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Showing posts from May, 2014


Union Cabinet nods to constitution of SIT on black monies stashed abroadMay 28, 2014CONSTITUTION OF SPECIAL INVESTIGATING TEAM (SIT) TO IMPLEMENT DECISION OF SUPREME COURT ON LARGE AMOUNTS OF MONEY STASHED ABROADPRESS RELEASE, DATED 27-5-2014The Union Cabinet today approved constitution of Special Investigating Team (SIT) to implement the decision of the Hon'ble Supreme Court on large amounts of money stashed abroad by evading taxes or generated through unlawful activities.The SIT will be headed by Hon'ble Mr. Justice M.B. Shah, former Judge of the Supreme Court as Chairman and Hon'ble Mr. Justice Arijit Pasayat, former Judge as Vice Chairman.The Members of the High Level Committee will comprise:i.Secretary, Department of Revenueii.Deputy Governor, Reserve Bank of India,iii.Director (IB),iv.Director, Enforcementv.Director, CBIvi.Chairman, CBDT,vii.Director General, Narcotics Control Bureauviii.Director General, Revenue Intelligenceix.Director, Finan…

Revised TDS returns to be accepted without Original Provisional receipts

Revised TDS returns to be accepted without Original Provisional receipts wef 01.06.14 May 28
Circular No: NSDL/TIN/2014/024                                                                                               Subject: Revised procedure for acceptance of e-TDS/TCS correction statements and upload of scanned documents to TIN Central SystemAttention of all TIN Facilitation Centers (TIN-PCs) is invited to the procedure of acceptance of e-TDS/TCS correction statements and upload of scanned images as provided in chapter 6 and 7 of the TIN-PC Operating Manual (TOM).As per approval from Income Tax Department, the procedure for acceptance of e-TDS/TCS correction statement stands revised. The same is intimated vide this circular. The revised procedure applicable with effect From June 1, 2014 is as per table below:Sr. No. Documents to be accepted along with e- TDS/TCS correction statements – Existing procedure
1 Physical Form 27A Physical Form 27A
2 Statement Statistics Report (SSR)
3 …

Sharing of Asset Details from Wealth Tax Returns with PSBs - CBDT Instructions

Sharing of Asset Details from Wealth Tax Returns with PSBs - CBDT InstructionsIN a meeting on the performance of Public Sector Banks (PSBs) taken by Finance Minister on 5.3.2014, the PSBs raised concern that the details of assets as available in the Wealth Tax Returns of loan defaulters are not being shared by Income Tax Department with the Banks despite repeated requests. Section 42B of the Wealth Tax Act 1957 states: 42B Disclosure of information respecting assessees:- Where a person makes an application to the Chief Commissioner or Commissioner in the prescribed form for any information relating to any assessee in respect of any assessment made under this Act, the Chief Commissioner or Commissioner may, if he is satisfied that it is in the public interest so to do, furnish or cause to be furnished the information asked for in respect of that assessment only and his decision in this behalf shall be final and shall not be called in question in any court of law. CBDT obse…

Prior approval of RBI in cases of acquisition/ transfer of control of NBFCs.

RBI CIRCULAR Regarding Prior approval of RBI in cases of acquisition/ transfer of control of NBFCs. The prior written permission of the Reserve Bank of India shall be required for – (i) any takeover or acquisition of control of an NBFC, whether by acquisition of shares or otherwise; (ii) any merger/amalgamation of an NBFC with another entity or any merger/amalgamation of an entity with an NBFC that would give the acquirer / another entity control of the NBFC; (iii) any merger/amalgamation of an NBFC with another entity or any merger/amalgamation of an entity with an NBFC which would result in acquisition/transfer of shareholding in excess of 10 percent of the paid up capital of the NBFC. (iv) Prior written approval of the Reserve Bank would also be required before approaching the Court or Tribunal under Section 391-394 of the Companies Act, 1956 or Section 230-233 of Companies Act, 2013 seeking order for mergers or amalgamations with other companies or NBFCs.

CAS can't write accounts and then audit.

FYI - CAs cannot undertake assignment of audit & accounting work together for same entity
Announcement on prohibition to undertake the assignment of audit and accounting work together for the same entity. – (20-05-2014)
No. ICAI/ESB/2014/03
It has come to the knowledge of some members that certain entities , while inviting tenders for services of chartered accountants for the assignment of statutory audit , are mentioning accounting and book keeping related works in the scope of works required to done by the auditor.
Members are hereby advised not to undertake such assignment since it is violative of the provisions of ‘Code of Ethics’ and ‘Guidance Note on Independence of Auditors’ for auditor of an entity to do book keeping work of the entity. The said prohibition in the case of Companies is further also mentioned in Section 144 of the Companies Act, 2013.

PAN application revised

CBDT has revised PAN Application form 49A and 49AA wef from 16.05.2014 vide its notification no. 26/2014 , Dated- 16-5-2014. Revised Form 49A and 49AA provides option to get printed Mothers Name on PAN card.

Whistle Blowers Protection Act, 2011

Whistle Blowers Protection Act, 2011Whistle Blowers Protection Act, 2011 is an Act of the Parliament of India which provides a mechanism to investigate alleged corruption and misuse of power by public servants and also protect anyone who exposes alleged wrongdoing in government bodies, projects and offices. The wrongdoing might take the form of fraud, corruption or mismanagement. The Act will also ensure punishment for false or frivolous complaints.The Act was approved by the Cabinet of India as part of a drive to eliminate corruption in the country';s bureaucracy and passed by the Lok Sabha on 27 December 2011.The Bill was passed by Rajya Sabha on 21 February 2014 and received the President';s assent on 9 May 2014.The Act has not come into force till now.IntentAn Act to establish a mechanism to receive complaints relating to disclosure on any allegation of corruption or willful misuse of power or willful misuse of discretion against any public servant and to inqu…

HC on Restaurant Service- Validity & Double Taxation

High Court on Restaurant ServiceHC dismisses writ, upholds constitutional validity of Sec 66E(i) of Finance Act declaring service portion in activity of supply of food and drinks as "declared services"; Article 366(29-A) of Indian Constitution does not indicate subsuming of service part in sale of food, it rather separates sale of food and drinks from service; Sec 65B(44) and Sec 66E(i) only charge service tax on service part and not on sale part, which indicate exclusion of sale element from service as interpreted by SC in Associated-Hotel and Northern Caterers cases; Rejects assessee's reliance on SC ruling in K Damodarsamy, calling it irrelevant for determining Parliament's power to levy service tax on service element in sale; However, HC shows reservation in the rule quantifying fixed sum towards service and its functioning in restaurant, vis-a-vis tax under VAT Act; 40% over which service tax is charged cannot be subject to VAT; Absent provision in …

Case Law on Section 50B

S. 50B applies only to a "sale" for a "monetary consideration" and not to a case of "exchange" of the undertaking for shares under a s. 391/394 scheme of arrangementThe assessee transferred its Lift Division to Tiger Elevators Pvt. Ltd under a scheme of arrangement u/s 391 & 394 of the Companies Act, 1956. The transfer of the undertaking took place in exchange of preference shares and bonds issued by Tiger Elevators as per a valuation report. The assessee claimed that the transfer was not liable to tax on capital gains on the basis that there was no "cost of acquisition" of the undertaking. The AO held that the transaction was a "slump sale" as defined in s. 2(42C) and that the gains had to be computed u/s 50B. This was upheld by the CIT (A). On appeal by the assessee to the Tribunal, theTribunalaccepted the claim of the assessee. On appeal by the department to the High Court HELD dismissing the appeal:The definition of…


Date: May 16, 2014External Commercial Borrowings (ECB) from Foreign Equity Holder - Simplification of Procedure RBI/2013-14/594
A.P. (DIR Series) Circular No.130May 16, 2014ToAll Category – I Authorised Dealer Banks Madam/Sir,External Commercial Borrowings (ECB) from Foreign Equity Holder - Simplification of ProcedureAttention of Authorised Dealer Category – I (AD Category – I) banks is invited to the A.P. (DIR Series) Circular No. 05 dated August 01, 2005 as amended from time to time relating to the External Commercial Borrowings (ECB). Attention is also invited toA. P. (DIR Series) Circular No. 11 dated September 07, 2011A.P. (DIR Series) Circular No. 29 dated September 26, 2011, andA.P. (DIR Series) Circular No. 31 dated September 04, 2013.2. As per the extant ECB policy, ECBs from direct foreign equity holders (FEHs) are considered both under the automatic and the approval routes, as the case may be. ECBs from indirect equity holders and group companies and ECBs from direct FEH…

NSE-BSE Circuit Rules

NSE-BSE Circuit Rules & Election Counting Timings for 16th may.If 10% circuit till 1pm then mkt shuts for 45 minutes if 15% circuit till 1pm then mkt shuts for 15 minutes if 20% circuit anytime, mkt closed for the day if 10%circuit from 1-2.3 pm then mkt shuts for 15mins if 15% circuit from 1-2.30 pm then mkt shuts for 45mins if 20% circuit anytime, mkt closed for the day. post 2.30pm , if 10% circuit mkt will continue trading but if 15% post 2.30 pm then closed the day. ### election counting for general election 2014 due to start on 8.00 am on may 16 across 989 counting centres. Trends will be in by 11 am on Friday, final results on 4 pm

Bombay HC on CA 2013

Important Judgement of Hon'ble Bombay High Court with respect to Companies Act, 2013
The Hon''ble Bombay High Court has made several important and interesting observations with respect to the Companies Act, 2013, recently on 8th May 2014, in the matter of Godrej Industries Limited.
The issue for consideration before the court was whether in view of the provisions of Section 110 of the Companies Act, 2013 and SEBI Circular dated 21st May 2013, a resolution for approval of a Scheme of Amalgamation can be passed by a majority of the equity shareholders casting their votes by postal ballot, which includes voting by electronic means, in complete substitution of an actual meeting. In other words, the issue considered by the Court was whether the 2013 Act, read with various circulars and notifications, has the effect of altogether eliminating the need for an actual meeting being convened. Along with this issue, the Ho…

Concurrent Audit P & bank


opening date : 12-05-2014
last date :26-05-2014

Supreme Court on Sale and WC

Important principles on distinction between "contract for sale of goods" and "works contract" explainedA Constitutional Bench of 5 Judges of the Supreme Court had to consider whether the law laid down by a three-Judge Bench in State of A.P. v. Kone Elevators (India) Ltd (2005) 3 SCC 389 that a contract for manufacture, supply and installation of lifts in a building is a "contract for sale of goods" and not a "works contract" is correct or not. HELD by the Constitution Bench over-ruling the three-Judge Bench judgement:(i) In the case of a "contract for sale of goods", the entire sale consideration is taxable under the sales tax or value added tax enactments of the State legislatures. In the case of a "works contract", the consideration paid for the labour and service element has to be excluded from the total consideration received and only the balance is chargeable to sales tax or value added tax;(ii) Four concepts have clearl…

Court-Convened Meetings and Postal Ballot

Court-Convened Meetings and Postal Ballot
-Dhananjay TrivediBackgroundIn one of the first few cases interpreting the provisions of the Companies Act, 2013 (the 2013 Act), the Bombay High Court last week issued its judgment on the use of postal ballot facility at a court-convened meeting to consider a scheme of arrangement. In re Godrej Industries Limited, the court was concerned with a scheme of amalgamation of Wadala Commodities Limited into Godrej Industries Limited under sections 391 to 394 of the Companies Act, 1956 (the 1956 Act).[1] The narrow question at the initial stage for summons for direction to convene the meetings was “whether in view of the provisions of Section 110 of the [the 2013 Act] and SEBI Circular dated 21st May 2013, a resolution for approval of a Scheme of Amalgamation can be passed by a majority of the equity shareholders casting their votes by postal ballot, which includes voting by electronic means, in complete substitution of an actual meeting. In other wo…

Power to quick inquiry to regional director

FYI - The Ministry of Corporate Affairs Vide its circular dated 07/05/2014   has empowered the Registrar/ Regional Director to conduct quick inquiry against professionals and officers where  it is observed that any e-Form/document/information/application certified   contains incomplete information, false or misleading information or omission of material information.​ The said circular further states that cases shall be referred by the ​Registrar/ Regional Director to the e governance cell of the MCA which shall also refer the case to the concerned institute  for conducting disciplinary proceedings as well as debar the errant  professional from filing any document on the MCA Portal.

“National Judicial Reference System” (NJRS).

FYI - The CBDT has announced the setting up of a “National Judicial Reference System” (NJRS).The NJRS comprises of two components, the “Appeals repository and Management System” and the “Judicial Research and Reference System”.The Appeals repository is a database of all appeals pending in the ITAT, High Court and Supreme Court.The Judicial Research and Reference System is a database of all decisions of the ITAT, High Courts & the Supreme Court. The cases will be indexed, searchable and cross-linked. The database will also have the relevant statutory enactments, circulars etc.It is expected that the NJRS will go-live by November/ December 2014.

Real Estate heading downfall?

"Mumbai has maximum inventory of unsold homes at 155.27 million sq feet I.e approximately 250000 houses which is equivalent to 40 months of unsold inventory. Unsold inventory denotes the number of months required to clear the stock at the existing absorption rate. An ideal scenario implies inventory should be in a range of 8 to 10 months. But Mumbai will take 4 years to sell these houses despite a slew of discount rates, new launches and back room negotiations. Same is the situation in NCR , Chennai , Kolkata, Banglore and Tier II cities. Builder's face crash crunch after RBI put brakes on 20:80 Ponzi scheme. This crisis will worse post 16 May if there is Hung Parliament.  India to expect big real estate crash in next 6 to 10 months.".... Dean Baker   ....renowned Economist who predicted 2008 US crisis. His advice to indian consumers ...."Indian consumers should be smart to defer their decision on investing in real estate ....and be greedy to sell their current expo…

Misuse of PAN from Tatkal

Don't give PAN number for railway Tatkal booking as proof of ID.

The Railways display the PAN. name, sex and age of passengers on reservation charts pasted on railway compartments.

This is a boon for benami transactions. It is mandatory for traders like jewelers to collect tax (TCS) from customers on purchase of jewelry worth Rs 5 lakh & bullion worth Rs 2 lakh.

While complying with TCS rules for collection, payment and uploading of TCS information (e-filing of TDS returns) jewellers have to furnish PAN of customers. For certain customers it is not convenient to provide PAN.

To accommodate high net worth customers, traders have a easy source of benami PAN numbers, name, sex and age from reserved railway compartments. A traveller recently noticed a chap copying PAN particulars along with name, age and sex pasted on reserved compartments, and when confronted with the help of railway police, he admitted that he gets Rs 10 per PAN particulars from jewellers. These persons are copy…

NO VAT on 40% of Restaurant Bill

VAT not leviable on 40% of the restaurant bill, which is subject to service taxIn the recent decision of the Uttarakhand High Court, in the case of Valley Hotels & Resorts vs. The Commissioner, Commercial Tax, Dehradun [TS-129-HC2014 (UTT)-VAT].
The High Court allowed the revision application filed by the assessee and held that, where the element of service has been declared and brought to tax vide notification dated 6 June 2012, by which Service tax is levied on 40% of the billed value in restaurant, no VAT can be imposed thereon.
The issue of double taxation seems to have been addressed and it has been held that VAT cannot be imposed on that portion of the restaurant bill, which has already suffered Service tax.