cc april 2012
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Internal news letterTRANSCRIPT
Consultants’ Corner
NCR Consultants Limited www.ncrcl.com
An Associate of
Finance Bill 2012
– was it a “Retrospective” exercise? Page. 04
Suresh CS
Volume 5 | Number 68 | April 2012 | Page 1– 12
Innovation Fortnight
Your participation solicited! Page. 03
3 Message from Dr. RSM
4 Finance Bill 2012 – was it a “Retrospective” exercise?
6 Risk and Insurance Management Consulting Services
7
Mystery Murder! Find out who is the victim and who is the Culprit - What a Awesome Coincidence!
8 What’s up at NCRCL?
9 An Exclusively Talk
10 Parichay
11 Knowledge Snippet
11 Birthday Greetings
11 Just for Laughs
11 Round Table
Inside
Our Mission is to apply our professional capabilities with a holistic approach for the happiness of clients,
through values and social commitment.
Finance Bill 2012 – was it a “Retrospective” exercise?
Basically, budget is an annual exercise that takes into account the year gone
by and plans for the financial year ahead. Lo! The budget presented by our FM
Pranab Mukherjee this year can be coined as a “Retrospective” budget with 24
retrospective amendments to various direct and indirect tax laws.
-read more...page 4
An Exclusively talk with Pradeep
Risk and Insurance Management Consulting Services
The expression “consulting services” defines services of an intellectual and advisory nature provided by consultants us-
ing their professional skills to study, design, ……. read more..page 6
Events of March
see more..page 8
see more..page 9
Parichay
Karnataka Institute of Public Auditors
see more..page 10
CC is another year old and it is that time of the year for CC to don a new look.
New Sections like 'Parichay' and 'Round Table' have been introduced and some of
your favourite sections have been given new names. CC is now published as an e-newsletter
which you can view online and perform tasks like clicking on hyperlinks, zooming, turning pages and so on.
Thanks to all who have contributed to the new look of CC.
As always the editors invite you to send in your feedback on the new CC. You can now send in your feedback to
our new email '[email protected]'.
P. S: You will need Adobe Flash Player to read the e-newsletter. Adobe Flash Player can be downloaded freely
from the web. If you have any difficulty in viewing the e-newsletter, please contact the editors.
CC has a new
look!!
3 4 5 6 7 8 1 2 12 11 9 10 Consultants’ Corner
This being the first week of the financial year 2012-13, we need
to take stock. Take stock of everything that is official, personal and
also that are common to all of us. One third of our life we all are
spending together and so we need to be very clear about what we
need to do the next year, which starts from this Sunday.
For the last three years, we have been working at various things,
we have treaded upon new areas with good success, we have
acquired new clients, we have got new set of youngsters who are
committed, we have upgraded our technology, the works of our
staff are getting published, we have made our values get noticed
by others, etc. But in terms of our overall performance we are still
in the same bracket. While the credit goes to all of you for having
consolidated various specialized works we do at NCRCL, I would
say that we have not taken off in a big way as we should have.
There are several reasons for the same; but I know one strong
reason for this: it is me. Yes, I feel that I might not have contributed
in areas which I should have.
When I look back, and take stock, I feel I am still part of delivery and quality control. I am not real time into strategy or
marketing. Though we need not do hardcore marketing for the type of work we are churning out, we need to increase the
visibility of NCRCL in industry and professional circles. For this I need to be sure and clear that all the works are being
handled correctly and professionally. This is important for us to go to the next level!
Going to the next level means so much: in thought, word and deed. We now need to think big, we need to speak big and
we need to act big; big not just quantitatively but qualitatively also. For this we need to establish our name in the market
visibly. We need to be seen, heard and felt more by the market. This requires a lot of creative approaches. Our size is
not an issue. A thirty-five member consultancy organization is definitely not tiny, it could be between small and medium.
Only innovation can help us to move to the next level.
In the next two weeks i.e. between 1st of April and 14th of April, we will have “Innovation Fortnight” (IF) so that there is no
ifs and but in our future! I expect from you creative ideas that will scale us up to the next level in a positive way without
compromising on our values or our work culture. The best ideas will be rewarded.
Wear your thinking cap! Awaiting innovative ideas from every one of you!
Going to the next level
- the Innovation Fortnight !!! Dr.R.S. Murali
A work of art is a gift, not a commodity.
Where there is no gift, there is no art.
-Lewis Hyde
The basic meaning of the word “Retrospective” as per
dictionary is:
“Looking back on, contemplating, or directed to the past;
Looking or directed backward.”
Basically, budget is an annual exercise that takes into
account the year gone by and plans for the financial year
ahead. Lo! The budget presented by our FM Pranab
Mukherjee this year can be coined as a “Retrospective”
budget with 24 retrospective amendments to various
direct and indirect tax laws. This is a record of sorts
when compared to 5 such amendments in the 2011
budget. Normally when such amendments are
introduced it relates back to a period of couple of years
at the maximum. How-
ever, this year, there are quite
a few which goes deep into
the past and some key ones
to periods as early as 1962
when the IT Act 1961 was
conceptualized for the first
time under the Republic
India.
This article highlights few of
the key retrospective ones
ventured by our FM this year:
1. Amendment to definition of “Commissioner”
The definition of “Commissioner” will also include
Director of Income-tax. This amendment will be
effective retrospectively from 1 April 1988.
2. Denial of exemptions to charitable organizations in
certain cases
An activity in the nature of trade, commerce or
business in the sphere of advancement of general
public utility carried out by a charitable organization
is not regarded as charitable purpose if the gross
receipts from such activities exceed INR 2.5 million
in that financial year. It is now clarified that such a
charitable organization will not be entitled to a tax
exemption in such financial year even if the
approval granted to the charitable organization is
not withdrawn. This amendment will be effective
retrospectively from 1 April 2009.
3. Presumptive tax regime for small businesses not
applicable to specified professionals and
businesses
Now, it is clarified that persons engaged in specified
professions or carrying out agency business or
earning income in the nature of commission or
brokerage will not be eligible to avail this
presumptive tax regime. This amendment will take
effect retrospectively from 1 April 2011.
4. 100% deduction for capital expenditure for
engaging in building and operating a hotel
Now, it is provided that the hotel owner will be
considered to have been carrying on specified
business, even if it transfers the operation of such
hotel to another person. This amendment will be
effective retrospectively from 1 April 2011.
5. Cost of acquisition in case of certain transfers
Presently, for the purpose of capital gains,
there is no reference with regard to the cost
to be taken for assets which are acquired
pursuant to succession of a sole proprietary
concern or firm in a company not regarded as
transfer. Now, in such cases, the cost of
acquisition of asset in the hands of the
company will be same as that in the hand of
the sole proprietary concern or the firm. This
amendment will be effective retrospectively
from 1 April 1999.
6. Taxation of transactions without consid-
eration or for inadequate consideration
Presently, any sum or property, the aggregate value
of which exceeds INR 50,000 in a year, received by
an individual or HUF without consideration is
taxable in the hands of the individual or HUF unless
it is received from a “relative” as defined under the
Income-tax Act. The definition of the term “relative”
has been amended to include members of the HUF.
This amendment will be effective retrospectively
from 1 October 2009.
7. Order in respect of assessee in default for
withholding tax.
Finance Bill 2012 – was it a “Retrospective” exercise?
-Suresh C S
3 4 5 6 7 8 1 2 12 11 9 10 Consultants’ Corner
Wisdom is a love affair with questions.
Knowledge is a love affair with answers.
-Julio Olalla
-cont‟d on next page
Time limit for passing order for deeming an
assessee to be in default of withholding tax from
payments to resident payees is increased from four
years to six years. This amendment will be effective
retrospectively from 1 April 2010.
8. Meaning assigned to a “term” used in Double
Taxation Avoidance Agreement
The Central Government is empowered to assign a
meaning to any “term” used in a DTAA by way of a
notification if such term has not been defined in the
DTAA or in the Income-tax Act. It is clarified that
such notified meaning of the term will relate back to
the date on which the DTAA came into force. This
amendment will be effective retrospectively from 1
October 2009.
9. Definition of intangible property
The term intangible property has been introduced to
include all kinds of:
Marketing, technology, artistic related intangible
assets;
Data processing, engineering, customer,
contract, human capital related intangible assets;
Location and goodwill related intangible assets;
Methods, programmes, systems, procedures,
forecasts, customer lists etc;
Any other similar item that derives its value from
its intellectual content rather than its physical
attributes.
The above amendment will be effective
retrospectively from 1 April 2002.
10. Examination of transactions not referred to Transfer
Pricing Officer
TPOs empowered to examine additional
international transactions (which were not formerly
referred by the Assessing Officer), if identified
subsequently in the course of proceedings before
him provided such international transactions were
not reported by the taxpayer. No reopening of any
proceedings would be undertaken only on account
of such amendment. This amendment will be
effective retrospectively from 1 June 2002.
11. Time limit for assessment in search cases referred
to Dispute Resolution Panel
The time limit for completion of assessment under
DRP provisions shall override the time limits
applicable for assessment in case of search and
seizure. This amendment will be effective
retrospectively from 1 October 2009.
12. Specific amendments to section 2(14), 2(47) and 9
keeping in mind the Historic Supreme Court
Judgment which turned out to be big blow to the
exchequer to the tune of Rs. 11,000 crores of tax
demand on Vodafone by IT department:
“Explanation- For the removal of doubts, it is hereby
clarified that „property‟ includes and shall be
deemed to have always included any rights in or in
relation to an Indian company, including rights of
management or control or any other rights
whatsoever” This amendment is to take care of the
loophole that “controlling interest” is not a Capital
Asset as per sec 2(14).
“Explanation 2: For the removal of doubts, it is
hereby clarified that “transfer” includes and shall be
deemed always to have included disposing of or
parting with an asset or any interest therein, or
creating any interest in any asset in any manner
whatsoever, directly or indirectly, absolutely or
conditionally, voluntarily or involuntarily, by way of
an agreement (whether entered into in India or
outside India) or otherwise, notwithstanding that
such transfer of rights has been characterized as
being effected or dependent upon or flowing from
the transfer of a share or shares of a company
incorporated outside India.” This amendment is to
take care of the loophole in definition of “transfer”
under section 2(47).
“Explanation 4: For the removal of doubts, it is
hereby clarified that the expression “through” shall
mean and include and shall be deemed to have
always meant and included “by means of”, “in
consequence of” or “by reason of”.”
“Explanation 5: For the removal of doubts, it is
hereby clarified that an asset or a capital asset
being any share or interest in a company or entity
registered or incorporated outside India shall be
deemed to be and shall always be deemed to have
been situated in India, if the share of the interest
derives, directly or indirectly, its value substantially
from the assets located in India.” Both these
explanations are being introduced to take care of
the loophole in definition of “transfer of an asset”
under section 9.
All the above amendments to sections 2(14), 2
(47) and 9 are with retrospective effect from 1
April 1962.
At this rate, a day is not far off when we can witness
a budget session in which our Finance Minister
decides to amend the definition of the term
“Retrospective” with retrospective effect!
3 4 5 6 7 8 1 2 12 11 9 10 Consultants’ Corner
Walk around feeling like a leaf. Know you
could tumble any second. Then decide what
to do with your time.
-Naomi Shihab Nye
The expression “consulting services” defines services of an intellectual and advisory nature provided by consultants
using their professional skills to study, design, and organize specific projects, advise clients, conduct training, and
transfer knowledge. Borrowers engage consultants principally for the following reasons:
Consultants offer Borrowers a more efficient allocation of resources by providing specialized services for limited
amounts of time without any obligation of permanent employment on the part of the Borrower.
Consultants, engaged for their superior knowledge, transfer skills and upgrade the knowledge base of their client
while executing the assignment. Knowledge transfer from consultants to the Borrower often forms an important part
of the assignment.
Consultants can offer independent advice to their client on the most suitable approaches, methodologies, and
solutions for their projects.
Consulting services in Insurance domain should satisfy the following requirements:
Meet the highest standards of quality and efficiency;
Be unbiased, that is, delivered by a consultant acting independently from any affiliation, economic or otherwise,
which may cause conflicts between the consultant‟s interests and those of the client; and
Be proposed, awarded, and executed according to the ethical principles of the consulting professions.
Types of Consulting Services currently used in Insurance Related projects may be grouped as follows:
Poorly handled insurance can have disastrous consequences, but few people who enjoy dealing with insurance issues or feel qualified to do so are Risk and Insurance Management Consultants. They provide clients with the expertise needed to make informed decisions about insurance-related problems. While acting as a consultant on an account, the person should avoid playing the role of an Insurance broker or captive agent.
Risk and Insurance Management Consulting Services
Pradeep Kumar
-cont‟d on next page
3 4 5 6 7 8 1 2 12 11 9 10 Consultants’ Corner
Project services
Preparation services Implementation services Advisory services
Sector studies
Master plans
Feasibility studies
Design studies
Tender documents
Procurement assistance
Construction supervision
Project management
Quality management
Commissioning
Policy and strategy
Reorganization/privatization
Institution building
Training/knowledge transfer
Management advice
Technical/operating advice
The Service Functions
Audit the client‟s risk exposures and insurance pro-
gram
Exposes uncovered risks and uncompetitive
Premiums. Recommends ways to reduce claims so that the cli-
ent can reduce costs. Determines when there are better solu-
tions than purchasing insurance
Service doesn't start when you have something to give - it blossoms naturally when you have nothing
left to take. -Nipun Mehta
He had no intention to murder her. Therefore, the killing
of Mr. Opus appeared to be an accident; that is,
assuming the gun had been accidentally loaded.
The continuing investigation turned up a witness who
saw the old couple‟s son loading the shotgun about 6
weeks prior to the fatal accident. It transpired that the old
lady had cut off her son‟s financial support and the son,
knowing the propensity of his father to use the shotgun
threateningly, loaded the gun with the expectation that
his father would shoot his mother.
Since the loader
of the gun was
aware of this, he
was guilty of the
murder even
though he didn‟t
actually pull the
trigger. The case
now becomes
one of murder on
the part of the son for the death of Ronald Opus.
Now for the exquisite twist…
Further investigation revealed that the son was, in fact,
Ronald Opus. He had become increasingly despondent
over the failure of his attempt to engineer his mother‟s
murder. This led him to jump off the 10 storey building on
March 23rd, only to be killed by a shotgun blast passing
through the ninth storey window. The son, Ronald Opus,
had actually murdered himself.
So the medical examiner closed the case as a suicide.
This is a true story from Associated Press.
At the 1994 Annual Awards dinner given for Forensic
Science(AAFS), President Dr. Don Harper Mills
astounded his audience with the legal complications of a
bizarre death.
Here is the story:
On March 23, 1994 the medical examiner viewed the
body of Ronald Opus and concluded that he died from a
shotgun wound to the head. Mr. Opus had jumped from
the top of a 10-storey building intending to commit
suicide. He left a note to the effect indicating his
despondency.
As he fell past the ninth floor, his jump was interrupted
by a shotgun blast passing through a window, which
killed him instantly. Neither the shooter nor the deceased
was aware that a safety net had been installed just below
the eighth floor level to protect some building workers
and that Ronald Opus would not have been able to com-
plete his suicide the way he had planned.
The room on the ninth floor, where the shotgun blast
emanated, was occupied by an elderly man and his wife.
They were arguing vigorously and he was threatening
her with a shotgun! The man was so upset that when he
pulled the trigger, he completely missed his wife and the
pellets went through the window, striking Mr. Opus.
When one intends to kill subject „A‟ but kills subject „B‟ in
the attempt, one is guilty of the murder of subject „B.‟
When confronted with the murder charge, the old man
and his wife were both adamant, and both said that they
thought the shotgun was not loaded. The old man said it
was a long- standing habit of his to threaten his wife with
the unloaded shotgun.
Lakshminarayanan M N
Mystery Murder! Find out
who is the victim and who is
the Culprit - What a Awe-
some Coincidence!
3 4 5 6 7 8 1 2 12 11 9 10 Consultants’ Corner
Most powerful is he who has himself in
his own power.
-Seneca
Prepare specifications for an insurance bidding Ensures that the client is provided the most desirable coverage
and that all insurers are providing quotations on the same basis
so that the client can make informed decisions
Analyze self-insurance options Determines which type of insurance program is advantageous
from a captive, pool, high deductible or other self-insurance pro-
gram
Analyze proposals and recommend the best pro-
gram
Frees the client of this time consuming, conflict ridden and mad-
deningly complex task
Review insurance programs for possible mergers
and acquisition
Determines if the insurance and risk management program of a
possible merger/acquisition target exposes the client to hidden
liabilities
What’s up at NCRCL?
Sandhya M H joins NCRCL®
Bangalore as Project Executive.
We extend a very warm welcome
to Sandhya!
3 4 5 6 7 8 1 2 12 11 9 10 Consultants’ Corner
If you're really mind-full, and if you underline that aspect of fullness, wholeness, or wholehearted-ness, it reveals the gift character of everything.
Welcome!!
Rekha Murali and Dr. R S Murali were invited as chief guests
for the inaugural and valedictory functions respectively of
“Concurrence”, an inter departmental academic meet at
Swami Vivekananda College on 15th & 20th March 2012.
Article by Ashok Rao and U. S Mohanty on 'XGRL:
XBRL for reporting in Government' is published in
The Chartered Accountant magazine March 2012
issue. See the full article at: http://www.ncrcl.com/
assets/264/XGRL-XBRL%20for%20Reporting%20in%
20Government_CA%20Journal_Mar%202012.pdf
Rekha Murali's views on 'Is the celebration of women's role
at workplace limited to women's day?' was published in an
article in The Hindu. See the full article at: http://
www. t hehi ndu. c om / today s - paper / t p - f ea tu r es / t p -
opportunities/article2968214.ece
"RSM And Kishore visited
Malaysia for valuation of a
palm oil plantation.
A fire fighting demo was conducted on
March 13, 2012 at our Chennai Office. An expert took the
employees through a detailed demonstration on various
types of fires caused and types of extinguishers used for
each type of fire. The employees were allowed to
individually douse the fire using the extinguishers.
An Exclusive Talk with Pradeep
Rajendran Pradeep Kumar B.Com (Bank Management). MLFSCM, Dip. BPR Working as Consultant Trainee Born on 9th April Email: [email protected] Mob No: +91 9500114478
CC. The meaning of your name.
Pradeep: 'Light, lantern; glory'.
CC. Nickname.
Pradeep: Pradi*
CC. Your dream job.
Pradeep: Risk Analyst
CC Your first impression of NCRCL.
Pradeep: Simple and organized work space and network.
CC. What personal/emotional characteristic of yours do you want to change?
Pradeep: Tendency to get carried away by others words.
CC. Money or job satisfaction?
Pradeep: Job satisfaction
CC. Your Stress buster.
Pradeep: Social networking
CC. Do you have a small circle of close friends, rather than a large number of friends?
Pradeep: Small circle
CC. What do you most like about a person?
Pradeep: Knowledge sharing
CC. What do you most hate in a person?
Pradeep: Corruption and not abiding laws
CC. Team work vs Individual work – your comments.
Pradeep: It depends on situations
CC. Do you make efforts to get others to laugh and smile?
Pradeep: Yes I Do
CC. Your heart rules your head or your head rules your heart?
Pradeep: Head rules my heart
CC. What kind of special talent you have?
Pradeep: Photography and video presentation
CC. What are your hobbies?
Pradeep: Blogging, travelling
3 4 5 6 7 8 1 2 12 11 9 10 Consultants’ Corner
What we need is more people who spe-
cialize in the impossible.
-Theodore Roethke
Parichay Know our Associates!
Karnataka Institute of Public Auditors
KIPA is an association of retired officers of Karnataka State Accounts Department formed in
2001-02. The Controller, State Accounts Department is the Chief Patron of the Institute. The mem-
bers of the institute have rich experience in the audit of government departments, local bodies &
autonomous institutions and in training the employees of government departments and local bodies.
KIPA has people with more than three decades experience in various government departments at
different levels.
KIPA specializes in the field of accounts and audit of government departments, local bodies, public
undertakings and other government organizations. KIPA has also advised government departments on
policy and administration matters. KIPA has executed a number of consulting assignments for The
Controller, State Accounts Department, Directorate of Municipal Administration, Expenditure
Reforms Commission, PWD and Finance Department, Government of Karnataka and Karnataka
State Pollution Control Board.
NCRCL® and KIPA have signed a Memorandum of Understanding to jointly undertake consultancy
assignments including research and training in the government sector. In this regard, a team from
NCRCL along with KIPA is now working on capacity building project for Taluk Panchayats in
Karnataka as well as preparation of finance and accounting manual, and audit manual for
Karnataka State Pollution Control Board.
Answer To last month’s Knowledge Snippet question: Which
company delivered the first ever Android phone and also the first ever 4G
phone?
Answer: HTC (High Tech Computer Corporation) First android phone –
HTC Dream First 4G phone – HTC sprint )
Ha Ha Ha !!!
Knowledge Snippet
The right answer was given by
R Bhavana
!!! Congratulations !!!
Happy Birthday!
Round Table
Topic of the month
What would be a change that you want to see immediately
implemented at NCRCL ?
Send you comments to [email protected]
Kishore D - 28th April
Lakshminarayanan M N - 21st April
R Pradeep Kumar - 9st April
Which is the river which carries maximum quantity of water
into the sea?
Send in your answers to the editor at [email protected]
3 4 5 6 7 8 1 2 12 11 9 10 Consultants Corner
We can chart our future clearly and wisely only when we know the path which has led to the present.
-Adlai E. Stevenson
A section to elicit readers‟ opinions on various matters!
For feedback
If you have any comment/suggestion for the editors, please write to
us at [email protected] Your views and comments on articles featured
here are also welcome!
CC wishes many happy returns of the day to the
April born.
Our Business Associates
NCR & Co
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Karnataka Institute of
Public Auditors www.mcmillanwoods.com
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