201302 newsletter

20
(Set up by an Act of Parliament) The Institute of Chartered Accountants of India Bangalore Newsletter Branch of SIRC Volume 01 | Issue 07 | February, 2013 | Pages : 20 ` 5/- per copy For Private Circulation only CPE - Feb. 2013 27 English Monthly ¥ÀÅtåzÀ PÁAiÀÄðUÀ¼À£ÀÄß ªÀiÁqÀ¢zÀÝgÀÆ ¥ÀÅtåzÀ ¥sÀ®ªÀ£Éßà ªÀiÁ£ÀªÀ EaÒ¸ÀÄvÁÛ£É; ¥Á¥ÀªÀ£ÀÄß ¥ÀqÉAiÀÄ®Ä EaÒ¸À¢zÀÝgÀÆ ¥Á¥À PÁAiÀÄðUÀ¼À£Éßà ªÀiÁqÀÄwÛgÀÄvÁÛ£É. Man desires to enjoy the fruits of virtuous deeds even though he does not perform any; he does not want sins even though he consciously indulges in sinful acts. Source: Mahabharata Major Programmes in February One Day Seminar on Domestic Transfer Pricing Refresher Course for Accountants (III Batch) One Day Seminar on Case Studies on International Taxation Analysis of Union Budget-2013 1 March 2013 st Congratulations Central Council Member Regional Council Members Raghu K. Nithin M. Srinivas C. S. Suresh P. R. Leaders from the Branch for the term 2013-16 Branch Election 2013 Single Transferable System of Voting Last Date of Receipt of Nominations 25.02.2013 16.03.2013 Date of Election Refer Page No: 17 & 18

Upload: harsha-shivanna

Post on 13-Apr-2015

76 views

Category:

Documents


0 download

DESCRIPTION

ZSXDFVAESF

TRANSCRIPT

Page 1: 201302 Newsletter

(Set up by an Act of Parliament)

The Institute of Chartered Accountants of India

BangaloreN e w s l e t t e rBranch of SIRC

Volume 01 | Issue 07 | February, 2013 | Pages : 20 ` 5/- per copyFor Private Circulation only

CPE

- Feb

. 201

3

27

English Monthly

¥ÀÅtåzÀ PÁAiÀÄðUÀ¼À£ÀÄß ªÀiÁqÀ¢zÀÝgÀÆ

¥ÀÅtåzÀ ¥sÀ®ªÀ£Éßà ªÀiÁ£ÀªÀ EaÒ¸ÀÄvÁÛ£É;

¥Á¥ÀªÀ£ÀÄß ¥ÀqÉAiÀÄ®Ä EaÒ¸À¢zÀÝgÀÆ

¥Á¥À PÁAiÀÄðUÀ¼À£Éßà ªÀiÁqÀÄwÛgÀÄvÁÛ£É.

Man desires to enjoy the fruits of virtuous

deeds even though he does not perform any;

he does not want sins even though he

consciously indulges in sinful acts.

Source: Mahabharata

Major Programmes in February

One Day Seminar on

Domestic Transfer Pricing

Refresher Course for

Accountants (III Batch)

One Day Seminar on

Case Studies on

International Taxation

Analysis of

Union Budget-20131 March 2013

st

Congratulations

Central Council Member Regional Council Members

Raghu K. Nithin M. Srinivas C. S. Suresh P. R.

Leaders from the Branch for the term 2013-16Branch Election 2013

Single TransferableSystem of Voting

Last Date of Receipt of

Nominations

25.02.2013

16.03.2013Date of Election

Refer Page No: 17 & 18

Page 2: 201302 Newsletter

2

states that the Legislature of the State shall lay down the

minimum qualifications and experience of auditors and auditing

firms that shall be eligible for conducting accounts of the

Cooperative Societies. By virtue of article 243ZM (3) every

cooperative society shall cause to be audited by an auditor or

auditing firm referred to in clause (2) appointed by the general

body of the Cooperative Society, provided that such auditors or

auditing firms shall be appointed from a panel approved by a

State Government or an authority authorized by the State

Government in this behalf.

Dear Professional Colleagues,

Hearty greetings to all of you.

By virtue of 97th Constitutional

Amendment the State shall, by

law, make provisions with

respect to the maintenance of

accounts by the Cooperative

societies and the auditing such

accounts at least once in each

financial year. Article 243ZM(2)

3rd Batch of IDT Course Inauguration

Inauguration

3rd Batch of IDT Course Inauguration 16th Batch of FNFE Valedictory

Cross section of participants

100th Batch of IPCCOP A & B Sections

Facilitator

111th Batch of GMCS Inauguration

Inauguration Chief GuestCA. Venkatakrishnan N

112th Batch of GMCS Inauguration

Inauguration Chief Guest CA. S. Kumar

Chief GuestMr. Raghuraman Muthukrishnan

CA. MadhukarN Hiregange

Course CoordinatorCA. A. Saiprasad

Course CoordinatorCA. Nayaz Pasha

Chief GuestCA. Venkatakrishnan N

Cross section of participants

Cross section of participants

Cross section of participants

100th Batch of IPCC Orieantation ProgrammeParticipants Section - A

100th Batch of IPCC Orieantation ProgrammeParticipants Section - B

Contd. on next page

Chairman's Communique . . .Chairman's Communique . . .

Page 3: 201302 Newsletter

3 February2013

Bangalore Branch of SIRCof the Institute of Chartered Accountants of India

Contd. from previous page

With warm regards,

CA. Nithin MahadevappaChairman

In this regard we had a meeting with Director of Co-operativeAudits during last week of January and the Department is lookingforward for empanelment of CAs and CA firms during April 2012.Yes it is a new professional opportunity for members in practice,however to enable skills required for such audits, Bangalore Branchwill conduct seminars, workshops in the coming months to acquirenecessary knowledge to do such audits. I request members to comeforward and serve the cooperative sector.Branch Elections 2013

Bangalore Branch election for the term 2013-16 is scheduled on16.03.2013 (Saturday). Election of Branch committee members hasto be on Single Transferrable System of Voting. As per the Councilguidelines the member eligible to contest, propose or second and votein the elections if his name is appearing in the register of members ofBangalore Branch of SIRC of ICAI on or before 16.09.2012. Thecomplete details relating to Election-2013 is provided inside thisNewsletter.Information Technology Training (ITT) andOrientation Programme for CA students

Bangalore Branch is conducting parallel batches of ITT andOrientation Programme for CA Students at different locations/Colleges. I request members to refer their students for these programsso that the students can be eligible to appear for May 2013 &November 2013 exams.GMCS-I

All the students registered on or after 01.05.2012 shall completeGMCS-I programme during the first year of Article-ship. BangaloreBranch is planning to start GMCS-I during February 2013, I requestthe members to refer their students for GMCS-I so that the last minuterush can be avoided.Scholarship for Deserving CA Students

Bangalore Branch of SIRC of ICAI is providing scholarship for50 deserving students. We request members to refer/inform to theirarticled students about this benefit and recommend the need basedmeritorious students for this benefit. Students are requested to contactMrs Anuradha at the institute for further details. The application andeligibility criteria are hosted in Bangalore Branch website, and thelast date to receive the applications is 20.02.2013.E-learning/virtual coaching for CPT/IPCC/CA Final Courses

In support to ICAI’s flagship initiative of e-learning/virtual classesfor CA students, Bangalore Branch is recording classes for CPT/IPCC/CA Final Courses. We requested interested faculties to contactBangalore Branch before 15.01.2013, however we have not gotresponse for this initiative. I request interested members to contactBangalore Branch so that we can support the Students at large.January 2013 Activities

During January 2013, Bangalore branch has conducted thefollowing programs for its members, students and general public atlarge:

• Certification Course on Indirect Taxes – First time in the countrythis program is being live telecasted for the benefit of members.Interested members can log on to our website and watch theprogramme live.

• Workshop on “An insight of the Companies Bill-2012”• Workshop on “Service Tax”• Seminar & Interactive Session on “CONSULTATIVE PAPER ON

REVIEW OF CORPORATE GOVERNANCE NORMS ININDIA” – Discussion on concept paper by eminent speakers fromthe Industry & Practice and suggestion sent to SEBI.

• Republic Day celebrations• Basics of Information Technology• CPE Tele conference • Study Circle Meetings• Impact Seminars • Coaching classesFebruary 2013 Activities• Certification Course on Indirect Taxes• Seminar on Transfer Pricing in respect of specified Domestic

Transactions• Case studies on International Taxation – Group Discussion and

Analysis• CPE Tele conference• Study Circle Meetings • Impact Seminars• Training Programme for Department of Posts• Refresher Course for Accountants (RCA) IIIRefresher Course for Accountants (RCA)

After successfully completing the second batch of RCA duringDecember 2012, Bangalore Branch is commencing the third batch inFebruary 2013. We request members of the profession to refer theirclients’ accountants and encourage the Branch’s initiative. The glimpseof RCA is as follows;

This Refresher Course for Accountants (RCA) course is aninitiative of the ICAI as a Corporate Social Responsibility andBangalore Branch of SIRC of ICAI has designed this course in a mostbefitting manner to empower the participants in the area of Accounts,Banking, Taxation & Corporate & Allied Laws. This course will equipthem with the skills necessary for improved performance as well asto motivate them to reach new heights in the field of Finance &Accounting.Web-casting & ICAI Tube

All the programs at Bangalore Branch are live webcasted, archivedand available on demand. All the recorded programs of Bangalorebranch are hosted in the Bangalore branch website, to watch themplease visit www.bangaloreicai.org/resources/icai-tube.

We request the members once again, to attend the programmes ofthe branch and derive maximum benefit.

Page 4: 201302 Newsletter

4February2013

DISCLAIMER: The Bangalore Branch of ICAI is not in anyway responsible for the result of any action taken on the basis of the advertisement publishedin the newsletter. The members, however, bear in mind the provision of the code of ethics while responding to the advertisements. The views and opinionsexpressed or implied in the Branch Newsletter are those of the authors and do not necessarily reflect that of Bangalore Branch of ICAI.

Note : High Tea at 5.30 pm for programmes at 6.00 pm at Branch Premises.

Advertisement Tariff for the Branch NewsletterColour full pageOutside back ` 30,000/-Inside back ` 24,000/-

Advt. material should reach us before 22nd of previous month.

Inside Black & WhiteFull page ` 15,000/-Half page ` 8,000/-Quarter page ` 4,000/-

Editor : CA. Nithin MahadevappaSub Editors : CA. Ravindranath. S.N

CA. Prasad. S.RCA. Shivakumar. H

Cover Page SubhashitaTranslation by : CA. Allama Prabhu M.S.

CALENDAR OF EVENTS - February & March 2013Date/Day Topic /Speaker Venue/Time CPE Credit

06.02.13 Information Security aspects in Internal Controls Auditing Branch PremisesWednesday Mr. Jayachandran B. 06.00pm to 08.00pm08.02.13 CPE Teleconference Programme “Drafting of documents including Branch PremisesFriday agreement for sale, property development agreement, MOUs, 11.00am to 01.00pm

Power of Attorney and Will etc.”CA. Tarun Ghia, Mumbai

08.02.13 One Day Seminar on Domestic Transfer Pricing Branch PremisesFriday Delegate Fee: Rs.500/- Refer Page No: 12 09.30am to 05.30pm11.02.13 Refresher Course for Accountants (III Batch) Branch PremisesMonday to 10.00am to 05.30pm ––—15.02.13Friday Fee: Rs.5,000/- Refer Page No:1413.02.13 Issues on Taxation of Charitable Trusts or Institutions - NGOs, NPOs Branch PremisesWednesday CA. Dr. N. Suresh 05.30pm to 08.30pm15.02.13 CPE Teleconference Programme on “Accounting Standards” Branch PremisesFriday CA. Sanjay Jain, Hyderabad 02.30pm to 04.30pm16.02.13 One day Seminar on Case Studies on International Taxation Hotel Taj Vivanta,Saturday M.G.Road, Bangalore

Delegate Fee: Rs.1,500/- Refer Page No: 13 09.30am to 05.30pm20.02.13 Concepts of Insurance and Reinsurance, a tool towards risk mitigation Branch PremisesWednesday CA. Vinit Kishore 06.00pm to 08.00pm27.02.13 CPE Teleconference Programme “Legal and Procedural Issues in LLP” Branch PremisesWednesday CA. Vinay K. Ramani 11.00am to 01.00pm27.02.13 “The Law behind all the Tax Laws”- The provisions of constitutions Branch PremisesWednesday of India with respect to all types of Tax Laws 06.00pm to 08.00pm

CA. Mohan Kumar B. N.01.03.13 Analysis of Union Budget-2013 Jnana Jyothi ConventionFriday Moderators: Centre, Central College

CA. T.V. Mohandas Pai & CA. H. Padamchand Khincha Campus, Near MysoreOpen to General Public Bank Circle, B'lore -10Delegate Fee: Nil For further details please visit Branch website 4.00pm to 08.00pm

06.03.13 Reverse Charge Mechanism and Abetments under the Serivice Tax Law Branch PremisesWednesday CA. Madhur Harlalka 06.00pm to 08.00pm09.03.13 Clause by Clause Discussion Jnana Jyothi ConventionSaturday For further details please visit Branch website 08.30am to 07.30pm16.03.13 Branch Election Branch Premises ––—Saturday 08.00am to 06.30pm

2 hrs

2 hrs

2 hrs

3 hrs

2 hrs

2 hrs

6 hrs

6 hrs

2 hrs

3 hrs

6 hrs

2 hrs

Page 5: 201302 Newsletter

5 February2013

Bangalore Branch of SIRCof the Institute of Chartered Accountants of India

TAX UPDATES DECEMBER 2012CA. Chythanya K.K., B.Com, FCA, LL.B., Advocate

VAT, CST, ENTRY TAX,PROFESSIONAL TAX

PARTS DIGESTED:a) 55 VST – Part 1b) 56 VST – Part 2 to 5c) 17 KCTJ – Part 9

Reference / Description[2012] 56 VST 193 (Kar. – HC): Stateof Karnataka v. R.K. Powergen Pvt.Ltd. - In the instant case the KarnatakaHigh Court held that entries in oneenactment cannot be construed withreference to entries in anotherenactment.While holding so, it distinguished thedecision of the Supreme Court in thecase of CST v. Rewa Coal Fields[2002] 125 STC 212 (SC) on the basisthat the judgment of the SupremeCourt was rendered in the context ofsales tax enactment of MadhyaPradesh whereas the instant case wasa levy of tax under the provisions ofthe Karnataka Tax on Entry of GoodsAct, 1979 and as to whether theproduct of the dealer, is one withinthe scope of entry 52 of Schedule I tothe Act.Therefore, the Court held thatexamination could only be if theproduct being in the nature of aconsumable or in the nature of a rawmaterial, fell within the scope of 52or otherwise. Hence, the Court heldthat the judgment of the SupremeCourt could not be considered anauthority for deciding whether theproducts were taxable under entry 52of Schedule I of the KTEG Act.Eventually, the High Court ruled thattwist drills, cutters, reamers, taps,chippers knives, drill bits are in the

nature of parts and accessories of plantand machinery and hence exigible toentry tax.

INCOME TAXPARTS DIGESTED:a) 349 ITR – Part 3 to 7b) 211 Taxman – Part 2 to 4 & 6c) 20 ITR (Trib) – Part 3 to 7d) 139 ITD – Part 5 to 7e) 40 CAPJ – Part 5 & 6f) 44-B BCAJ – Part 3g) 61 TCA – Part 6h) 7 International Taxation–Part 6

Reference / Description[2012] 349 ITR 292 (AAR): AlstomTransport SA, In re - In the instantcase the Authority for Advance Rulingruled that the consortium is taxableas association of persons by observingthat the consortium of four membershad came together for bidding for thework tendered, after jointly preparingfor the bid and were prepared toexecute the project if their tender wereto be accepted and thereafter carriedout the work at the joint responsibilityof four members in pursuance of anintention to promote their business.Having thus held that an AOP existswhich is a resident AOP, the AARmade the entire income of theconsortium chargeable to tax in India.It is interesting to note that if the AOPis a resident, the principal need notdeduct tax on supply portion.[2012] 349 ITR 352 (SC): CIT v.Bongaigaon Refinery andPetrochemical Ltd. - In the instantcase the question that arose forconsideration before the SupremeCourt is whether the assessee was

statutorily obliged to maintain itsaccounts unit-wise for claimingdeduction under Sections 80HH and80-I.The Supreme Court held that there isno provision prescribing, accounts tobe maintained unit-wise, but ininterest of justice, in the instant case,Court directed the Assessee to workout unit-wise profits and gains ofdeduction on the basis of theconsolidated accounts maintained bythe Assessee.[2012] 349 ITR 418 (All. – HC):Shyam Enterprises v. CIT - In theinstant case the Allahabad High Courtheld that the amendment in Section43(3) with effect from 01.04.2004 isonly clarification in nature and itexcludes livestock or buildings orfurniture and fittings from plant. Whatwas excluded in the context wasbuilding or furniture and fittings andnot building of a special nature, whichdoes not have existence independentfrom the plant.Therefore, the Court held that theAssessee was entitled to depreciationon the cooling chambers of the coldstorage unit treating it as plant at therate of 25%.With due respect, the Hon HC missedthe intent of amendment. Theamendment intended to exclude thebuilding from the meaning of plantwhich by functional test would havequalified as plant.[2012] 349 ITR 442 (Ker. – HC):CIT v. Abraham (P.D.) - In the instantcase the Kerala High Court held thatthe unaccounted expenditure in aproper business cannot be treated asan expenditure prohibited by law toattract Explanation to Section 37(1)of the Act.[2012] 349 ITR 566 (Bom. – HC):Vijaya Silk House (Bangalore) Ltd.v. Union of India and others - In the

Page 6: 201302 Newsletter

6February2013

instant case the Bombay High Courtfollowing the decision of the GujaratHigh Court in the case of AvaniExports v. CIT [2012] 348 ITR 391(Guj.), held that amendment to getover decision of Tribunal amounts todiscrimination between cases whichhave become final and pending caseswhich further amounts to violation ofArticle 14 of the Constitution of India.Therefore the Court held that suchamendment should be prospective innature and not retrospective in nature.[2012] 349 ITR 582 (Kar. – HC): CITand another v. Infosys TechnologiesLtd. (No. 1) - In the instant case theKarnataka High Court held that theamount spent by Assessee foracquisition of membership of clubsand for obtaining ISO-9001 certificatewas revenue expenditure.[2012] 349 ITR 588 (Kar. – HC): CITand another v. Infosys TechnologiesLtd. (No. 2) - In the instant case theKarnataka High Court held that thecontribution made to traffic policewould not qualify for deduction underSection 37 of the Act for the reasonthat it is the duty of the police toregulate the traffic and the amountspent towards regulation of traffic canat the most be considered as donation.With due respect, the aforesaiddecision discourages the companiesto fulfil their CSR [corporate socialresponsibility] particularly when theamended Companies Act mandatesthe CSR spend.[2012] 349 ITR 606 (Kar. – HC) :CIT and another v. InfosysTechnologies Ltd. (No. 4) - In theinstant case the Karnataka High Courtheld that the fluctuation in thevaluation of currency which has to beconverted to foreign currency hasdirect nexus to the export of softwareand therefore, can never be includedas income from other sources.

[2012] 349 ITR 685 (Bom. – HC):CIT v. Shankar Krishnan - In theinstant case the Bombay High Courtheld that the perquisite value of theresidential accommodation providedby the employer has to be computedon actual amount of lease rental paidor payable by the employer and not onnotional basis. The notional intereston the lease deposit cannot be takenwhile determining the perquisite value.[2012] 211 Taxman 133 (Delhi –HC); [2012] 27 taxmann.com 152(Delhi - HC): CIT v. EDS ElectronicData Systems (India) (P.) Ltd. - In theinstant case the Delhi High Court heldthat the assessee’s “programmanagement services”, which is amethod of providing software toachieve a particular end cannot beexcluded from the term “computersoftware” by virtue of CBDT’sCircular dated 26.09.2000 whichextends or explains the services asincluding back-office operations; callcentres; content development oranimation; data processing;engineering and design; geographicinformation; legal databases; medicaltranscription; pay roll; remotemaintenance; revenue accounting;support centres; web-site services etc.Further it held that CBDT itself hadinterpreted the terms “computersoftware” occurring in Explanation 2to Section 10A of the Act in anexpansive manner rather than anarrow manner. “Computer software”even otherwise, generally has to begiven a wider interpretation since itimplies a system or software whichwould be capable of catering todifferent services capable ofcustomization having regard topeculiar needs of a given situation.This decision is an eye opener to thedepartment which keeps disturbingthe exemption claim of the assessees

on the frivolous premise that theiractivities do not constitute computersoftware development. Thedepartment’s lack of desire to followits own circular is highly undesirable.[2012] 211 Taxman 311 (All. – HC);[2012] 28 taxmann.com 18 (All. -HC): CIT v. Shri Advait AshramSociety - In the instant case theAllahabad High Court held that non-filing of returns by Assessee-trust forlast several years cannot be a groundfor declining to grant registration underSection 12AA, as Commissioner isonly enjoined to see as to whether trustis genuine and whether object forwhich it has been formed is forcharitable purpose or not.[2012] 211 Taxman 152 (Delhi –HC)(Mag.); [2012] 27 taxmann.com322 (Delhi - HC): CIT v. RegencyCreation Ltd. - In the instant case theDelhi High Court has held thatapproval granted to a 100% EOUsetup under STPI cannot be deemedto be an approval under Section 10B.Further, the Court held that thoughconsideration which apply forgranting approval under Sections 10Aand 10B may to an extent overlap, yetdeliberate segregation of these twobenefits by statute reflectsParliamentary intention, that toqualify for benefit under either,specific procedure enacted for thatpurpose has to be followed.As this decision is likely to haveserious impact on several EOUSoperating in the country, it is time forCBDT to step in and advise thedepartment functionaries to acceptthe EOU claim without insisting onthe approval as held above.[2012] 211 Taxman 155 (Delhi –HC)(Mag.); [2012] 28 taxmann.com16 (Delhi - HC): CIT v. Arts BeautyExports - In the instant case the DelhiHigh Court held that in order to claim

Page 7: 201302 Newsletter

7 February2013

Bangalore Branch of SIRCof the Institute of Chartered Accountants of India

exemption under Section 10B,custom-bonding of EOU is not a pre-requisite. According to NotificationNo. 53/97-customs dated 31.06.1997,it is required only where imports arecontemplated for purposes ofmanufacture, production, packagingetc and for purposes of export ofgoods or services out of India.[2012] 211 Taxman (BN – XI) Part6; [2012] 28 taxmann.com 186 (AP– HC): Gujarat Tea Processors &Packers Ltd. v. Dy. CIT - In theinstant case the Andhra Pradesh HighCourt held that there is no TDSobligation on trade discount given bya manufacturer and seller, to retailerunder sales promotion scheme.[2012] 211 Taxman (BN – XIV) Part6; [2012] 28 taxmann.com 242 (All.– HC): CIT v. Jeevan DeepCharitable Trust - In the instant casethe Allahabad High Court held thatwithdrawal of Section 10(23C)(vi)registration does not mean withdrawalof Section 12 registration as well.[2012] 211 Taxman 554 (Mad. –HC); [2012] 23 taxmann.com 286(Mad. - HC): CIT v. PVP VenturesLtd. - In the instant case Assesseeallotted shares to its employees underEmployee Staff Option Plan andEmployee Staff Purchase SchemeGuidelines 1999 and debited in profitand loss account difference in valueat which shares were allotted andmarket value of shares under head ofstaff welfare expenditure.The Madras High Court held thatsince assessee had to follow SEBIdirection and by following suchdirection it claimed ascertainedamount as liability for deduction, suchexpenditure was to be treated asrevenue expenditure.It may be noted that a special bench ofITAT has been constituted in Bangaloreto consider the issue of admissibility ofESOP as an expenditure.

[2012] 211 Taxman 576 (Delhi –HC); [2012] 27 taxmann.com 50(Delhi - HC): Sharp Business Systemv. CIT- In the instant case the DelhiHigh Court held that non-compete feepaid by assessee to its erstwhilepartner as consideration for not settingup any business of selling, marketingand trade of electronic office productsfor a period of seven years amountedto capital expenditure and thus, samewas not allowable under Section 37(1)of the IT Act.Further, in respect of depreciation, itheld that since in case of non-competition agreement, advantage isa restricted one in point of time and itdoes not confer any exclusive rightto carry on primary business activity,amount paid as non-compete fee doesnot qualify for depreciation underSection 32(1)(ii) of the IT Act.[2012] 20 ITR (Trib) 623 (Rajkot):Saffire Garments v. ITO - In theinstant case the Rajkot Tribunal heldthat the filing of return before timeallowed under Section 139(1) is amandatory condition for grantingdeduction in respect of unit in SEZ.[2012] 139 ITD 612 (Bang.); 28taxmann.com 82 (Bang. – Trib.):Akzo Nobel Coatings India (P.) Ltd.v. Dy. CIT - In the instant case theBangalore Tribunal held that where anassessee purchases an asset by takinga loan from a related concern andclaims depreciation thereupon andwhere subsequently such loan waswaived and assessee treats such waiveras capital receipt not chargeable to taxand continues to claim depreciation onsuch asset, revenue cannot do anythingto deny claim of depreciation as lawhas a lacuna in that regard.Further it held that provisions ofSection 43(6)(c)(i)(B) could not havebeen invoked on the ground of waiverof loan since there was no sale or

discarding or demolishing ofdestruction of any assets comprisingin block of assets during previous year.[2012] 139 ITD 628 (Delhi): 24taxmann.com 189 (Delhi – Trib.);Dy. CIT v. Cosmo Films Ltd. - In theinstant case, Assessee purchased newassets during preceding previous yearwhich were put to use for less than 180days. Apart from normal depreciation,Assessee was also eligible to claimaddition depreciation at rate of 15%for said new assets. Since assets wereput to use for less than 180 days, inpreceding assessment year assesseeclaimed only 50% of 15%. Balanceadditional depreciation was claimed byassessee in the impugned assessmentyear. Assessing Officer, however,denied said claim.The Delhi Tribunal observed thatsecond proviso to Section 32(1)(ii)restricts the allowances only to 50%where the assets have been acquiredand put to use for a period of less than180 days in the year of acquisition. Itfurther observed that Section 32(2)provides for a carry forward/set offof unabsorbed depreciation.In view of the above observation, theTribunal held that the restrictionprovided under Section 32(1)(ii) is onlyon the basis of period of use. There isno restriction that balance of one timeincentive in the form of additional sumof depreciation shall not available in thesubsequent year. Therefore, the Tribunaldirected to extend the benefit in thesubsequent year.Circular 1 of 2013 dated 17.01.2013:Central Board of Direct Taxes hasissued following clarification inrespect to export of ComputerSoftware – Section 10A read withSections 10AA & 10B -(a) Whether “on-Site” development

of Computer Software Qualifiesas an extort activity for tax

Page 8: 201302 Newsletter

8February2013

benefits under sections 10A,10AA and 10B of the Act?Clarification: “On-Site”development of Computer SoftwareQualifies as an extort activity fortax benefits under sections 10A.10AA and 10B, because thesewould amount to ‘deemed export’.

(b) Whether receipts from deputationor Technical Manpower for such“On-Site” Software developmentabroad at the Client’s place areeligible for deduction undersections 10A, 10AA and 10B ofthe Act?Clarification: Profits earned as aresult of deployment of TechnicalManpower at the client’s placeabroad specifically for softwaredevelopment work pursuant to acontract between the client andthe eligible unit should not bedenied benefits under sections10A, 10AA and 10B provided suchdeputation of manpower is for thedevelopment of such software andall the prescribed conditions arefulfilled.

(c) Whether it is necessary to haveseparate master service agreement(MSA) for each work contract andto what extent it is relevant?Clarification: The tax benefitsunder sections 10A, 10AA and10B would not be denied merelyon the ground that a separate andspecific MSA does not exist foreach SOW. The SOW wouldnormally prevail over the MSA indetermining the eligibility for taxbenefits unless the AssessingOfficer is able to establish thatthere has been splitting up orreconstruction of an existingbusiness or non-fulfilment of anyother prescribed condition.

(d) Whether Research anddevelopment (R & D) ActivitiesPertaining to SoftwareDevelopment would be Coveredunder the Definition of “ComputerSoftware” Stipulated UnderExplanation 2 to Sections 10A and10B of the Act?Clarification: Services covered bythe Notification No. 890(E), dated26-9-2000 issued by the CBDT, inparticular, the ‘Engineering andDesign’ do have the in-builtelements of Research andDevelopment. Therefore anyResearch and Developmentactivity embedded in the‘Engineering and Design’, wouldalso be covered under the saidNotification for the purpose ofExplanation 2 to Sections 10A and10B of the Act.

(e) Whether tax benefits underSections 10A, 10AA and 10Bwould continue to remainavailable in case of a slump-Saleof a Unit/Undertaking?Clarification: Slump sale wouldnot result into any splitting orreconstruction of existing business.These are factual issues requiringverification of facts. However, onthe sole ground of change inownership of an undertaking, theclaim of exemption cannot bedenied to an otherwise eligibleundertaking and the tax holidaycan be availed of for the unexpiredperiod at the rates as applicablefor the remaining years, subject tofulfilment of prescribedconditions.

(f) Whether it is necessary tomaintain separate books ofaccount for an assessee in respectof its eligible units claiming tax

benefits under sections 10A and10B?Clarification: Since there is norequirement in law to maintainseparate books of account, it is notnecessary to maintain separatebooks of account for an assesseein respect of its eligible unitsclaiming tax benefits undersections 10A and 10B.

(g) Whether tax benefits undersection10AA can be enjoyed byan eligible SEZ unit consequentto its transfer to another SEZ?Clarification: Tax holiday benefitshould not be denied merely on theground of physical relocation ofan eligible SEZ unit from one SEZto another if done in accordancewith Instruction No. 59 (F.No-C-4/2/2010-SEZ) issued byDepartment of Commerce (SEZDivision) and if all the prescribedconditions are satisfied under theIncome-tax Act, 1961. Hence, unitso relocated will be eligible toavail of the tax benefit for theunexpired period at the ratesapplicable to such years.

(h) Whether new Units/undertakingsset up in the same location wherethere is an existing eligible unit/undertaking would amount toexpansion of the existing unit/undertaking?Clarification: Setting up of such afresh unit in itself would not makethe unit ineligible for tax benefits,as long as the unit is setup afterobtaining necessary approvalsfrom the competent authorities;and has not been formed bysplitting or reconstruction of anexisting business; and fulfils allother conditions prescribed in therelevant provisions of law.

Page 9: 201302 Newsletter

9 February2013

Bangalore Branch of SIRCof the Institute of Chartered Accountants of India

RECENT JUDICIALPRONOUNCEMENTS ININDIRECT TAXESCA. N.R. Badrinath, Grad C.W.A., F.C.A.CA. Madhur Harlalka, B.Com., F.C.A

SERVICE TAX Promotion, marketing and

distribution of medicalequipments of foreignmanufacturer in India notexport of services: The assesee inthe present case was engaged inpromotion, marketing anddistribution of medical equipmentfor foreign company in India. Theassesse contended that suchservices were delivered and usedoutside India, as the ultimatebeneficiary is the foreigncompany which is situated outsideIndia. Therefore, it amounts toexport of services and service taxis not payable on the same. TheTribunal referred to theGeneralAgreement on Trade in Servicesand held thatfor a transaction willamount to export only when userand use of services is locatedoutside India. The Tribunal reliedon the decision of MicrosoftCorporation (India) Pvt Ltd [2009(15) S.T.R. 680] wherein it washeld that merely because theservice recipient is located outsideIndia, it cannot be said thatservices has been used outsideIndia. In the assessee’s case theservice of promotion andmarketing of promotion ofmarketing goods manufactured bythe supplier has taken place inIndia and the said serviceis for thepurpose of promoting the businessof the foreign manufacturer in

India. Therefore, it cannot be saidthat the service has been deliveredoutside India and used in businessoutside India; therefore, theactivity does not come within thescope of export of services andservice is payable on suchservices. [ Life Care MedicalSysytems Vs. Commissioner ofService Tax, Mumbai-II 2013(29)S.T.R. 129 (Tri.- Mumbai)]

Maintenance and RepairService: The assesseeisundertaking the activity ofretreading of tyres and applied fora stay petition.The revenuecontended that the material costshould be included for determiningthe assessable value for the purposeof Service Tax. The assesseecontended that theit was treating60% towards cost of raw materialsand paying service tax ontheremaining consideration of40%. The assessee was payingVAT in respect of the material.They relied upon the decision inthe case of Chakita RanjiniUdyamvs CEX, Cus& ST, Mysorereported in 2009 (16) STR 172whereby the Tribunal held thatwhere the material costis separatelymentioned in the invoice, the sameis not to be added to the assessablevalue forthe purpose of servicetax. The stay petition was allowedand pre-deposit waived. [Sai TyresCraft vs. CCEx., Pune - II 2013-TIOL-72-CESTAT-MUM]

Value of electricity supplied notto be included as a part ofrenting of immovable propertiesfor determining value of taxableservice.The assessee is engaged inrenting of immovable propertiesand maintenance and repair of thebuilding. Apart from these, theassessee is also under anobligation to supply electricity tothe tenants. The revenue allegedthat electricity charges should beincluded as a part of the ‘Rentingof immovable property service’.The assessee contended thatelectricity is not ‘goods’ andcannot form part of taxableservice. The assessee relied onNotification 12/ 2003 clarifies thatsupply of goods shall not form oftaxable service. Based on thesecontentions, the Tribunal waivedthe pre-deposit of service tax andgranted stay of demand. [M/sVansum Industries Vs. CCEx.Pune – III, 2013-TIOL-92-CESTAT-MUM]

Sharing of common staff doesnot amount to supply ofmanpower services: The issuebefore the Tribunal is whether thecommon staff of the appellantproviding services as employeesto appellant and also its sisterconcern can be termed as “supplyof manpower services” by theappellant to its sister concern. TheRevenue’s contention is that thesister concern is paying its shareof cost for utilizing the servicesof such staff amounts toconsideration for supply ofmanpower services. The Tribunalheld that the appellant is themanufacturer of excisable goodsand not engaged in the businessof providing supply of manpowerservices. The service is by the

Page 10: 201302 Newsletter

10February2013

personnel to the two companies inquestion and not one companyproviding services to the othercompany. Hence, there is nosupply of manpower by theappellant to its sister concernunder Section 65(105)(k) ofFinance Act, 1994. [M/sParamount Communication LtdVs CCE, Jaipur, 2013-TIOL-37-CESTAT-DEL]

Powers of Comptroller andAuditor General (CAG) of Indiato verify the records of theassessee under Finance Act,1994: The issue beforeHonourable High Court waswhether the CAG has power,authority and jurisdiction to auditthe accounts of the assessee, whois not an undertaking of theCentral Government or any StateGovernment. Revenue has relieddecision in the case of BergerPaints India Limited and Others,wherein it is held that Rule173G(6)(c) of the Central ExciseRules, 1944 provides for audit byan audit team deputed by theCAG. However, the HonourableHigh Court held that Section 94(2)of Finance Act, 1944 does notempower the Central Governmentto frame rules for audit of theaccounts of an assessee by anyaudit team under the Comptrollerand Auditor General of India.Statutory rules can be framed inexercise of power conferred bystatute and cannot introducesomething not contemplated in thestatute. Single Bench ofHonourable High Court hasreferred the matter to DivisionBench in view of conflictingdecision rendered in the case ofBerger paints India Ltd., which isin paramateria with Rule 5A of the

Service Tax Rules, 1994. [SKPSecurities Ltd Infinity InfotechParks Ltd Vs Deputy Director(RA-IDT) & Others, 2013-TIOL-38-HC-KOL-ST]

CENVAT CREDIT: Technical testing and analysis,

commission services etcareInput services: The issue beforeHonourable High Court iswhether the various services liketechnical testing and analysisservices, commission paid toforeign agents, courier services,clearing and forwarding services,technicalinspection& certificationand certain other miscellaneousservices are input services asdefined under Rule 2(l) of theCENVAT Credit Rules, 2004.Honourable High Court held thattwo tests should be applied fordetermining any service to qualifyas input service (i) the servicesshould have been utilized by themanufacturer directly or indirectlyin or in relation to the manufactureof final product or (ii) should beused in relation to activitiesrelating to business. If any one ofthe above tests is satisfied, thensuch a service falls within thedefinition of “input service” andservice tax paid on such servicesqualify as CENVAT credit.Accordingly, Honourable HighCourt held that technical testingand analysis services, courierservices and C&F agents, repairand maintenance of copiermachine, air conditioner, watercooler, managementconsultancy, interior decorator,commercial or industrialconstruction services, technicalinspection and certificationservices satisfies the abovecriteria, therefore, the same is

qualify as input services.However, insofar as it relates tothe commission agent services isnot being analogous to theactivities mentioned in thedefinition, would not fall withinthe ambit of the expression“activities relating to business”.Consequently, CENVAT creditwould not be admissible inrespect of the commission paidto foreign agents. [CCE,Ahmedabad–II Vs M/s CadilaHealthcare Ltd, 2013-TIOL-12-HC-AHM-ST]

Proportionate CENVAT credit isnot allowed to several units basedon one original invoice: The issuesbefore the Tribunal is whetherproportionate CENVAT credit isallowed to several units based onone original invoice. Tribunal heldthat CENVAT credit can be takenon the basis of invoice / bill orchallan under Rule 9(1) of theCENVAT Credit Rules, 2004. Ifthe CENVAT credit is allowed onthe basis photocopies without anycheck and credit can be takenmore than once on the basis ofsame invoices. Further, during theperiod of dispute, the facility ofdistribution service tax credit bythe head office by issuing invoicesas input service distributor wasavailable. There is no explanationas to why that facility has not beenavailed. In view of the above,CENVAT credit cannot be availed.[DSM Sugar Vs. CCE, Meerut-II,2013 (287) E.L.T. 236 (Tri.-Del)]

CENTRAL EXCISE: Brand name - SSI Notification:

The issue before the HonourableSupreme Court was whether themanufacture and sale of specifiedgoods that do not physically beara brand name but sold from

Page 11: 201302 Newsletter

11 February2013

Bangalore Branch of SIRCof the Institute of Chartered Accountants of India

branded outlets would be entitledto SSI exemption. The assessee isa manufacturer and retailer of thecookies under brand name ofsome other entity. The assesseewas also engaged in selling thesecookies loosely, on which nobrand name was affixed orinscribed. The assessee wasclaiming SSI exemption onloosely sold cookies from thecounter, which does not have brandname. Honourable Supreme Courtheld that it is not necessary forgoods to be stamped with a tradeor brand name for goods to beconsidered as branded goodsunder the SSI notification. Onceit is established that a specifiedgood is a branded good, whether itis sold without any trade name onit, or by another manufacturer, itdoes not cease to be a brandedgoods. [CCE, Chennai-II Vs M/sAustralian Foods India (P)Limited, 2013-TIOL-03-SC-CX]

Free service after sale is notliable to service tax: The issuebefore the Tribunal is whether ornot free after sale service providedby the dealer to the customerwould be includable in thetransaction value as additionalconsideration to the manufacturerfrom the dealer. The Tribunalrelied on the decision ofHonourable High Court in case M/s Tata Motors Ltd vs. Union ofIndia (2012-TIOL-721-HC-MUM-CX) and also the BoardCirculars No. 355/71/97-CXdated19.11.1997 and No. 435/1/99-CXdated 12.01.1999 and held thatfree after sale services charges arenot includable in the transactionvalue and these charges can beincluded in the transaction valueonly when they are charged by the

assessee to the buyer. [CCE,Chandigarh Vs Punjab TractorsLimited, 2013-TIOL-28-CESTAT-DEL]

CUSTOMS: No Export duty on supply of

goods by DTA to SEZ: The issuebefore the Honourable MadrasHigh Court was whether exportduty is payable on supply of goodsto Special Economic Zone (SEZ)by Domestic Tariff Area (DTA)unit. Honourable High Court heldthat Customs duty under Section12 of the Customs Act, 1962 isapplicable only to goods whichare taken out of India to place ofoutside India. Definition of exportand export goods in section 2(18)and 2(19) respectively covers onlysuch goods, and is not applicableto goods supplied to SEZ fromDTA. Though Section 76Fauthorized levy duties of Customson such goods, section 30 of theSEZ Act, 2005 has omittedspecifically. Section 7 and 26 ofthe SEZ Act, 2005 read togethermakes it clear that legislature hasno intention to levy any tax, dutyor cess on goods admitted orreceived within SEZ. NotificationNo. 66/2008-Cus states that levyof duties of Customs, being exportduty would be applicable only inrespect of goods which areexported outside India. [AdvaitSteel Rolling Mills Private LimitedVs. Union of India, 2012 (286)E.L.T. 535 (Mad.)]

VAT: Provision of access to passive

infrastructure facility to mobiletelecom operators for housingand operation of their activeinfrastructure does not amountto transfer of right to use goods.

The assessee ownedtelecommunication sites,infrastructure and equipment invarious licensed circles in Indiaand provided passiveinfrastructure and relatedoperations and maintenanceservices to telecommunicationoperators on a shared basis. Forproviding these services, theassesse entered into agreementwith various telecom operators.The assesse paid service tax onsuch services. The revenueconsidered the “passiveinfrastructure fee” as a deemedsale within the meaning of Section2(29)(d) of the Karnataka ValueAdded Tax Act, 2003 andtherefore liable to value added tax.On appeal to the High Court, asingle member bench held thatthere was transfer of right to usegoods and thus there was aliability to value added tax. Onfurther appeal by the revenue andthe assesse, the honorable HighCourt perused the terms of theagreement and held that theassesse has not transferred anyright in the passive infrastructureto the mobile operators. The rightthat is conferred to the mobileoperator is a permission to haveaccess to the passiveinfrastructure. Providing accessdoes not amount to right to usegoods. No sale of goods or transferis involved in the transaction andthere is no deemed sale so as toattract levy of tax under the KVATAct, 2003. The decision of thesingle member was set aside.[Indus Towers Ltd Vs. DeputyCommissioner of CommercialTaxes, Enforcement -1,Bangalore. (2012)56 VST 369(Kar)]

Page 12: 201302 Newsletter

12February2013

IMPORTANT DATES TO REMEMBER DURING THE MONTH OF FEBRUARY 20135th Feb. 2013 Payment of Central Excise Duty for the month of January 2013

Payment of Service Tax for the month of January 2013 (in case of persons other than individual,proprietor & partnership firms)

6th Feb 2013 E-Payment of Central Excise Duty & Service Tax for the month of January 20137th Feb 2013 Payment of TDS Deducted & Collected for the month of January 201310th Feb 2013 Filing of monthly returns of Central Excise for the month of January 201315th Feb 2013 Filing of VAT 120 under KVAT Laws for the month of January 2013

Payment of Provident Fund and filing of Form 5 & Form 10 for the month of January 201320th Feb 2013 Filing of VAT 100 under KVAT Laws for the month of January 2013

Payment of Professional Tax for the month of January 201321st Feb 2013 Payment of Employee State Insurance for the month of January 201325th Feb 2013 Filing of Monthly returns of Provident Fund for the month of January 2013. (Form 12A)

One day Seminar on Domestic Transfer PricingOn Friday, 08.02.2013 between 09.30am & 05.30pm

at Bangalore Branch of SIRC of ICAI6 hrsCPE

Timing Topics Speakers09.30am Inauguration

Session 1 CA. P.V. Srinivasan• Introduction • Overview Wipro Ltd, Bangalore• Meaning of specified domestic transaction (SDT) - sec 92BA

10.30am Tea/Coffee Networking break11.00am Session 2 CA. K. K. Chythanya

• Unusual concerns relating to SDT Bangalore• Documentation requirements • Dispute redressal mechanism

01.00pm Lunch Break02.00pm Session 3 CA. S. Rama Subramaniam

• TP methodologies - Application on SDTs Bangalore03.30pm Tea/Coffee Networking break04.00pm Session 4 CA. Narendra Jain

• Applicability of transfer pricing provisions to SDT - sec 92 Bangalore• Interplay between existing transfer pricing provisions and domestic transfer pricing

Delegate Fee Rs.500/-For further details please contact:

Ms.Geetanjali D, Tel: 080-30563513, Email: [email protected]

CA. Nithin Mahadevappa CA. Prasad S.R.Chairman Secretary

Page 13: 201302 Newsletter

13 February2013

Bangalore Branch of SIRCof the Institute of Chartered Accountants of India

One day Seminar onCase Studies on International Taxation

On Saturday, 16.02.2013 between 09.30am & 05.30pmat Hotel Taj Vivantha, MG Road, Bangalore

Timing Topics Speakers

09.30am to 10.30am Group discussion – Case study A Group leader to be identified

10.30am to 11.00am Tea/Coffee Networking break

11.00am to 01.00pm General assembly – CA. Padam Chand Khincha &Analysis of case study A CA. Chythanya K.K.

01.00pm to 02.00pm Lunch Break

02.00pm to 03.00pm Group discussion – Case study B Group leader to be identified

03.00pm to 03.30pm Tea/Coffee Networking break

03.30pm to 05.30pm General assembly – CA. Padam Chand Khincha &Analysis of case study B CA. Chythanya K.K.

Notes : a) If time permits, case study C will be taken up for analysis without the group discussion.b) Persons desirous of being group leaders may notify their interest to the branch

Delegate Fee : Rs.1,500/-Mode of payment: CASH / DD in favour of “BANGALORE BRANCH OF SIRC OF ICAI” PAYABLE AT BANGALORE

For further details please contact: Ms.Geetanjali D, Tel: 080-30563513, Email: [email protected]. Nithin Mahadevappa CA. Prasad S.R.

Chairman Secretary

6 hrsCPE

CASE STUDY A :Facts sheet :Name of the assessee :6Sigma-India Pvt Ltd., India (SPL)Foreign holding company :6Sigma-Pte, USA (SUK)Nature of the activity :Manufacture and sale of high end tiles andbricksOther information1. SPL is a unit entitled to benefit of

deduction under section 10AA2. SPL pays royalty of USD 1 Mn to SUK

after deducting tax for technology relatingto tiles

3. SPL determines the ALP of the royalty atUSD 0.75 Mn resulting in a suo motuaddition of USD 0.25 Mn

4. TPO revises the royalty to USD 0.50 Mnresulting in a further addition of USD 0.25Mn

5. SPL further pays a lumpsum of USD 5 Mnto SUK for acquiring technology tomanufacture bricks on an exclusive basisfor the territory of India with a clause forpayment of additional royalty of 1 USD perbrick for production in excess 2.5 Mn bricks

Issues :a) Royalty for tiles technology1. Can SPL claim deduction under section

10AA in respect of suo motu addition?2. Can SPL claim deduction under section

10AA in respect of TPO’s addition?3. Can SUK claim refund of tax paid on USD

0.5 Mn in India relying on Article 10(2)notwithstanding section 92C(4)?

b) Royalty for bricks technology1. What is the nature of income of lumpsum

royalty and additional royalty?2. Would the tax treatment be different if

lumpsum royalty is paid by way ofallotment of shares?

CASE STUDY B :Fact sheet :Name and status of the assessee :Nita is presently a resident in India and acitizen of IndiaReceipts during the year :1. Pension from Citibank NA2. Social security from US authorities3. Alimony from Rakesh – lumpsum as well

as periodical4. Payment from Rakesh for Nita’s daughter’s

education in USA5. Capital gains on sale of shares (ESOP

shares) allotted to her by Citibank NA6. Capital gains on sale of shares (ESOP

shares) given to her by Rakesh at the timeof divorce as part of settlement

Other information1. Nita worked for Citibank NA for 30 years.

During her employment, she was posted

Page 14: 201302 Newsletter

14February2013

REFRESHER COURSE FOR ACCOUNTANTSUnder the aegis of Management Development Programmes (MDP)

An appeal to the membersThird Batch of Refresher Course for Accountants

In the present business scenario, Accountants are involved in awide range of commercial activities covering functions relatingto Accounting, Finance, Costing, Tax laws and Labor laws. Theobjectives of the Course are to acquaint the participants aboutthe basics of these essential functions which are present in anyorganization. This is a Fast Forward Refresher Course forthose who are interested to learn the practical exposure to basicaccounting & finance practices and to learn the most importantand fundamental tax laws, in order to perform their accountingand finance works more effectively and competently

For whom:

Accountants, Accounts Executives & Accounts Assistantsworking in a manufacturing, service or trading organization.

Course Contents:

• Accounting

• Labor Laws & Business Laws

• Income Tax & Wealth Tax

• Central Excise, Service Tax and VAT

• Cost Accounting

• Banking

Duration :

The Third batch of the course will be conducted on the followingdays:

11th , 12th , 13th, 14th & 15th February 2013

Timings: 10.00am to 05.30pm

Fees: Rs. 5,000/- per participant, Cheque/DD should be drawnin favour of “Bangalore Branch of SIRC of ICAI” – payableat Bangalore.

Registrations Open on First Come First Served basis.

Venue:Management Training Centre,Bangalore Branch of SIRC of The Institute ofChartered Accountants of India,‘ICAI BHAWAN’, 16/O, Millers Tank Bed Area,Vasanthnagar, Bangalore – 560052Telephone: 080-30563500/511/512/513Email: [email protected] / [email protected]: www.bangaloreicai.org

We request you to pass on this information to your clientsenabling their accountants: Finance/ Accounts Executives toavail the benefits of this refresher course.

in different countries and she was in USAat the time of retirement

2. Nita was married to Rakesh in India andthe marriage lasted for 20 years before adivorce in an Indian court

3. Rakesh continues to live in USA andremains USA resident whereas Nita hasmoved to India

Issues :1. Is pension taxable? If so, in which country?2. Is social security taxable? If so, in which

country?3. Is alimony taxable? If so, in which

country?4. Is payment to daughter ’s education

taxable? If so, in which country?5. Is capital gain on sale of ESOP shares

taxable? If so, quantum thereof and inwhich country?

6. Will the tax position change if Nita is acitizen of USA and a POI in India?

Case study C :Facts sheet :Name and status of the assessee :Ranga is a budding cricketer and a student ofcommerceOther information :1. Leads Club of UK identifies Ranga’s talent

and offers him a package2. Package consists ofa) Ranga to move to UK for two yearsb) Ranga will continue his studies in UK and

Leads will pay for his stay and educationc) Leads pays a monthly stipend of 500

pounds to himd) Ranga is obliged to play for Leads in the

county matches for two yearse) There were 80 matches played during

Ranga’s stay. Out of the same, Ranga wasnot in the playing 11 for 16 matches. Hedid not play in 8 matches due to injury. 4matches were not played due to rain.

f) Ranga earned prize moneys of 2500 poundson account of his team’s wins, man of thematch awards and over all performance

g) Ranga earned ad money of 1000 poundsand coaching fee of 1000 pounds

h) Ranga leaves India on 01.09. 2009 andreturns on 15.08.2011

i) When Ranga returns to India, he wasallowed to retain the car which was givenfor his use during his UK stay.

Issues :1. What is the residential status of Ranga for

each of the years?2. What is the scope of taxation of following

incomes;a) Stipendb) Cost of stay and education paid by Leadsc) Ad revenued) Coaching feee) Prize moneyf) Use and transfer of car

Page 15: 201302 Newsletter
Page 16: 201302 Newsletter

16February2013

BANGALORE BRANCH OF SIRC OF ICAIRANK HOLDERS-FINAL-NOV 2012 EXAM

Reg.No. : SRO0243050Roll.No. : 105508NAME : MEGHA.M.SHAHMarks Obtained : 527Rank : 33

Reg.No. : SRO0251869Roll.No. : 105730NAME : HARISH KUMAR.JMarks Obtained : 510Rank : 49

Live TV & ICAI TubeAll the programmes of Bangalore branch are live telecasted.

To watch the programme, please visit :www.bangaloreicai.org / resources/livetv.

‘ICAI TUBE’ Bangalore branch’s initiative of archivingand streaming of programs in the form of videos

was well appreciated by the members. All the recordedprograms of Bangalore branch are hosted in the

Bangalore branch website, to watch these videos pleasevisit www.bangaloreicai.org/resources/icai-tubefor the benefit of the members. We welcome your

suggestion & feedback to serve you better.

Advertisements

Page 17: 201302 Newsletter

NOTICE CALLING FOR SPECIAL GENERAL MEETING OF THE BRANCHNo.: 1 Date : 02-02-2013

To,All members of Bangalore Branch of Southern India Regional Council

Dear Member,Sub: Notice for Special General Meeting of the members of its Branch

This is to inform you that the Special General Meeting of the members of the Bangalore Branch of the SouthernIndia Regional Council will be held from 8 AM to 6.30 PM on 16th March 2013 (i.e., the Saturday) in the premisesof the Branch 'ICAI BHAWAN', # 16/0, Millers Tank Bed Area, Vasanth Nagar, Bangalore - 560 052 for electing8 members of its Managing Committee for the term 2013-2016. The important dates relating to the above electionsare as given below.

Those members, who are desirous of standing for said election may submit their nomination form duly filled inand signed by the Candidate and by the Proposer and Seconder (both of whom shall be entitled to vote in the saidbranch election) together with a (non-refundable) nomination fee of Rs. 25/- by way of Pay Order drawn in favour ofthe “Bangalore Branch of the SIRC of the ICAI” and payable at Bangalore.

The nomination form duly filled in should be submitted in a sealed cover addressed to CA. P.R. Suresh,Returning Officer/Polling Officer, # 137, 5th Main, 2nd Block, 3rd Stage, Basaveshwaranagar, Bangalore-560 079 or atthe above address of the Branch against an acknowledgement. The blank nomination form can be had from the saidReturning Officer or from the undersigned or from the branch premises effective from 07-02-2013 till 5 PM of25-02-2013, i.e. the last date of receipt of nominations. The said nomination form is also available on the website ofthe Branch www.bangaloreicai.org

IMPORTANT DATES1. Last Date of receipt of nominations 25.02.2013

6 PM

2. Date of scrutiny of nominations 27.02.2013

3. Display of list of valid nominations on the Notice Board of the Branch 27.02.2013

4. Last date for withdrawal of nominations 01.03.20136 PM

5. Display of final list of nominations (after withdrawals, if any) 02.03.20136 PM

6. Date of Election (if the nominations exceed more than the number 16.03.2013of vacancies) 8 AM to 6.30 PM

7. Declaration of Result 18.03.2013

The election, shall be held under the Single Transferable System of Voting.

Yours faithfully

Secretary, Bangalore Branch

'ICAI BHAWAN', # 16/0, Millers Tank Bed Area, Vasanth Nagar, Bangalore - 560 052Tel : 080-3056 3500, Fax : 080-3056 3542, E-mail : [email protected], Website : www.bangaloreicai.org

Page 18: 201302 Newsletter

FORM OF NOMINATIONFORM OF NOMINATION OF A CANDIDATE FOR ELECTION TO THE

MANAGING COMMITTEE OF BANGALORE BRANCH OFSOUTHERN INDIA REGIONAL COUNCIL

FOR THE TERM 2013 - 2016

We, the undersigned Members of the Institute of Chartered Accountants of India, belonging to the BangaloreBranch of Southern India Regional Council, not being in arrears on this day in respect of Annual Membership Fee forthe current year and also being qualified to vote in the election of members to the Managing Committee of the saidBranch for the term 2013 - 2016, do hereby nominate _________________________________________, who is aMember of the Institute belonging to the said Branch and is also eligible to vote in the said election, as a candidate forthe election to the members of the Managing Committee to be held on ______ 2013.

(1) Signature of Proposer _______________________________________________________________

Name in full _______________________________________________________________

Membership Number _______________________________________________________________

Professional Address _______________________________________________________________

_______________________________________________________________

Dated this ___________________ day of _______________________2013.

(2) Signature of Seconder _______________________________________________________________

Name in Full _______________________________________________________________

Membership Number _______________________________________________________________

Professional Address _______________________________________________________________

_______________________________________________________________

Dated this_____________________ day of ___________________2013.

I, ____________________________________________, being a Member of the Institute belonging to the____________________Branch not being in arrears on this day in respect of Annual Membership Fee for thecurrent year and also being qualified to vote in the election of members to the Managing Committee of the saidBranch for the term 2013 – 2016, agree to stand for the election to the said Managing Committee of the Branch to beheld on__________ 2013.

I agree to abide by the provisions of the Directions of the Central Council regarding Functions of the Branchesof the Regional Councils and the Chartered Accountants Regulations, 1988.

I send herewith the fee for election of Rs. 25.00 (Rupees Twenty Five only) by Demand Draft/Pay Order No.___________ dated the _______________ on ______________ Bank drawn in favour of the Branch.

Signature of Candidate _______________________________________________________________

Name in full _______________________________________________________________

Membership Number _______________________________________________________________

Professional Address _______________________________________________________________

_______________________________________________________________

Dated this ___________________day of _______________2013.

..................

Page 19: 201302 Newsletter

Advertisement

Page 20: 201302 Newsletter

20 Bangalore Branch of SIRC News LetterBangalore Branch of SIRC of ICAI

EDITOR:

English Monthly Printed & Published & Edited by , on behalf of., No.16/O, 'ICAI Bhawan', Millers Tank Bed Area, Vasantnagar, Bangalore-560052, Karnataka

Printed at:Published at: ,

Editor CA. Nithin Mahadevappa, Chairman

44/1, K.R. Road, Basavanagudi, Bangalore-560 004, Ph : 080-26617243, e-mail : [email protected]/O, 'ICAI Bhawan', Millers Tank Bed Area, Vasantnagar, Bangalore-560052, Karnataka

Tel : 080 - 3056 3500, Fax : 080 - 3056 3542, www.bangaloreicai.org e-mail : [email protected] Mudranalaya Pvt. Ltd.,

CA. Nithin Mahadevappa

RNI Regn. No. KARENG/2012/45348"Registered" News Letter for India vide KA/BGGPO/2523/2012-14 Date of Posting 4th & 5th of the month, Place of posting at G.P.O, Bangalore.

Total No. of Pages printed : 20

Extensive Workshop on An Insight of the Companies Bill - 2012

Inauguration Co-ordinatorCA. Ravi Prasad

CA. N. Nityananda CA. Ganesh Swaminathan Mr. J. Sundaresan Mr. M. R. Gopinath

Extensive Workshop on An Insight of the Companies Bill - 2012 Advanced Functions in MS Excel

Mr. Aditya Sondhi Mr. S. M. Pramod CA. Manohar Gupta Cross section of participants Cross section of participantsCA. Shiva Kumar H

Republic Day Celebrations

Flag Hoisting Felicitation of Hon' ble JusticeN. Venkatachala

Guest of HonorCA. Ranganath M.S.

Past Chairman, SIRC of ICAI

Chief Guest Hon' ble JusticeN. Venkatachala, Former Lokayukta,

GOK & Former Judge, Supreme Court of India

Seminar & Interactive Session on Consultative Paper on Review of Corporate Governance Norms in India

Shri. N.S. Sheshashayee Shri. B.N. Harish CA. Neeta Revankar CA. S. Sundaresan CA. V. Ramachandran Mr. Rajesh S Narang Mr. Sundharesan J.

Workshop on Service Tax Information System Security in CA’s Office

Shri HarishBindumadhavan

Shri R. DakshinaMurthy

CA. T.R. RajeshKumar

Ms. Jayashree CA. Nayaz Pasha CA. A. Saiprasad CA. S. P. Raju Cross section of participants

Speakers at Study Circle Meetings

CA. Vikas Bagaria CA. L. Vittal Rao CA. R.S. Pavan Kumar Mr. Vineeth Kumar T.S. CA. Krishna Prasad & CA. Amit Raj CA. Naveen Khariwal G CA. Prinut Shah

Cross section of participants