under these mixed challenges, CA fraternity has equal challenges of completing the

Statutory Financial Audit under the new enactments before 30th of Sept, 2015. Black

money Act has its own challenges & many disclosure and compliance standards need to

be observed including the role of ICDS for 2nd quarter of Advanced Tax. I trust, by this

time all the members have pad up for their challenging role as an Auditor.

The conference on International Taxation was a grand success & best of the best faculties

across the nation have shared on recent trends & emphasized on more development &

challenges to come in this area.

As all of you are aware that WIRC and Central Council are going to elect new members in

the Council in the forthcoming Elections to be held on 4th and 5th December 2015.

During the call of nation in May 2015 to choose the leader of our democratic nation,

Baroda Branch had started a special campaign for Elections 2015 to urge voters to come

forward and vote. Once again, Baroda Branch is urging the members to keep their dairies

open for December 4th and 5th to choose the able representatives from our fraternity on

the WIRC and Central Council platform.

CA. Yash N. Bhatt

Chairman

Baroda Branch of WIRC of ICAI

2Reality is that which, when you stop believing in it, doesn't go away

Forthcoming Events

CPE 2

Day & Date :

Time :

Topics :

Faculty :

Mentor :

Venue :

Fees :

Tuesday, September 08, 2015

06.00 pm to 08.00 pm

Conference Room, ICAI Bhawan

Rs. 200/- (for Non-Members)

Removal of goods under excise & import of inputunder FTP

CA. Jigar Parikh

Mr. Sreeram Kaza, GM Taxation, Alembic Ltd

STUDY CIRCLE EVENT

Direct Tax UpdatesWritten by CA. Narendra Hindocha

1. Forms of Returns

Forms ITR 3,4, 5,6 and 7 have been notified which will now

enable us to file returns of business income and income of

corporates.

There are

There are number of similar issues including claim

for setoff of unabsorbed losses against business income

assessed under a different head or considering the profit on

sale of depreciable assets as long term gains or addition of

cess on rate prescribed in DTAA.

The new forms, inter alia, require ask for details of all bank

accounts, Adhar numbers. Passpor t numbers, CSR

expenditure, deduction u/s 32AC, date of formation of HUF,

rate of interest and remuneration paid to and changes in

partners, interest to nonresidents, amounts under capital

gains scheme which is unutilized, claim for benefit under

DTAA, foreign assets and income, details of expenditure and

income for agriculture etc.

The schedules for income under different heads, depreciation,

unabsorbed losses, MAT calculations, income outside India

deductions etc are required only if applicable which is hardly a

relief in times when returns are being prepared by software

and whether software attaches such blank schedules or not is

hardly relevant for us.

I have been wondering about the wisdom of notifying new

forms every year. In earlier times, the forms did not change

every year and even after change, returns in old forms were

filed and accepted. I am sure forms can be devised which can

be used for number of years in spite of changes in Income-tax

Act(assuming there is justification for such changes every

year)

E filing sometimes makes forms more powerful than

substantive law. judicial decisions that allow

remaining 50% of additional depreciation in next year, in

case of assets used for less than 180 days. However, you

may not be able to make the claim as there is no place in

the form.

2. Cost inflation index

3. Carry forward of excess expenditure in case of CharitableTrusts

4. Effective date of new condition in section 80IB(10)

5. Disallowance u/s 40(a)(ia) when tax deducted under wrongprovision

For the computation of long term capital gains, videNotification dated 24th July, 2015, 1081 is notified as the costinflation index for the financial year 2015-16.

From a prima facie reading, provisions of Income-tax Actrelating to Charitable Trusts allow exemption of income spentfor the objects of the trust and in case the amount spentexceeds the income, `Nil’ income may be reported. Somejudicial decisions allowed carry forward of amount spent inexcess of the income, to be adjusted against future income,although there is no provision allowing carry forward of loss ordeficit as far as such trusts are concerned.

Decision in case of Anjuman-E-Himayath-E-Islam v.Assistant Director of Income-tax (Exemption)-IV, Chennaireported at [2015] 59 taxmann.com 379 (Chennai - Trib.)appears to logically explain and restrict the right for such carryforward.

According to the decision, excess application of funds overand above income of trust can arise only when funds areapplied from the corpus of the trust, accumulated funds, loansor goods and services received from the creditors. Whenfunds are applied from borrowed funds or by way of sundrycreditors the same can be treated as application of funds in theyear in which such loan/sundry creditors are repaid from theincome of the trust.

Section 80IB(10) allows deduction in respect of profits ofHousing projects. To clarify and avoid granting benefit inunintended cases, there was change of law with effect fromApril 1, 2005. Accordingly, the deduction was restricted tocases where area utilised for shops and commercialestablishments does not exceed 5 per cent of aggregate built-up area of housing project or 2,000 sq. feet, whichever wasless. Normally this would be understood as applying toAssessment Year 2005-06 onwards, but this would be unfairfor projects which were in progress. High courts had held thatthe amendment

Thisview is now

Courts have generally looked upon 40(a)(ia) as an unfair incases of failure to deduct tax at source or deposit it with theGovernment within prescribed time. Earlier decisions held

However, when amount is applied fromthe corpus fund or accumulated fund the same cannot betreated as application of funds under section 11, becausesuch funds have already been exempt from the income oftrust in the year in which they are received or such amountis set aside.

does not apply to projects where approvalof local authority was received prior to April 1, 2005.

confirmed by Supreme Court in case of CITv.Sarkar Builders reported at 375 ITR 392

Baroda Branch of WIRC of ICAI

A man with outward courage dares to die; a man with inner courage dares to live3

Judicial Decisions on

Excise and Service TaxReviewed By CA. Anirudh Sonpal

that the disallowance will apply onlyin case of total non-deduction and notin case of deduction at lower rate.

holding that the expression "taxdeductible at source under ChapterXVII-B" occurring in section 40(a)(ia)has to be understood as tax deductibleunder the appropriate provision ofChapter XVII-B. Therefore, if tax isdeductible under section 194J but isdeducted under section 194C, therequirements of section 40(a)(ia) arenot satisfied.

Decision at [2015] 60 taxmann.com6 9 ( K e r a l a ) i n c a s e o fCommissioner of Income-tax-1,Kochi v. P V S Memorial HospitalLtd takes a non-charitable view

A deduction under thewrong provision of law will not savethe assessee from disallowance u/s40(a)(ia).

I. TIME LIMIT FOR FILING APPEALS

II. REFUND

1.1 In case of delay of 182 days in filingwrit appeal before the High Court,which dismissed the writ on accountof the delay, the Honourable SupremeCourt observed that the High Courtshould have condoned the delay sincean important question of law on levyof service tax was involved.[UoI vs Perayam Subhash – SC]

1.2 In computing time limit to file anappeal, the date on which order isserved on the assessee has to beexcluded.[Rotomac Global Pvt Ltd vs CCE,Kanpur – H.C. Allahabad]

2.1 Refund of unutilized cenvat credit ofservice tax against export of servicescannot be denied only for the reasonthat the premises, from where theservices had been exported, had notbeen registered under the provisions;the premises had been registeredsubsequent to the cenvat credit beingaccumulated.[Embitel Technologies (India) Pvt Ltd

vs CST, Bangalore – Cestat – Bang]

2.2 Provisions of unjust enrichment notapplicable to refund of service tax paidon export of services.[CST, Mumbai vs Pulcra Chemicals(India) Pvt Ltd – Cestat – Mumbai]

2.3 Interest on delayed refunds would bepayable to assessee only on amountof duty and not on refund of fine andpenalty[CC(Ports), Kolkata vs CoronationSpinning India – SC]

2.4 When the respondents wereregistered for import of capital goodsunder project import and made a cashsecurity deposit at the time of theregistration of the project, the bar ofunjust enrichment was not applicableat the time of refund of such securitydeposit.[CC vs Pioneer Power Corporation Ltd– Cestat Chennai]

The ser vice recipient is notresponsible for examining thecorrectness of the service tax paid toservice provider; the recipient ofservices can claim cenvat credit ofservice tax charged by the serviceprovider and paid to the serviceprovider by the recipient and therevenue authorities cannot disputeapplicability of service tax at thereceiver’s end.[India Vision Satellite Commu-nications Ltd vs CCE&ST, Cochin –Cestat – Bang]

Extended period cannot be invokedwhen all facts came to knowledge ofrevenue authorities and SCN issued22 months thereafter, particularlywhen the SCN did not specifyde l ibera te act amount ing tosuppression with intention to evadepayment of duty.[CCE&ST vs Triveni Engineering &Industries Ltd – H.C. Allahabad]

5.1 While arriving at the assessable value

for the retail sale price u/s 4A of the

CEA,1944, an amount of abatement

III. CENVAT CREDIT

IV. EXTENDED PERIOD

V. VALUATION

specified by notification can only be

deducted - there is no provision under

the law to exclude warranty charges

from the RSP - statutory provision

under Section 4A cannot be altered or

influenced merely because the

appellant has chosen to discharge

service tax on the warranty portion of

the retail sale price.[Videocon Industries Ltd vs CCE –

Cestat Mumbai]

5.2 Transfer of the right to procure duty

free impor ted raw material is

additional consideration to be

included in the value of the goods.[CCE vs Indorama Synthetics (India)

Ltd – S.C.]

No Service tax can be levied on

indivisible Works Contracts prior to

June 1, 2007[CCE & Customs, Kerala & Others vs

Larsen & Toubro Ltd & Others – SC]

VI. WORKS CONTRACT

3-DWritten by CA. Abhay Desai

PROVISIONAL ATTACHMENT UNDER THEGVAT/CST ACT

Lao Tzu said “The key to growth is theintroduction of higher dimensions ofconsciousness into our awareness”.Thinking about an issue only from one-dimension may result in faulty action. This isalso true for indirect taxes. One has to thinkfrom all points of view to get the bestanswer. This column attempts to discussvarious issues pertaining to indirect taxesfrom all the three dimensions i.e. CentralExcise, Service Tax & VAT.

PROVISIONAL ATTACHMENT – LEGALPROVISIONS

1. Sec. 45 of Gujarat Value Added TaxAct (GVAT Act) deals with provisionalattachment. As per the said section, ifdur ing the pendency of anyproceedings of assessment orreassessment of turnover escapingassessment, if Commissioner is of theopinion that for the purpose ofprotecting the interest of revenue it isnecessary to attach the property of a

Baroda Branch of WIRC of ICAI

In prosperity, our friends know us. In adversity, we know our friends 4

dealer, he may by order in writingattach provisionally any propertybelonging to the dealer. Property canbe provisionally attached for amaximum period of one year. Rule 41of Gujarat Value Added Tax Rules,2005 (GVAT Rules) provides thatCommissioner has to pass an ordermentioning the details of property thatis attached. If the property attached isof immovable nature, he shall sendintimation to the land revenueauthority to endorse a charge on saidproperty. If the property is of aperishable nature, provisionallya t t a ched p rope r t y sha l l b eimmediately released on payment ofthe market price of said property. If thedealer fails to pay the same,Commissioner shall dispose of suchproperty and adjust the amountrealized against the tax liability. Thusonly condition required to be satisfiedbefore making provisional attachmentis formation of an opinion that in orderto protect the interest of revenue,attachment is needed. Let us now lookat judicial pronouncements on thesame.

2. Hon. Andhra Pradesh High Court incase of B.J. Services CompanyMiddle East Ltd. V. Commercial TaxOfficer, Kakinada and others [2007]10 VST 597 (AP) had an occasion tointerpret the provisions contained inAndhra Pradesh Value Added Tax Act,2005 with respect to provisionalattachment. In this case, departmentmade provisional attachment on thelikelihood of raising heavy demandswhen assessment was made. Hon.High Court held that it is abundantlyclear from bare perusal of theprovision that an order of attachmentcan be made where the prescribedauthority frames an opinion that suchorder is necessary to be passed for

PRINCIPLE:

LIKELIHOOD OF RAISING HEAVYD E M A N D N O T A G R O U N D F O RPROVISIONAL ATTACHMENT

Formation of an opinionthat to protect the interest of revenueprovisional attachment is done ismust.

the purpose of protecting the interestof the Revenue. Likelihood of raisingheavy demand cannot be the groundfor making provisional attachment.

3. In case of Carlton Industrial Engineersv. Commercial Tax Officer, Kakinadaand another [2007] 9 VST 77 (AP),Hon. High Court held that provisionalattachment can be made only duringpendency of any assessment orreassessment proceedings. It cannotbe made when order has already beenpassed. Even u/s 45(1) of GVAT Act,provisional attachment can be doneonly when proceedings are pending.

4. In case of Pratik Manhendra Gandhi v.State of Gujarat and Another [2013]63 VST 178 (Guj), Hon. Gujarat HighCour t he ld tha t p rov i s iona lassessment under section 45 of theAct, is a drastic measure. In this caseprovisional attachment of the bankaccount as well as stock of the dealerwas made by the department on theapprehension that the dealer hadpurchased goods from supplierswhich regis t ra t ion has beencancelled. It was submitted on behalfof petitioners that the purchases weremade before the date on which orderof cancellation was made. It wassubmitted that there was nodiscrepancy in the physical and bookstock when department visited thepremises of the dealer. Hon. HighCour t considered the abovesubmissions and opined that makingfull attachment of the stock willhamper the business of the dealer.Thus it devised a workable formulawherein dealer was required tomaintain a minimum level of stock andprovisional attachment was ordered

PRINCIPLE:

NO PROVISIONAL ATTACHMENT IF NOPROCEEDINGS ARE PENDING

PRINCIPLE:

FACTORS TO BE CONSIDERED BEFOREMAKING PROVISIONAL ATTACHMENT

Likelihood of raisingheavy demand cannot be a ground formaking provisional attachment

Provisional attachmentcannot be made if no proceedings arepending.

to be lifted so that dealer can continuethe business. Ratio of the saiddecision is that interest of trade andbusiness, prima facie merits of thecase as well as interest of revenuemust all be considered before makinga provisional attachment.

5. Hon. Gujarat High Court in case ofViramgam-Mahesana Project Ltd. andAnother v. State of Gujarat and Others[2012] 55 VST 149 (Guj) has held thatattachment of bank account cannotcontinue beyond a period of one yearu/s 45 of the GVAT Act.

6. Hon. West Bengal Tribunal in case ofVikash Iron & Steel Pvt. Ltd. V. CTO(2009) 19 VST 224 (Trib)(WB) hasheld that what is permitted under thelaw is attachment wherein the ownercannot transfer or create a charge inany which way. However it does notpermit sealing the business place. Inthis case, Tribunal even awardeddamages which were payable by thedepartment for illegal sealing ofbusiness premises.

7. Hon. Andhra Pradesh High Court incase of D. Pitchaiah v. AssistantCommercial Tax Officer [1987] 66STC 283 (AP) held that the assessingauthority had no jurisdiction to restraina third party from making payments tothe dealer, before making a provisionalassessment, in order to recover thetax. In this case assessing authority

PRINCIPLE:

T I M E L I M I T O F P R O V I S I O N A LATTACHMENT

PRINCIPLE:

ONLY ATTACHMENT IS PERMITTED,SEALING IS NOT

PRINCIPLE:

THIRD PARTY CANNOT BE RESTRAINEDFROM MAKING THE PAYMENT

Interest of trade, value ofimmovable property offered assecurity, merits of the case as well asinterest of revenue must be balancedb e f o r e m a k i n g p r o v i s i o n a lattachment.

Attachment can continueonly for a maximum period of one year

Sealing of businesspremises is not permitted u/s 45 ofthe GVAT Act.

Baroda Branch of WIRC of ICAI

Beliefs are the eyelids of the mind5

issued a notice to the third partyrestraining them from paying theamount of Rs. 8 lakhs to the petitioner.Neither provisional assessment norregular assessment was made in thiscase.

8. Similarly same court in the case of K.Digamber v. Commercial Tax Officer(2000) 118 STC 104 (AP) held thatwhere an assessment of a dealer is yetto be finalized it is not open to theauthorities to issue a notice inanticipation to the bankers not topermit the dealer to operate hisaccounts

9. Hon. Bombay High Court in case ofPremium Paper and Board IndustriesLtd. v. Joint Commissioner of SalesTax [2012] 51 VST 382 (Bom) hasheld that an order of provisionalattachment cannot be passed afterfurnishing an opportunity of beingheard as monies sought to beattached may be spirited away,however sub-section (5) of section 35empowers the person or dealer tomake an app l ica t ion to theCommissioner within fifteen days ofthe service of the order under sub-section (1) and upon such applicationbeing made, the Commissioner isrequired to afford a reasonableopportunity of being heard andthereafter to proceed to confirm,modify or cancel the order. Under sub-section (6) a substantive appeal isprovided to the Tribunal against anorder passed under sub-section (5).Hence it was held that sufficientsafeguards are provided in the law.

10. However under Sec. 45 of GVAT Act,no such safeguard as contained underthe Bombay Sales Tax Act has beenprovided. But as per Sec. 73(1) anappeal from every original order, notbeing an order mentioned in section74, passed under this Act or the rulescan be made. Provisional attachment

PRINCIPLE:

REMEDY AGAINST PROVISIONALATTACHMENT

Third party cannot berestrained from making the paymentto the dealer.

order being an original order, appealcan be filed against the same.

11. On the issues of detention of the dealerto recover the dues as arrears of landrevenue, Hon. Delhi High Court incase of Harmeet Singh Ghai v. AnandS. Khullar, Deputy Commissioner(Recovery), Sales Tax and Others(and other cases) has laid down a verysound principle that detention isjustifiable only when it can beestablished that the detainee has themeans but is willfully withholding thepayment of dues and detention willthus force him to pay the dues. Incircumstances where the dealergenuinely has no means to pay thedues, detention is not warranted. Ithas held that from the scheme of theDelhi Land Reforms Act, 1954, andthe Rules made thereunder and inparticular rule 119 of the LandReforms Rules, it is clear that thougharrest and detention of a defaulter isone of the modes of recovery of anarrear of land revenue, a warrant ofarrest under section 138 of the DelhiLand Reforms Act cannot be madeand issued casually or on a merereceipt of the recovery certificate.Rule 119(2) of the Land ReformsRules requires production of thedefaulter, who is arrested, before theofficer who issued the warrant withoutdelay and mandates that suchdefaulter shall not be detained incustody unless there is reason tobelieve that the process of detentionwill compel the payment of the wholeor a substantial portion of the arrears.The said sub-rule, thus, necessitatesan inquiry into the question or aconscious attempt to ascertain if thedetention of the defaulter would beproductive of payment of arrears or asubstantial portion thereof. Thoughthere is nothing in section 138 of theDelhi Land Reforms Act or rule 119 ofthe Land Reforms Rules requiring thedetaining authority to give an

PRINCIPLE:

DETENTION OF DEALER

Appeal can be filedagainst the order of provisionalattachment.

opportunity to the defaulter of beingheard, he has to consider if anyevidence is tendered or submissionsare made by the defaulter in this behalfand then find out if there is anyjustification for detaining the defaulter.It is only after he records hissatisfaction that the detention of thedefaulter will compel him to make thepayment of the whole or a substantialpart of the arrears that he can directthe detention of the defaulter. Thedetaining authority has to consider thematter from this angle and satisfy himthat the defaulter has the means but iswillfully withholding payment or isfraudulently evading payment. If he isnot so satisfied, the officer is under anobligation to release the defaulter. Thisis the condition precedent for orderingdetention of the defaulter. SimilarlyHon. Madras High Court in case of G.Gopalakrishan and Another v. DeputyCommissioner of Commercial Taxes,Salem and Others [1988] 70 STC 293(Mad) has held that an order of arrestand imprisonment of the defaultercannot be made unless the arrearsdue from the defaulter cannot beliquidated by sale of the property ofthe defaulter or of his surety, andunless the Collector has reason tobelieve that the defaulter or his suretyis willfully withholding payment of thearrears or has been guilty of fraudulentconduct in order to evade payment.

PRINCIPLE: A detention of adefaulting dealer can be done only if itcan be established that the detaineehas the means but is willfullywithholding the payment of dues anddetention will thus force him to paythe dues.

Indirect Tax UpdatesWritten by CA. Manilal Parsiya

Notification No. 18/2015-Central Excisedated 06.07.2015 (N.T.)

in pursuance of Rule 10(5) and Rule 11(9)of the Central Excise Rules, 2002 and Rule5(5) and Rule 4C(2) of the Service TaxRules, 1994, the CBEC specified conditions,safeguards and procedures for issue of

Baroda Branch of WIRC of ICAI

Never fear to dream. Dreams are sacred visions of realities 6

invoices, preserving records in electronicform and authentication of records andinvoices by digital signatures, namely:-

1. Use of digital signature of Class 2 orClass 3 Digital Signature Certificate.

2. Intimation to the jurisdictional DC orAC, at least fifteen days in advance: a)name, e-mail id, office address anddesignation of the person authorisedto use the digital signature certificate;b) name of the Certifying Authority;c) date of issue of digital certificateand validity of the digital signaturewith a copy of the certificate, thecomplete address of the saidAuthority. Any change in the detailssubmitted, complete details shall besubmitted afresh within fifteen days ofsuch change.

3. Every assessee already using digitalsignature shall intimate to thejurisdictional DC or AC the abovedetails within fifteen days of issue ofthis notification.

4. Every assessee who opts to maintainrecords in electronic form and whohas more than one factory or servicetax registration shall maintainseparate electronic records for eachfactor y or each ser v ice taxregistration.

5. Every assessee who opts to maintainrecords in electronic form, shall onrequest by a Central Excise Officer,produce the specified records inelectronic form and invoices throughe-mail or on a specified storage devicein an electronically readable format forverification of the authenticity of thedocument and the request for suchrecords and invoices shall bespecified in the letter or e-mail by theCentral Excise Officer.

6. A Central Excise Officer, during anenquiry, investigation or audit, maydirect an assessee to furnish printoutsof the records in electronic form andinvoices and may resume printouts ofsuch records and invoices afterverifying the correctness of the samein electronic format; and after the printouts of such records in electronicform have been signed by the

assessee or any other personauthorised by the assessee in thisregard, if so requested by suchOfficer.

7. Appropriate backup of records inelectronic form is maintained andpreserved for a period of 5 yearsimmediately after the financial year towhich such records pertain.

8. This notification shall come into forceon the date of its publication in theOfficial Gazette.

Waiver of issuance of SCN: On assesses’request for an informed waiver of a writtenSCN. In a case involving the extended periodof limitation, if an assessee pays thetax/duty amount, interest and penalty equalto 15% of the tax/duty and makes a requestin writing for non-issuance of written SCN,then in such cases the SCN can be oral andthe representation (if he desires) against italso be oral.

If the grounds on which the Departmentfeels that there has been short/non-payment of tax/duty are intimated to theassessee orally with its quantification andthe assessee indicates in writing that he hasbeen informed about such grounds and heaccepts the grounds and the quantificationand is waiving the requirement of a writtenSCN, then a written SCN need not be issued.

In terms of Section 78 of the Finance Actand Section 11AC of the Excise Act, 30 daysperiod within which the assessee may makethe payment of tax/duty, interest andreduced penalty of 15%, is computed fromthe date of service of SCN. In case theassessee makes a written request for waiverof a written SCN, the 30 days period can becomputed from the date of receipt of such aletter by the Department.

There is no bar on an assessee making thepayment of tax/duty, interest and reducedpenalty of 15% even before the date ofreceipt of such a letter by the Department.

An officer equal in rank to the officer who iscompetent to adjudicate such cases shallapprove the conclusion of the proceeding.

Instruction F. No. 137/46/2015-ST dated18.08.2015 has issued clarification asunder

Conclusion of Proceedings

The of f icers of DGCEI /Execut iveCommissionerate/Audit Commissioneratecan close the case. The sum total involved inall the issues arising from the sameproceedings should be considered forconclusion of proceedings, in case ofmultiple issues with different monetaryvalues arising from the same proceeding.The intimation for such conclusion shall begiven in writing to the assessee.

Provisions under Section 73(3) of theFinance Act and Section 76(i) thereof haveto be read harmoniously to conclude that innon-fraud cases, if the assessee pays thetax along with interest, either within 30 daysof issuance of SCN or before issuance ofSCN, then in such cases proceedings shallbe deemed to be concluded. Legalprovisions for similar closure under theCentral Excise are present in clause (a) ofsub-section (1) of Section 11AC of theExcise Act.

FAQs on Ind AS 33:Earnings Per Share

Written by CA. Prashant Upadhyay

1) Whether Earnings Per Share(EPS) isrequired to be disclosed inConsolidated Financial Statementsas well as Separate FinancialStatements?

2) What are major terms used in thestandard?

Yes. When an entity presents bothconsolidated financial statements &separate f inancial statementsprepared in accordance with Ind AS110, Conso l ida ted F inanc ia lStatements, and Ind AS 27, SeparateFinancial Statements, respectively,the disclosures required by thisStandard shall be presented both inthe consolidated financial statementsand separate financial statements.

Anti-dilution as against dilution is anincrease in EPS or reduction in lossper share resulting from assumptionthat conver tible instruments areconverted that options or warrants areexercised or ordinary shares areissued on satisfaction of specifiedconditions.

Contingent share agreement is an

Baroda Branch of WIRC of ICAI

Life without any wonder left in it is flat and stale7

agreement to issue of shares(Contingently issuable ordinaryshares) that is dependent onsatisfaction of specified conditions.

Option, warrants and their equivalentsare financial instruments that give theholder the right to purchase ordinaryshares (potential ordinary shares).

Put options on ordinary shares arecontracts that give the holder the rightto sell ordinary shares at a specifiedprice for a given period.

The amount in respect of such itemswhich should be recognized in Profit &Loss statement shall be reduced orincreased as the case may be fromProfit or loss from continuingoperations for the purpose ofcalculating EPS.

Followings are different situations andrelevant dates for considerationreceivable:

a) For issue of shares at cash, whencash is receivable.

b) Fo r i s s u e o n v o l u n t a r yreinvestment of dividends onordinary / preference shares,when dividends are reinvested.

c) F o r i s s u e a g a i n s t d e b tinstruments, from date wheninterest ceases to accrue.

d) For issue against interest or

3) An entity had incurred an expense &earned an income which should berecognised in Profit & Lossstatement in terms of IndianAccounting Standard. However, theentity recognized the said item insecurity premium account or anyother reserves forming part ofreserves & surplus. Whether theitem should be adjusted in earningfor the period for the purpose ofcalculation of EPS?

4) Para 21 of the standard stipulatesthat weighted average number ofshares should be calculated bytaking date of considerationreceivable for issue of shares. Whatis the relevant point of time underdifferent scenario when shares areissued?

principal on other financialinstruments, date that interestceases to accrue.

e) For issue against settlement ofliability, the date of settlement.

f) For acquisition of asset (otherthan cash), date on whichacquisition is recognised.

g) For issue against renderingservices, date when services arerendered (irrespective of date ofb i l l i ng o r recogn i t i on inaccounts).

h) Para 22: For considerationagainst business combination,date of acquisition as the acquirerincorporates into its statement ofprofit or loss the acquiree’s profitand losses from that date.

i) Para 23: For shares to be issuedmandatorily on conver tibleinstrument should be included incalculation since the contract isentered into.

j) Para 24: Contingently issuableshares are to be incorporated incalculation only from the datewhen all necessary conditionsare satisfied (ie. The events haveoccurred). Due to involvement ofdefinite period of time, thetreatment is given accordingly.Contingently returnable (subjectto recall) are not treated asoutstanding and are excludedform calculation until date theshares are no longer subject torecall.

Diluted EPS shall be calculated byadjusting profit or loss attributable toordinary equity holders of the entityand the weighted average number ofordinary shares outstanding for theeffects of all dilutive potential ordinaryshares.

The profit or loss attributable toordinary equity holders of entity isadjusted for after tax effects of:

a) Any dividend or other itemsrelated to dilutive potential

5) What are considerations fordetermining diluted EPS?

ordinary shares deducted inar r iving at profi t or lossattributable to equity holders

b) Any interest recognized in theperiod related to dilutive potentialordinary shares

c) Any other changes in income orexpense that would result fromconversion of the dilutivepotential ordinary shares

d) The number of ordinary sharesoutstanding plus the weightedaverage number of ordinaryshares that would be issued onthe conversion of all dilutivepotential ordinary shares intoordinary shares.

In cases where number of sharesoutstanding is affected as a result ofcapitalisation, bonus issue, share splitor a reverse share split, the calculationof basic EPS and diluted EPS shouldbe adjusted retrospectively. In casesof bonus issue, it should be alwayspresumed that the bonus shares wereissued on the very beginning of thefinancial year, even though issued atany point of time in the financial year.

In terms of Para 66, statement of profitor loss should incorporate basic anddi luted EPS from cont inuingoperations attributable to parent entityfor the period of each class of holdersof equity shares that has different rightto share in profit for the period. Entityshall present basic and diluted EPSwith equal prominence for all periodspresented.

In terms of Para 70, an entity shalldisclose:

a) Amounts used as numerator inc a l c u l a t i n g E P S a n dreconciliation of amounts of profitor loss. Reconciliation shallincorporate individual effect ofeach class of instruments thataffects EPS.

b) Weighted Average Number of

6) In which situations the EPS shouldbe restated?

7) What are presentation & disclosurerequirements of the standard?

Baroda Branch of WIRC of ICAI

Impression, not oppression determines the real life of a real person 8

Shares used as denominator &r e c o n c i l i a t i o n o f t h e s edenominators to each other.Reconciliation shall incorporateindividual effect of each class ofinstruments that affects EPS.

c) I n s t r u m e n t s ( i n c l u d i n gcontingently issuable shares) thatcould potentially dilute EPS infuture, but were not included incalculation of EPS because theyare anti-dilutive for the periodspresented.

d) A description of ordinary sharetransactions or potential ordinaryshare transactions, other thanthose accounted for underretrospective adjustments, thatoccur after the reporting periodand that would have changedordinary shares outstanding atthe end of the period if thosetransactions had occurred beforethe end of the reporting period.

Sr. Ind AS 33 AS 20

8) What are major deviations of AS 33from AS 20:

1) R e q u i r e spresentation ofE P S f r o mc o n t i n u i n g &d i s c o n t i n u e do p e r a t i o n sseparately.

2) D e a l s w i t hoptions held bythe entity on itss h a r e s e g .P u r c h a s e soptions, writtenput options etc.

3) Not dealt withsince Ind AS 1presentation off i n a n c i a ls t a t e m e n t ss p e c i f i c a l l ystates that noi n c o m e o rexpense can berecognized andp resen t ed asext ra-ord inar yitem.

Does not requiresuch presentation.

Not dealt with by theexisting standard.

Requires disclosureof EPS with andw i t h o u textraordinary items.

ICAI CORNERComplied by : CA Pradeep K Agrawal &

CA Rahul H Parikh, BarodaSource: www.icai.org

A-Brief of few announcements by ICAI from1-Aug-15 to 31-Aug-15:

1 Clarifications on some commonlyasked queries pertaining to electedrepresentatives of ICAI and thegeneral members of ICAI - (29-08-2015)

The Council at its 345th Meeting held on14th-16th August, 2015, whileconsidering recommendations ofEthical Standards Board on the belowmentioned issues, decided as under :-

• It is permissible for the electedrepresentatives of the ICAI to replyto the general queries of memberson email , mentioning theirrespective designation(s) held inICAI at present and/or in past alongwith their photograph as signatureof the email. Likewise, it is alsopermissible for the generalmembers to reply to the members’queries on email, along with theirphotograph as signature of theemail.

• It is permissible for electedrepresentatives of the ICAI, as wellas for the general members of theICAI to put their photograph on anyelectronic media to enable theireasy identification. However, thereis no change with regard to theexisting restriction on printing ofphotographs on official stationerylike visiting cards, letterheads etc.

• It is permissible for the electedrepresentatives of the ICAI to eithermention their designation(s) inICA I , as s ta ted above oralternatively to use their firmname/professional designation incommunications sent on emails.However, the simultaneous use ormention of designation(s) ofelected representative of ICAI andof the firm name /professionaldesignation, is not permissible.Further, in case of mass emailssent either by the electedrepresentatives of ICAI or the

general members of ICAI, whileusing the firm name, the expression“chartered accountants” is notpermissible.

• The elected representatives of theICAI may share decisions (withmembers/students) taken by theC o u n c i l . H o w e v e r, m e r ediscussions, recorded in anymode, e.g. verbatim or audio tapesetc., should not be shared. It wouldbe the responsibility of therepresentative sharing the decisionto ensure the completeness andcorrectness of the decision soshared.

• It is permissible for the electedrepresentatives of the ICAI as wellas for general members to sharethe Institute’s events/Pictures/CALogo and banners through SMS/emails /Websites, including thesocial networking sites, withm e m b e r s / s t u d e n t s / n o n -members/public. However, thestand alone use of image of the ICAIEmblem is not permissible, exceptwhere it incidentally forms part ofthe background while appearing ona picture/banner etc.

• The permission granted under para1 to the elected representatives ofICAI regarding use of thephotograph and mention of the past/present designation(s) held in ICAIas well as the permission to generalmembers regarding use ofphotographs , shall extend to theeventualities mentioned in para 5also.

For the purposes of thisAnnouncement, the electedrepresentative(s) of ICAI shallmean and include the electedmembers of the Central Council,elected members of the RegionalCouncils and of the ManagingCommittees of Branches ofRegional Council. The abovedecisions shall come into forcewith immediate effect.

(For details: http://www.icai.org/new_post.html?post_id=11862&c_id=219)

Note:

Baroda Branch of WIRC of ICAI

9 If anyone doesn't agree with you, the truth is on your side

2- Revised announcement-Mechanismto Monitor Tendering: (24-08-2015) :

3 A Report on Audit Quality ReviewFindings (2012-15) - (18-08-2015):

The Council at its 345th meeting heldfrom 14th to 16th August, 2015considered the concerns raised bymembers on the decision of the Councilwith regard to mechanism to monitortendering hosted on the website of theInstitute on 22nd July, 2015. After dueconsideration of the same, the Councilat its aforementioned meeting hasreferred this matter to the group alreadyconstituted under the convenorship ofCA. Tarun Jamnadas Ghia, Member,Central Council for the examination ofthe concerns so raised and the date ofapplicability of the said announcement.The revised announcement along withits applicability date will be announcedseparately. (Secretary, ICAI)

(For details: http://resource.cdn.icai.org/38929pdcrevisedann240158.pdf)

Government of India has, in exercise ofthe powers conferred under Section28A of the Chartered Accountants Act,1949, constituted a Quality ReviewBoard (the ‘Board’) to perform thefollowing functions u/s 28B of theChartered Accountants Act, 1949:-

a) to make recommendations to theCouncil with regard to the quality ofservices provided by the membersof the Institute;

b) to review the quality of servicesprovided by the members of theInstitute including audit services;and

c) to guide the members of theInstitute to improve the quality ofservices and adherence to thevarious statutory and otherregulatory requirements.

The Board has brought out ‘AReport on Audit Quality ReviewFindings (2012-15)’ providingana lys is and summar y ofobser vat ions made by theTechnical Reviewers in reviewrepor ts completed during thefinancial years 2012-15. The reportis accessible at the weblinkh t t p : / / w w w. q r b c a . i n / w p -

content/uploads/2015/07/qrb28179.pdf. It is hoped the variousstakeholders will find it useful and itwould go a long way in improvingthe overall quality of auditing.

(For details http://www.icai.org/new_post.html?post_id=11828&c_id=219)

In view of the low number of candidatesapplying for appearing in the SpecialExamination for members of the foreignaccounting bodies/Institutes withwhom ICAI had en te red in toMRA/MOUs, it has been decided by theExamination Committee that the saidSpecial Examination, will henceforth beheld once a year in the month of Juneonly, as against the current practice ofholding them, twice a year in themonth/s of June and January.

Accord ing ly, the next Specia lExamination for members of foreignaccounting bodies/ Institutes withwhom ICAI had en te red in toMRA/MOUs, will be held in June 2016.Candidates are requested to take note oft he abovemen t i oned change -Examination Department

(For details: http://resource.cdn.icai.org/38932examannoumra250815.pdf)

Applications are invited from eligiblemembers of the Institute and otherprofessionals including academiciansof reputed educational institutions, taxand legal practitioners etc., having a flairfor academic activities includingvaluation of answer books and willing toundertake confidential assignments asa dedicated examiner;

The eligibility criteria for empanelment

4 Holding of Special Examination formembers of foreign accountingbodies/ Institutes with whom theInstitute of Chartered Accountants ofIndia (ICAI) had entered into MutualR e c o g n i t i o n A g r e e m e n t s( M R A s ) / M e m o r a n d u m o fU n d e r s t a n d i n g ( M O U s ) t o b econducted once a year in the month ofJune only-: (24-08-2015)

B-Opportunities for Members to contributeto our own ICAI :

1 Invitation for empanelment asExaminers for Chartered AccountantsExaminations - (19-08-2015)

as examiner are as follows:

• Chartered Accountants with aminimum of four years standing inpractice or in service are eligible toapply.

• University Lecturers/Professorswith a minimum of five yearsteaching experience are eligible toapply.

• Lawyers, IT Professionals, MBA(Finance) and other professionalswith at least five years’ experience,either in academic position or inpractice or in employment areeligible to apply. Those with workexperience having direct relevanceto the aforesaid subjects(s) ofexamination(s) will be preferred.

• Persons above 60 years of age arenot eligible for empanelment asexaminer.

• Persons who are visually impairedor suffer from such other physicallydisability that might necessitatetaking the assistance of any otherperson for evaluation of answerbooks are not eligible to apply.

• Persons who are undergoing anycourse of the Institute are noteligible to seek empanelment asexaminers.

• Those whose applications wererejected earlier or rested/removedfrom the panel are not eligible toapply again.

Intermediate(IPC) 1-6 Rs 85/-per paper

Intermediate(IPC) 7A/7BSectionalpaperscarrying50 markseach

Final examination 1-8 Rs 110/-per paper

Examination Paper Rate

Rs 55/-per paper

Scale of honorarium for evaluation of answer books

Format of the application for empanelment canbe downloaded from www.icai.org . Duly filled inapplication forms with all required enclosuresmay be sent by speed post or registered post tothe following address: The Deputy Secretary(Exams), ICAI Bhawan, Indraprastha Marg, NewDelhi 110 002

Baroda Branch of WIRC of ICAI

If your love for another person doesn’t include loving yourself then your love is incomplete 10

Important Due Dates for September, 2015 Complied by CA. Abhijit J. Kotecha

DATES COMPLIANCE PERIOD

05-Sep-15 Payment of Service Tax - Monthly Cases / Excise Duty (for SSI & Non - SSI) Aug.' 15

06-Sep-15 E-Payment of Service Tax - Monthly Cases / Excise Duty (for SSI & Non - SSI) Aug.' 15

07-Sep-15 TDS payment / E-payment Aug.' 15

Income Tax Return / E-return (excluding Statutory Audit / Tax Audit Cases and the Working partners of thePartnership firm / LLP) - Extended Date

08-Sep-15 VAT / CST E-Return - Monthly - with April to June Stock Statement (For VAT or CST > Rs. 5,000/-) June' 15

10-Sep-15 Excise Returns - ( Monthly Return by Large Units / Return by EOU / Monthly return of receipt & consumption ofeach of Principal Inputs, assessees required to submit ER-5 return)"

13-Sep-15 VAT / CST E-return - Quarterly cases (including Lumpsum Tax payers) Q1 (Fin. Yr.: 2015-16)

15-Sep-15 Advance Income Tax payment / E-payment - All Assessees Asst. Yr.: 2016-17

Return of Professional Tax and PF (for employees joining & leaving service) Aug.' 15

Payment of Professional Tax / PF / ESIC (employees) Aug.' 15

21-Sep-15 ESIC Payment & Return Aug.' 15

22-Sep-15 VAT / CST - payment / E-payment- Monthly Cases Aug.'15

25-Sep-15 PF Return Aug.' 15

29-Sep-15 "VAT / CST - E-Return - Monthly (For VAT or CST

PHOTOFLASH

Baroda Branch of WIRC of ICAI

11 What you spend years building may be destroyed overnight. Build anyway

ICAI International Tax Convention (2 days)

CA. Hitesh Gajaria

CA. Prashant Kotecha

CA. Sushil Lakhani

CA. Milin Mehta

CA. Rohan Phatarphekar

CA. Nilesh Mody

CA. Sanjay Tolia

CA. Nilesh Patel

CA. Shefali Goradia

Orientation Programme for Newly Qualified Chartered Accountants on 5th August, 2015

CA. Ankur Maheshwari

Study circle meeting on Preparationand appearing before the first

Appellate Authority on 18 8 2015

Mr. Jitesh Poptani

CA. Kartik PandyaCA. Manish Baxi CA. Bharat Kanani CA. Rahul Mathur

Baroda Branch of WIRC of ICAI

DISCLAIMER : The ICAI and the Baroda Branch of WIRC of ICAI is not in any way responsible for the result of any action taken on the basis of the advertisement published in the Newsletter. The members,however, may bear in mind the provisions of the Code of Ethics while responding to the advertisements. The views and opinion expressed or implied in the Newsletter are those of the authors / contributors and donot necessarily reflect those of Baroda Branch. Unsolicited matters are sent at the owner's risk and the publisher accepts no liability for loss or damage. Material in this publication may not be reproduced, whetherin part or in whole, without the consent of Baroda Branch. Members are requested to kindly send material of professional interest to The same may bepublished in the newsletter subject to availability of space & editorial editing.

baroda@icai.org/caagrawalhitesh@gmail.com

If undelivered, please return to :

Baroda Branch of WIRC ofThe Institute of Chartered Accountants of India

www.baroda-icai.org WIRC : www.wirc-icai.org ICAI: www.icai.orgl l

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ADVERTISEMENT TARIFF : * Discount - 3 to 6 issue of 10%, 7 to 12 issue 15% * Circulated to more than 1800 Chartered Accountants

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The tariff for advertising given below are duly approved by the Managing Committee of the Baroda Branch. Advertisements are received directly by the Branch and no advertising agency hasbeen appointed for this purpose.

This Newsletter is circulated without any charges to its members and other important categories of recipients as per ICAI Advisory on Newsletters. Subscription rate is Rs. 20/- per issuefor others.

CA. Yash N Bhatt on behalf of Baroda Branch of WIRC of ICAI. “ICAI Bhawan”, Kalali-Tandalja Road, Atladra, Vadodara - 390 012

Multiprints, 30/B, Gandhi Oil Mill Compound, Near BIDC, Gorwa, Vadodara - 390016. Ph.: 0265-2285592

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12The good you do today will be forgotten tomorrow. Do good anyway

Flag Hoisting on 69th Independence Day of India

C O N G R A T U L A T I O N

Congratulations

for being appointed as Co-Opted member of

"Swachha Bharat Abhiyan"

committee of WIRC.

CA. Atul Parikh