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www.vasai-icai.org DECEMBER 2012

VASAIBRANCH OF WIRC

NEWSLETTER

VASAIBRANCH OF WIRC

NEWSLETTER

VASAIBRANCH OF WIRC

NEWSLETTER

VASAIBRANCH OF WIRC

NEWSLETTER

The Institute of Chartered Accountants of India

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

PHOTO GALLERY

December 201202

MANAGING COMMITTEE

EDITORIAL BOARD

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

CA Haresh Mehta Committee Member | 9823137477

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

CPE Teleconference Programme On Point of Taxation Reverse Charge Dated on 23rd Nov. 2012

Diwali Get Together (Dated on 13th Nov. 2012 at Branch Premises)

CPT Mock Test Dated on 25th Nov. 2012

Singing Competition Comedy & Mimickry Contest of Soft Drink Group Dance

Glimpses at National Youth Festival Dated on 1st November 2012

Cricket Winner Team CA Ramanand Gupta, WICASA Chairman Vasai Branch Presenting Trophy to

Winner

FROM CHAIRPERSON’S DESKMy Dear Professional Colleagues,

It is the time when entire country is tinged in theWinter Season which is a preparatory season forthe Spring. Therefore, it is said, “if Winter comescan spring be far behind meaning?” the seasonwhich engages the whole world in a conspiracy oflove in the celebration of Christmas and New Year,with the Heartfelt Greetings and BountifulBlessings! May your Christmas sparkle withmoments of love, laught and is bright and beautiful,whatever means the most to you, whatever bringsyou happiness, these are the things we wish youand your family-Merry Christmas and may the yearahead be full of contentment & joy filled Happy NewYear.

My heartiest congratulation to Sachin Pilot onassuming the office of Minister of State forCorporate Affairs (I/C). We are sure thatAccountancy & Company Law Reforms process willcontinue to provide conducive environment for thegrowth of Corporate Sector with emphasis on selfregulation and good corporate governance, underthe dynamic leadership of new Minister.

We have successfully completed 7 years of ourbranch adding the succession that we are sure toremember it as events of pride in retrospect. Teamefforts are always recognized and we came acrossthe same by adding feathers to the glory byachieving the various awards which shall alwaysmotivate us to excel more. To celebrate oursuccessful journey of seven years we areorganizing annual day function & we request you tojoin in your very own Annual Day. Please be presentand make the Day a great success.

Our Vasai Branch has grown in stature movingalong from strength to strength. Starting out as anorganization of handful members, we now movedon to an association of around 1500+ CharteredAccountants. Member participation is a continuouschallenge to overcome, so we solicit yourassistance in providing updated records to help uspublish our Members Directory.

Forthcoming Programmes : We have series offorthcoming programmes in this month andrequest you to avail the benefit of all these events.

Seminar on Project Finance, Certificate Course onValuation, Certification course on ConcurrentAudit, ITAT Proceedings & Mock Tribunal, Seminaron Internal Audit & MEGA REGIONAL CONVENTIONON INTERNATIONAL TAXATION-2012. We are veryfortunate that our Regional Convention would behonoured by galaxy of speakers with extra-ordinary intelligence and experience. Theopportunity to listen to them should not be missedas this topic is one of its kind and conducted firsttime in our branch area. By gaining knowledge onsame we could explore new avenues for ourprofession.

We request our members to actively take part in theundertakings of the branch and show their supportby means of participation in all the events.

The power of human mind is indeed unlimitedin its potential. There are no limits, exceptthose we place on ourselves. So it is individualchoice or choices that determine how we wantto see the world, a particular situation or achallenge. It depends on how do weprogramme our minds.

Though no one can go back and make a brandnew start, one can start from now and make abrand new ending.

With warm regards,

CA Shweta Jain

Chairperson

The Institute of Chartered Accountants of India Vasai Branch of WIRC Newsletter03

December 2012


December 2012

FORTHCOMING PROGRAMMES FOR MEMBERS

Date Seminar on Timings Venue Speakers Co-ordinators Fees CPE

15th Dec. Video Profiling for CA 11.00 am Shanti Shopping - CA Ramanand Gupta Rs. 750/- -2012 to 1.00 pm Centre, Mira Road 9322231113

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

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

18th Dec Full Day Workshop 1.30 pm to ICAI Bhawan, Mr. Sachin Dedhia CA Shweta Jain Rs. 900/- 62012 on Information Technology 7.30 pm Baroda CA Himanshu Shah 9920737198 Reveived Upto

(Jointly with Baroda Branch) CA Pradeep Agarwal 14/12/20129327243479 thereafter

Rs. 1100/-21st & Members Regional 9.30 am GCC Club, See in detail CA Dinesh Gandhi Rs. 2750/- 1222nd Convention on International to 6.00 pm Mira Road (East) Programme Schedule 9821240303Dec., 2012 Taxation-2012 CA Shweta Jain

992073719822nd Vasai Branch 5.30 pm GCC Club, _ CA Ramanand Gupta Free –Dec., 2012 7th Annual Day Onwards Mira Road (East) 9322231113

CA Preeti Agrawal9320059238

28th to 30th Certificate Course 9.30 am GCC Club, Eminent Speaker CA Kishor Vaishnav Rs. 12500/- 36Dec, 2012 & on Concurrent Audit to 5.30 pm Mira Road (East) 98921943824th Jan to CA Nitesh Shah6th Jan, 2 982117015029th Dec., ITAT Proceedings 9.30 am GCC Club, CA Bhupendra Shah CA Ramanand Gupta Rs. 850/- for 62012 and Mock Tribunal to 5.30 pm Mira Road (East) Shri. I.P. Bansal 9322231113 members,

Shri. B. Ramakotaiah CA Lalit Munoyat Rs. 650/- for9820193508 CA students &

Rs. 950/- forothers

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

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

others

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

Co-ordinators CA Unmesh Narvekar-9821236179CA Mita Modi-9321901964CA Sandeep Jain - 9930608040

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

Date 15th & 16th December, 2012

Timing 9.30 am to 5.30 pm

Workshop on Project Finance

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

Topics Speakers

Perspective: FDI vs. others Eminent Speaker

Risk Allocation & Mitigation Dr. M. Venkateshwarlu

Sector Specific–Project Finance Ms. Binaifer Jehani

SME Listing CA Amar Kakariya

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

Topics SpeakersProject finance-Introduction CA Inderjeet Ghuliani and InnovationsTechnical collaboration : Eminent SpeakerAssesssement of riskFinancial modeling : Forecast Reality Eminent SpeakerDue Diligence: Essential Credit Issues Eminent Speaker

Programme Schedule

CPE-12 hrs

FORTHCOMING PROGRAMMES

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

FORTHCOMING PROGRAMME & SCHEDULE

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


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

Certificate Course on ValuationOrganized by

Corporate Law & Corporate Governance Committee

Hosted byVasai Branch of WIRC of ICAI

Organized by

Committee for Information Technology of ICAI

Hosted byBaroda Branch of WIRC of ICAI

Jointly with Vasai Branch of WIRC of ICAI

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

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

CPE-50 hrs

Date Topic

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

20th January, 2013 Effective use of excel spread sheet

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

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

Date Topic

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

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

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

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

Programme Schedule

For Registrations please contact022-65568900/9224781595

05The Institute of Chartered Accountants of India Vasai Branch of WIRC Newsletter December 2012

Topic Speaker

Ethical Hacking Mr. Sachin DedhiaCyber Crime Cases

Social Networking FraudsRecent Internet Banking Frauds

Cloud Computing CA Himanshu ShahUse of Briefcase

Blocking sites and firewallE-Documentation

Venue ICAI Bhawan Baroda

Date 18th December, 2012

Timing 1.30 pm to 7.30 pm

Fees Rs. 900/- received upto 14th Dec. 2012, thereafter Rs. 1100/-

Programme Director CA Atul Bheda9323323667

Co-Ordinators CA Shweta Jain, 9920737198CA Pradeep Agarwal, 9327243479

Full Day Workshop on Information TechnologyCPE-6 hrs


December 2012


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

CPE-12 hrs Members Regional Convention on International Taxation - 2012

Organized byWestern India Regional Council of ICAI


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

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

Programme Schedule

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

International Taxation

Technical Session-I

Principles and Provisions of International Taxation

Interpretation of Tax Treaties, Models and its Scope

Technical Session-II

Advance Ruling Procedure, Documentation and Recent Controversies

TDS Implications as per DTAA and Domestic Tax Laws

Technical Session - III

Mergers & Acquisitions : Cross Border Taxation

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

Technical Session - IV

Transfer Pricing : Introduction, Arms Length pricing & Documentation

Transfer Pricing: Recent Country Experiences and Developments

Transfer Pricing : Methods/Selection of Comparables

Special Session - I

Controversial Issues- International Taxation

Special Session-II

Motivational LectureCultural Evening 5.30 pm Onwards

Our Session Chairmen

Our Speakers

Convention Team

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

Mira Bhayandar Road, Mira Road (East) December 2012 Cheque/DD in favour of “Vasai Branch of WIRC”)

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

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

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

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

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

07


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

CPE-36 hrs

CPE-6 hrs

CPE-6 hrs

Certificate Course on Concurrent Audit of Banks

Program Schedule

Organized byInternal Audit Standards Board of the ICAI


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

Date 28th Dec. to 30th Dec. 2012 & 4th Jan to 6th Jan. 2013


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

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

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

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

For Registrations and 022-65568900/9224781595Details Please contact

Day Topics

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

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

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

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

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

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

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

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

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

January Effective Concurrent Audit Reporting6, 2013 Case Studies by Participants

Objective Assessment

ITAT Proceedings & Mock Tribunal

Program Schedule

Seminar on Internal Audit

Program Schedule

Venue GCC, Mira Road (E)Date Saturday, 29th Dec.2012

Time 9.30 am to 5.30 pm

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

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

Judges ITAT Members

Timings Topics Speakers9.30 am to 10.00 am Registration -10.00 am to 11.30 am Preparation of CA Bhupendra Shah

Appeal Papers/Ground ofAppeal and StayProceedings

11.30 am to 11.45 am Tea Break -11.45 am to 1.00 pm ITAT Rules CA Bhupendra Shah1.00 pm to 2.00 pm Lunch Break -2.00 pm to 5.30 pm Mock Tribunal Shri. I.P. Bansal

(Hon’ble Judicial Memberof ITAT)Shri. B. Ramakotaiah(Hon’ble Accounting Memberof ITAT)

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

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

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

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

Timings Topics Speakers9.30 am to 10.00 am Registration -

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

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

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

codifyingBest Practices

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

The Institute of Chartered Accountants of India Vasai Branch of WIRC NewsletterThe Institute of Chartered Accountants of India Vasai Branch of WIRC Newsletter0808

December 2012December 2012

RECENT CASE LAWS &OTHER DEVELOPMENTS / AMENDMENTS

— Complied bye-mail: [email protected] | 9869011148

1) Stamp Duty on Power of Attorney given tounrelated person constitutionally valid(Supreme Court) State of M.P. Vs. RakeshKohli & ANR. [Civil Appeal No. 684 of

2004], [Civil Appeal No. 1270 of 2004] (11/05/2012)Generally, where executant himself is unable, for any reason, toexecute the document, he would appoint his kith and kin as hisPower of Attorney to complete the transaction on his behalf. Ifone does not have any kith or kin who he can appoint as POA, hemay execute the conveyance himself. The legislative ideabehind Clause (d), Article 45 of Schedule 1-A is to curbtendency of transferring immovable properties through POAand inappropriate documentation.By making a provision like this, the State Government hassought to collect stamp duty on such indirect and inappropriatemode of transfer by providing that POA given to a person otherthan kith or kin, without consideration, authorizing such personto sell immovable property situated in Madhya Pradesh willattract stamp duty at 2 % on the market value of the propertywhich is subject matter of POA. In effect, by bringing in this law,the Madhya Pradesh State Legislature has sought to levy stampduty on such ostensible document, the real intention of which isthe transfer of immovable property. The classification, thus,cannot be said to be without any rationale. It has a direct nexusto the object of the 1899 Act. The conclusion of the High Court,therefore, that the impugned provision is arbitrary,unreasonable and irrational is unsustainable.

2) Regional Dir. ONGC Ltd. v. Association of Scientific &Technical Officers of the ONGC Ltd. (SC) (SPECIAL LEAVETO APPEAL (CIVIL) NOS. 29719-29720 OF 2010) (SLP (C) NOS.29855-29856 OF 2010) (Date of pronouncement 07/11/2012)‘No concession no perquisite’ is for employee and not foremployer for TDS Deduction :Scheme of the Act provides that after the employer deductsfrom the salary of the employee the tax and pays the same tothe Central Government, a TDS Certificate is furnished to theemployee and it is for the employee to claim before theAssessing Officer (AO) in the assessment proceedings and get adetermination done. In case he succeeds before the AO, he willbe entitled to refund out of the amount of TDS by the employer.The apex Court left it open to the employees concerned of theONGC to make their respective claims before the AO for thededuction made by the ONGC on 10% of the salary towards‘perquisite’ in respect of any concession given to the assessee.

1) CIT DELHI IV vs. GOYAL M.G.GASES P. LTD. (DELHI)(ITA No.58/2008) (PRONOUNCED ON: 19/10/2012)Penalty can not be deleted on transaction treated asshamWhether the ITAT was correct in law in deleting the penaltyignoring the material fact that the transaction was treated assham by ITAT as well as by the court (227 ITR 536) in thequantum proceedings?If the view is taken that a claim which is wholly untenable in lawand has absolutely no foundation on which it could be made, theassessee would not be liable to imposition of penalty, even if hewas not acting bonafide while making a claim of this nature,that would give a licence to unscrupulous assessees to make

— CA. Hemant R. Shah |

RECENT SUPREME COURT DECISIONS

RECENT HIGH COURT DECISIONS

wholly untenable and unsustainable claims without there beingany basis for making them, in the hope that their returns wouldnot be picked up for scrutiny and they would be assessed on thebasis of self Assessment U/s 143(1) and even if their case isselected for scrutiny, they can get away merely by paying thetax, which in any case, was payable by them. The consequencewould be that the persons who make claims of this nature,actuated by a malafide intention to evade tax otherwise payableby them would get away without paying the tax legally payableby them, if their cases are not picked up for scrutiny. This wouldtake away the deterrent effect, which these penalty provisionsin the Act have. The explanation given by the assessee for thedepreciation claim, was neither bonafide, nor substantiated.Therefore, the cancellation of penalty was unwarranted.

2) THE CIT VI Vs. VATIKA CONSTRUCTION PVT. LTD.(DELHI)(ITA 1246/2010) (Pronounced on:11/10/2012)No Penalty on voluntary admission of Assessee of taxing theincome @ 8%The assessee’s cash payments were admittedly not the amountwhich was disallowed; they had no co-relation to what could notbe established, and were disallowable. Further, the judicialrecord would show that when the AO decided to initiate penaltyproceeding, he had no material to conclude that the assesseehad concealed income or provided inaccurate particulars. Theassessee did provide particulars, but could not back up its claimwith confirmation; its explanation was that the payees insistedon immediate payment, to fulfill their contractual commitmentto their suppliers. The payees were small vendors, willing toensure supply of materials to the assessee’s site. Clearly, a casefor business expediency had been urged. Most importantly, thematerial which led to the penalty Order –i.e. absence of thepayees at their places or address provided, was gathered afterthe notice U/s 271(1)(c) was issued. The assessee complainedof this procedure, calling it unfair, as it ought to have beenprovided with opportunity in this regard during the assessmentand that material which did not exist at the time of initiation ofthe penalty proceeding ought not to have been put against it.The High Court has opined that the objection is well-founded,because the AO did not have the benefit of such material, andtherefore could not have, only on the basis of the assessee’soffer to be taxed at 8% on gross receipts, have concluded that ithad provided inaccurate particulars in its Returns. Moreover,the course of action suggested by the AO was in fact acceptedby the assessee, as reasonable. In these circumstances, theimposition of penalty was not justified. The Court thereforeopined that there is no infirmity in the impugned Order of theTribunal. The question of law is therefore answered against theRevenue, and in favour of the assessee; the appeal isaccordingly dismissed.

3) L.M. Patel & B.M. Patel (HUF) v. CIT (GUJARAT) (Date of Order:28/08/2012)Payment for relinquishment of fabricated tenancy rights could not be considered in computing capital gain:The Tribunal recorded that amount of Rs.15 00 000/- paid bythe assessee to the Bank can not be stated to be incurred whollyand exclusively for the purpose of the sale. The Tribunal furtherrecorded that the amount shown as compensation fortermination of tenancy rights is in fact not related to thetransaction of sale made by the assessee HUF. The entireamount of Rs.10322325/- was made by the Bank of Baroda(BOB) to the assessee on 09/06/1984 itself. It was noted thatthe BOB was already in possession of the property. TheCompany passed resolution only on 10/06/1984 to relinquishthe rights of tenancy by which time the assessee HUF had

already received the entire sale consideration from the Bank.Payment of Rs.1500,000/- was made much later after fullconsideration was received by the HUF. It was noted that in therent note dated 01/07/1978, there was no provision forsubletting the property, despite which, the Company hadcreated sublease in favour of the Bank. It was, therefore,concluded that payment of Rs.1500000/- made to the Companyby the assessee was only for reducing its tax liability and not forthe purpose of executing the transaction of sale.Section 48(1) of the Act provides for mode of computation anddeduction while charging capital gain. Clause-I thereof inparticular provides for a payment from the value ofconsideration received or accrued as a result of transfer ofcapital asset, expenditure incurred wholly and exclusively inconnection with such transfer. The Tribunal found that lookingto the peculiar facts of the case noted above, such expenditurecannot be stated to be incurred wholly and exclusively inconnection with such transfer. The Hon. Gujarat High Courtupheld the view taken by the Tribunal.

4) CIT v. Hindustan Times (HIGH COURT OF DELHI)(IT APPEAL NO.95 & 100 of 2011) (Date of Pronouncement:14/09/2012)Arrears of salary not covered U/s 43B of the Income Tax ActArrears of salary and other benefits payable to employees, arenot covered by Section 43B since these liabilities are notcontributions to provident fund, superannuation or any otherfund or plan which the employer is obliged to extend to itsemployees to fulfill its statutory or contractual obligations. Thecharacter of the amounts in this case is pure and simple arrearsof wages, which were directed to be paid as a result of wagerevision exercise mandated by an award. There is no doubt thatthe liability arose during the relevant year. However, the awarditself required payment in installments. It is not as if theassessee voluntarily deposited the amounts, when they werenot payable, or claimed it when no such liabilities existed as a matter of fact. Having regard to these facts, the Court is of theopinion that the Tribunal was justified in holding that theliabilities arising out of the Monesana Wage Board award werejustifiably deductible as expenditure, and not covered bySection 43B. As regards the other part of its order, the Tribunalitself did not grant relief in respect of contributions to ProvidentFunds, and allowed only such portions as were actually paid. Noother ground urged by the assessee was accepted. Therefore, the Court sees no reason to interfere with the order of the ITATon this aspect.

5) CIT vs. Usha International Ltd (Delhi High Court)Surrender via revised Return of Income (ROI) before issue offormal notice does not necessarily avoid penalty U/s 271(1)(c)The assessee filed a ROI claiming deduction U/s 35CCA for adonation made to another party. The Department hadinformation that the donation was bogus and so a survey wasconducted on the assessee’s premises. Pursuant to the survey,the assessee filed a revised return of income in which itwithdrew the claim for deduction and paid up the taxes thereon.The Assessing Officer (AO) imposed penalty U/s 271(1)(c) onthe ground that the revised return withdrawing the claim wasnot voluntary but was pursuant to the survey. The CIT (A) & theTribunal deleted the penalty on the ground that as the revisedReturn was filed before any concrete evidence was gathered bythe Income Tax authorities, the assessee was exonerated fromguilt. On appeal by the Department to the High Court, the Hon.Delhi High Court, reversed the Tribunal on the followinggrounds:The mere fact that a revised return was filed withdrawing aclaim or offering additional income before issue of a formal

09

(cont)...OTHER DEVELOPMENTS / AMENDMENTS

RECENT CASE LAWS &

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

notice by the AO does not necessarily mean that the return is voluntary. The filing of a revised return does not expatiate thecontumacious conduct, if any, on the part of the assessee in nothaving disclosed the true income in the original return. At the same time, it cannot be said that the revised return is of noconsequence at all. The original return cannot be considered inisolation without reference to the conduct of the assesseesubsequent to the filing of the original return. The questionwhether a revised return is “voluntary” or not has to be decidedin the light of the entire material brought on record and whetherthe revised return was filed when the assessee is cornered bythe evidence or material collected by the revenue authorities orbefore that stage. On facts, the revised return was filed by theassessee only when it was cornered and the income taxauthorities had collected material on the basis of which it couldbe said that the claim for deduction was false or bogus. Thefiling of the revised return is thus an act of despair and theassessee can gain nothing from it (Qammar-Ud-Din 129 ITR703 (Del), Sarvaria 158 ITR 803 (Del), Ramdas Pharmacy 77ITR 276 (Mad) & S.A.S. Pharmaceuticals 335 ITR 259 (Del)referred)

1) Gitanjali Ghate Vs. DCIT [ITAT, MUMBAI] ITA No.6560/Mum/2010 A.Y.2006-07(Date of pronouncement: 23/05/2012)No penalty, if assessee has not concealed any material fact orany factual information given not been found to be incorrect:While scrutinizing the Balance Sheet of the assessee, duringthe course of assessment proceedings, it was noticed by theAssessing Officer (AO) that the assessee has taken loan of Rs.357428/- from M/s Third Eye Qualitative Researchers P. Ltd. ofwhich she is a director having substantial interest. Accordingly,the said loan of Rs.357428/- was added as deemed dividendU/s 2(22)(e) of the I.T.Act. The AO sought explanation U/s271(1)(c) r.w. Explanation 1. The Assessee furnished detailed reply dt.06/03/2009. The explanation of the assessee wasrejected by AO who levied minimum penalty of Rs.120310/-.The Hon. ITAT observed after perusing the Orders of lowerAuthorities that it is not in dispute that the fact of the loan takenby the assessee from the company came within the knowledgeof AO from the Balance Sheet filed by the assessee whichmeans that the assessee has disclosed the fact of borrowing inher Balance Sheet. They further opined and stated that theyagree with the Counsel that assessee had no malafide intentionto conceal the fact. So long as assessee has not concealed anymaterial fact or any factual information given by her has notbeen found to be incorrect, the penalty U/s 271(1)(c) can not be imposed.

2) Income Tax Officer V/s Taru Leading Edge (P) Ltd.[ITAT DELHI] (22/05/2012)(ITA no.3592/Del/2011 – A.Y.2008-09)Amendment to Section 40(a)(ia) by the Finance Act,2010 is applicable retrospectively from 01/04/2005Hon’ble Calcutta High Court in their decision dt.23/11/2011(ITA no.302 of 2011 GA 3200/2011) in CIT Vs Virgin Creations,held that amendment to the provisions of Section 40(a)(ia) ofthe Act, by the Finance Act, 2010 as aforesaid wasretrospective from 01/04/2005. The ld. AR pointed out that thisis the sole decision rendered by a High Court at the moment onthe issue. Following the view in this decision, co-ordinate Benchin their decision dated 11/04/2012 in Piyush C. Mehta Vs. ACITno.1321/Mum/2009 for A.Y.2005-06 and the decisiondt.10/05/2012 in ITA no.717/Bang/2011for A.Y.2008-09 inACIT Vs. M.K.Gurumurthy also held that the aforesaidamendment is applicable retrospectively w.e.f. 01/04/2005.

RECENT TRIBUNAL DECISIONS

DIRECT TAX-

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

• ASSESSMENT IN CASE OF SEARCH OR REQUISITION –NOTICE U/S. 153A AND 153C – INSERTION OF RULE112F (210 TAXMAN 90 (ST.)The central government vide notification no. 42/2012 dated4/10/2012 in exercise of the power u/s 153A and 153C of the Income Tax Act, hereby gives Income Tax (14th Amendment)rules, 2012. It inserts new rule 112F. The rule came into effectfrom 1st July, 2012. The rule shall been inserted as under: -“Class or classes of cases in which the Assessing Officer shallnot be required to issue notice for assessment or reassessmentof the total income for six assessment years immediatelyproceeding the assessment years”.The Central Government notifies the situation were theAssessing Officer shall not be required to issue notices forassessment and reassessment of the total income for sixassessment years as provided in section 153A and 153C of theIncome Tax Act. It has been provided that where search u/s 132or requisition u/s 132A of the Income Tax Act is conducted or ismade, as case may be, in the territorial area of the assembly orparliamentary constituency in respect of which a notificationhas been issued u/s 30 read with section 56 of theRepresentation of the People Act (43 of 1951), or where theassets so seized or requisitioned in any manner to the ongoingelection in an assembly or Parliamentary constituency :The rule also provides that the provisions shall not be applicableto cases where search or requisition has taken place after thehours of poll so notified. It also further provides that this ruleshall not be applicable to cases where any assessment orreassessment has abated under the second proviso the Section153A and where any assessment or reassessment has abated u/s 153C.

• ACCOUNTING STANDARDS U/S 145(2) OF INCOME TAXACT (210 TAXMAN 91 (ST.) )Press release dated 26/10/2012:The Central Board of Direct Taxes (CBDT) constituted acommittee comprising of departmental officer andprofessionals in December, 2010 to inter alia suggest AS for thepurpose of notification u/s 145(2) of the Act. Section 145(2)provides that the Central Government may notify AccountingStandard (AS) for any class of assesses or for any class ofincome.The Committee submitted its first Interim Report in August,2011. A discussion paper containing the main recommendationof the committee was issued in October, 2011 for invitingcomments/suggestions from all stakeholders.The Committee has submitted its Final Report in August, 2012.The Committee recommended that the AS notified under theAct should be made applicable only to the computation oftaxable income and a taxpayer would not be required tomaintain books of account on the basis of AS notified under theAct. The Committee examined all the 31 AS issued by the ICAIand recommended notification of AS on 14 issues under the Actand formulated drafts of AS on these issues. The Committee hastermed them as “Tax Accounting Standards” (TAS) todistinguish from the AS issued by the ICAI/notified under theCompanies Act, 1956.The Final Report of the Committee (including draft of the 14 TASsubmitted by the committee) is uploaded on the FinanceMinistry website (www.finmin.nic.in) and income taxdepartment website (www.incometaxindia.gov.in) forcomments from stakeholder and general public.

LAWUPDATES

The comments and suggestions on the final report may besubmitted by 26th November, 2012 at the email addresses([email protected] or [email protected]) or by post at thefollowing address with “comments on Final Report ofAccounting Standards Committee” written on the envelope:Director (Tax Policy & Legislation) – IIICentral Board of Direct Taxes,Room NO. 147-G, North Block, New Delhi – 110001.

• CAPITAL GAINS ACCOUNT (FIRST AMENDMENT)SCHEME, 2012 (210 TAXMAN 94 (ST.)The central government vide notification no. 44/2012 dated25/10/2012 hereby amends the Capital Gains Account Scheme,1988. The scheme may be called Capital gains account (FirstAmendment) Scheme, 2012. It amends paragraphs 1, 2, 3, 4,10, 13 and Forms A, C & G of the scheme. The amendment is broadly made to incorporate the provisions of exemption u/s.54 GB of the income tax act which are applicable forAssessment Year 2013-14.The provisions of the section 54 GB have been introduced bythe Finance Act, 2012. Section 54 GB provides for an exemptionon capital gain on transfer of residential property in certaincases where net consideration is utilized for subscription in theequity shares of an eligible company.

• EXTENSION OF TIME LIMIT FOR FILING ITR. V FORMSFOR A.Y 2010-11 AND 2011-12 (210 TAXMAN 97 (ST.)The CBDT vide Notification No. 1/2012 under CPR scheme 2011dated 23/10/2012 extends the time limit for filing ITR. V formsrelating to income tax return filed electronically (without digitalsignature certificate) for A.Y. 2010-11 (filed during F.Y. 2011-12) and for A.Y. 2011-12 (filed on or after 1st, April 2011).These ITR – V forms can now be filed upto 31st December, 2012or within a period of 120 days from the date of uploading of theelectronic return data, whichever is later.This direction is issued to mitigate the hardship and grievanceof the taxpayers who have been prevented by reasonable causeto file the ITR-V in time.

• MOUNTING PENDENCY OF APPEALS BEFORE CsIT(A) &TARDY DISPOSAL BY CsIT(A) – PERFORMANCEAPPRAISAL OF CsIT(A) (210 TAXMAN 93 (ST.)The CBDT seriously concern about the mounting pendency ofappeals before CIT(A) and huge amounts disputed therein. TheCBDT made the analysis of disposal of appeals by CsIT for F.Y2011-12. It was seen that the average disposal of CIT(A) was312. About 99 CsIT(A) could not reach the average disposal of312. 64 CsIT(A) disposed of appeals in the range of 300-400and an equal number of CsIT (A) disposed of appeals in therange of 400-500. 14 CsIT(A) disposed of more than 500appeals and 3 of than disposed of more than 600 appeals in theyear.The CBDT, taking not of the situation decided that CCsIT mayhold quarterly, reviews in October 2012, January 2013 and April2013 to review the work of CsIT (A) functioning under them andbring the fact of shortfall in the disposals, lack of quality in theorders etc. to the notice of the officer(s) concerned with a copyto the Zonal Member.It has been further decided that the CCsIT while recording theAPAR should consider. Inter alia, the disposal of appeals fromthe perspective of the all India average number of appealsdisposed of. It is to be noted that while doing so the CCsIT shallgive due weightage to High Court Demand Appeals and theappeals related to transfer pricing in the ratios of 2:1 and 4:1 incomparison to other appeals.In case of CsIT(A) who have been transferred to other chargesduring the recent AGT, the disposal by them vis-a-vis thetargets fixed for them for the period they worked in that charge,may be communicated to the new Reporting Officer forincorporation in the APAR.


December 2012

RECENT LAW UPDATES

CA Abhishek Agrawal [email protected]

| e-mail:

We as Chartered Accountants consider ‘IT’ outside our domainexpertise of finance, audit and tax. But friends, can we survive in this ‘Information Age’ without being equipped with proper IT tools?

When we generally hear the word ‘IT’, the first things which comesto mind is that it is only for engineers. It is a myth that IT is only fortechnicians. In the IT industry, there are a lot of opportunities notonly for technicians and engineers, but also for functionalconsultants and business analysts.

There is a revolution taking place out there, it spans acrosscountries, businesses and organizations, and that revolution is inthe use of information as a tool to run businesses and to win overcompetitors. The need for information has always been there, butwith the abundance of data available everywhere, need foravailability of right and timely information could not beoveremphasized. It is being increasingly and widely recognizedthat the 21st century will be the century of Information Technology.

I am presenting here the emerging opportunities for CharteredAccountants in the field of IT in the Enterprise Resource Planning(ERP).

Overview of ERP :

Enterprise Resource Planning means software solution thataddresses the enterprise needs to take the process view of theorganization to meet the organizational goals tightly integrating allfunctions of an enterprise.

A more technical definition of an ERP system is an integratedsolution, sharing a centralized database with all internal users likeHuman Resources/Payroll/Benefits, e-procurement, Accounting,Budgets, etc. Data need only be entered or updated once, reducingerrors, time and labor for reports, analysis, and planning andprogram management.

The basic goal and idea behind ERP is customer-focused,dynamically balanced enterprise through asset optimization andreal-time transaction processing. Ultimately, time and resourcesare shifted to innovating, problem solving and direct service tocustomers.

Chartered Accountants (CAs) are playing a key role as functionalconsultants in providing these services.

Implementation: Fresh deployment of ERP packages. Methodologydiscussed later in detail.

Upgrades: Moving to new versions of ERP having new and improvedfunctionalities.

Support: Post-implementation maintenance of ERP. Most of theglobal support projects are 24 x 7 supports and highly customeroriented.

ERP Careers for Chartered Accountants

Testing: Verifying the behavior of the system in various businessscenarios in a test environment and includes integration testing.

Product Development: Product vendor companies like SAP andOracle continuously work on enhancing the functionalities of theproduct on the basis of feedback about new requirements from theconsulting companies and customers. It also includes localizationfeatures catering to local requirements of different countries. The updated versions of the products are released in the market aftersufficient testing.

Roles of CA’s :

To be a functional consultant, a candidate should have experiencein functional areas like human resources, financial management,sales and distribution or manufacturing. With the emergence of theERP functional consultant, established professionals such asChartered Accountants, Cost and Management Accountants andCompany Secretaries have also begun to invest considerable timeand money on ERP training. People with the right technical andfunctional background are very highly paid, and as a techno-functional consultant, it has bright career prospects.

CA’s have proved themselves in IT over a period of time and havebecome indispensable part in this industry. As a functionalconsultant, CA’s are continuously adding value in organizationswith the use of their expertise in finance.

Basically, a CA’s role is to study and understand the businessprocesses and financial structure and design the most appropriatesolution adhering to the regulations, compliances and reportingrequirement. As a business consultant, he studies an organization’scurrent business processes and matches them to thecorresponding processes in the ERP system, thus ‘configuring’ theERP system to the organization’s needs.

CA’s role spans throughout the lifecycle of implementation whichincludes stages like current business process study, solutiondesign, solution build, data migration, user training, Acceptancetesting, smooth transition and post-production support.

ERP as a Career :

Enterprise Resource Planning is the new wave for a challenging and

lucrative career in the high-tech industry. ERP is also a highly

remunerating career.

As accounting profession is getting complicated and sensitive, this

field gives you technical edge over others. It also improves the

overall business understanding of various industries and also

develops you for business consulting types of profiles.

Career in ERP is a truly global career because there is large demand

for ERP professionals all over the world and this scenario is

expected to increase as more and more companies are coming on

ERP.

In summary, a dream career is perhaps possible for all hard-

working individuals, but when it comes to success, there are no

short cuts. This is especially true in the highly vibrant ERP market.

1111

IT CORNER - ERP

11111 11The Institute of Chartered Accountants of India Vasai Branch of WIRC Newsletter December 2012

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

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

At GCC Club Mira Road.

Program Schedule

5.30pm to 6.00pm Welcome to invitees & Dignitaries

6.00pm to 7.00pm Musical Nights

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

121The Institute of Chartered Accountants of India Vasai Branch of WIRC Newsletter

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