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www.vasai-icai.org FEBRUARY 2013

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 NewsletterFebruary 201302

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 Lalit Bajaj CA Pramod Dhamankar CA Haresh Mehta CA Ashok Jain Past Chairman | 9867692321 Past Chairman |9987155522 Committee Member | 9823137477 WIRC Nominee

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

Glimpses at CERTIFICATE COURSESCertificate Course on Concurrent Audit of Bank

Held on 28th to 30th Dec. 2012 & 4th to 6th, 19th & 20th Jan. 2013

Certificate Course on Valuation Held on 16th Dec. 2012 to 3rd Feb. 2013OUR SPEAKERS

Group Photo Taken at Course in the presence of CA. Rajkumar Adukia (Chairman - Internal Audit Standard Board)

OUR SPEAKERS

CA. Pradeep Gupta (Co-ordinator) Presenting Memento to Mr. K. Rahman

also Seen CA. Shweta Jain (Chairperson)

Participants at Course

CA. Abhay Kamat

CA. Naresh Phanfat

CA. Uday Sathaye

CA. Nipun Singhvi

CA. Srinivasan

Mr. K V Lakum,

CA. Ramakrishnan Mani

Dr P. T. Giridharan,

Shri. O P Gupta

CA. Manish Baxi

CA. Manish Bansal

CA. Kuntal Shah

CA. Mrudul Gokhale

CA. Suriyanarayanan

CA. Rakesh Bhandari

CA. Niranjan Joshi

CA. V Gopalan

Mr. N M Rao

FROM CHAIRPERSON’S DESKMy Dear Professional Colleagues,The soote season, that bud and bloom forth brings,With green hath clad the hill and eke the vale:And thus I see among these pleasant thingsEach care decays, and yet my sorrow springs.

Spring and "springtime" refer to the season, andalso to ideas of rebirth, rejuvenation, renewal,resurrection, and re-growth.

The council has taken decision in the matterpertaining to holding of the triennial electionsto the Managing Committee(s) of theBranches of the Regional Councils for theperiod 2013-16,that The said elections bemandator i l y he ld under the S ing leTransferrable System of Voting at allbranches of the Regional Councils across thecountry .For our branch the election date willbe 9th March 2013. Notice of the election isattached with this newsletter and Nominationform and other detail is available at branchoffice and website.

At branch we always encourage sports and physicalfitness programmes which emphasize team spiritand determination. Apart from the regularprogrammes we had some very important eventstook place last month with keeping in mind theneeds and interests of various sections of membersand students, we had arranged Cricket tournamentat Virat Nagar Ground, Virar and Indoor Games. Inboth the events students participated in largenumbers. And same event is organizing for themembers also, we have planned grand cricketmatch among doctors, advocates, and Corporatorsin this month.

Vasai Branch celebrated The Republic Day by Flaghoisting and Drawing Competition in AdiwasiSchool wherein more than 300 students from STD.I to VII from the Gaothan Village participatedenthusiastically & showed their creativity &imagination powers on papers. Our happiness nonew bound seeing such a great creativity withinthem.

We hope extension of the CPE completion date byone month was enable to complete the requirementby choosing the kind of subjects relevant to them.In the series of certificate courses we haveorganize 136th Study Course on Audit of Co-operative Banks & Co-operative Societies on theabove occasion we are going to felicitate NewlyQualified CA also. We request our members toactively take part in the undertakings of the branchand show their support by means of participation inthe events.

Like every year this year also we have submittedyearly activity report to ICAI and WIRC and we arevery glad to inform you that we have beenn o m i n a t e d f o r H i g h l y C o m m e n d a b l ePerformance Certificate in large branchcategory from ICAI.

The preparation of “Members Directory” work hasstarted in full swing but still we have received veryfew forms, it is not possible to proceed with thisminimum numbers. So again we request to all themembers to send their updated data as soon aspossible.

It is an aspiration and dreams of all of us to have thebranch premises which will cater the needs of themembers and the student’s fraternity. We areplease to inform you that we have taken a concretestep towards our vision. Hoping soon, even we willbe blessed with our own premises.

At the end I would like to congratulate to those whoable to fix prefix before their name as CA. Iwelcome them in CA Pariwar. Also would like tocongratulate to those students who cleared theirIPCC exam. For them those who couldn’t make itout this time they should not lose hope, they shouldcome again and combat.

“Develop an attitude of gratitude, and givethanks for everything that happens to you,knowing that every step forward is a steptoward achieving something bigger andbetter than your current situation.”

? Brian Tracy

With warm regards,

CA Shweta JainChairperson

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

February 2013


February 2013

For Members

For Students

For Society

�During the year branch has got a chance to First Felicitation of CA Jaydeep Shah – President of ICAI after fetching theposition of President and also Felicitation of WIRC Office Bearer.

�During this year Branch has started hosting series of Certificate Courses for the benefit Members like ISA, IDT course,Valuation course, ConcurrentAudit course & course on audit of co-op soc. & banks, with positive number of Participants.

�We got an opportunity to host First Members Regional Convention on International Taxation in our Western Region withtremendous response and huge participation from throughout the region wherein the galaxy and highly expert persons ininternational taxation were guided on the technical subjects.

�The Branch conducted unique programs like Mock Tribunal wherin The dignitaries’ like Shri. I P Bansal & Shri. VivekVerma, Hon’ble Judicial Members of ITAT were graced the Seminar.

�With the great support and cooperation received from all of you This year Branch successfully generated 16727 CPEHours, with various seminars conducted for the benefit of Members.

�For the first time Branch has conducted jointly program with another branch and study circles, Workshop on InformationTechnology at Baroda and video profiling with Borivali study circle & J.B Nagar study circle for Members.

�Branch conducted two IRRC programs at Mauritius & Dubai and RRC at Saputara with overwhelming response.

�First Time Branch successfully hosted ICAI National Student Convention.

�787 Students successfully completed their ITT training,1260 Students successfully completed Orientation Course and491 Students successfully completed GMCS course during the years.

�This year Branch has started ICAI Coaching classes for CPT Students.

�Branch organized so many programs including various seminars, lectures, crash courses for CPT, IPCC and FinalStudents.

�Apart from technical subject Branch conducted Felicitation programs for Newly qualified CAs and Industrial Visit to boosttheir confidence level.

�In other side Branch emphasizes on Students’ talent in education by organizing the activities like School Level DebateCompetition & Quiz Elocution, Indoor & Outdoor games like as Cricket match, badminton etc, . also Video Profiling,Motivational Lecture, Youth Festival to encourage the students’ caliber in other activities.

�Branch has provided E-Library & Reading Room Facility for students.

�Branch organized Mega Blood donations Camp jointly with Lions Club during the year where in Free Eye check up wasconducted for the benefit of People with the help of efficient medical facilities also Free Eyes Spectacles distributedamong the people who visited the Free Eye Check up Campaign.

�Free Distribution of Books among the children’s ofAadivasi School on 26th January, 2012.

�Sweets Distributions among the school children’s ofAadivasi School on 15thAugust, 2012.

�Many Investor Awareness Programs and Union Budget Meetings held during the year to create awareness among thesociety at large.

�Branch conducted Career Counseling for the image building of our profession and create career awareness among theStudents with the help of efficient faculty.

�Branch has participated in Mega Career Fair which was organized by Sanjeevani Foundation (Trust) where inMr. Sanjeev Naik-MP, Mr. Ganesh Naik-MP & Other Corporators were present for guidance of the student’s.

Highlights of the done during the year 2012MAJOR ACTIVIT IESBY VASAI BRANCH FOR MEMBERS, STUDENTS & SOCIETY

CPE Generation During January 2012 to December 2012

3880(Approx)

5634(Approx)

10027(Approx)

Years

Appeal to All the Members of Vasai Branch of WIRC

�Members Directory Form

As you aware that Vasai branch is under the process of member’s directory for which we have sent membersdirectory form also in last month newsletter and email. But Till the Date we have received very few forms only, itis very difficult to proceed with this least numbers. So again we are requesting you to submit your updateddata as soon as possible in proper format which is available on our website www.vasai-icai.org. you can sendyour data through Email at [email protected] /Contact: 022-65568900

Kindly ignored if you already sent

The Institute of Chartered Accountants of India Vasai Branch of WIRC Newsletter February 201305


February 2013

FORTHCOMING PROGRAMMES

Venue GCC Club, Mira Bhayandar Road,Mira Road (East)

Time 9.30 a.m. to 5.30 p.m.

Date 9th & 10th Febuary 2013

Fees Fees-1800/- (inclusive of course material,breakfast & lunch)

Course Chairman CA Durgesh Kabra, Chairman - WIRCCourse Director CA Shweta Jain, Chairperson - Vasai BranchCo-Ordinator CA Unmesh Narvekar-9821236179

CA Ramanand Gupta-9322231113

136th Study Course on Audit of Co-operative Banks & Co-operative Societies Organized by

Western India Regional Council of ICAIHosted by

Vasai Branch of WIRC of ICAI

Saturday, 9th February, 2013

Topic Speaker

Common Accounting System for CA. D. A. Chougule Primary Agricultural Societies

Introduction to principles of Co-operation, CA. Ramesh PrabhuTypes of Societies, Registration Procedure, Law & Management of Co-operativeSocieties

Accounting Standards as applicable to CA. Abhay KamatCo-operative Societies & Co-operativeBanks

Sunday, 10th February, 2013Topic Speaker

Various records, registers and documents CA. Mohan Sanzgirito be maintained by the Co-operativeBanks and Societies and duties andresponsibilities of the directors and officersEnquiries u/s 83 and 88 of MCS Act 1960 CA. B. B. ManeAdvances including NPA Requirement CA. Ramakrishnan& Income Recognition norms, provisioning ManiDirect taxes – Taxation of Co-operative Eminent SpeakerSocieties including deduction u/s 80P & concept of Mutuality, provisions ofTDS and Sections 269 SS and 269TIndirect Taxes– As applicable to Eminent SpeakerCo-operative Societies & Banks

FORTHCOMING PROGRAMMES OF BHAYANDAR STUDY CIRCLE

Date Seminar on Timings Venue Speakers Co-ordinators Fees CPE

17th Feb 2013 Seminar on Taxation on Builders 10.00 am to Hotel Sankalp Eminent Speaker CA Deepak Bansal 9320981019 For Member Free 3hrsAnd Developer 1.00 pm (Now ZAIKA), other Rs.200/-

1st Floor, NearMaxus Mall,Bhayander West,

17th March Seminar on BUDGET 10.00 am to Hotel Sankalp Eminent Speaker CA Deepak Bansal 9320981019 For Member Free 3hrs2013 Co-Operative Housing Society 1.00 pm (Now ZAIKA), other Rs.200/-

1st Floor, NearMaxus Mall,Bhayander West,

FORTHCOMING PROGRAMMES OF VASAI-VIRAR STUDY CIRCLE


1st to 3rd Residential Refresher Course - Silent Resort at Eminent Speaker CA Rajesh Kotak 9561330333 For Member 9hrsMarch, 2013 Manor CA Aniket Padhye 9922063800 Rs.5,500/-- &

others Rs.6,500/-

FORTHCOMING PROGRAMMES FOR MEMBERS


9th & 10th 136th Study Course on Audit of 9.30 am to Green Court Club, CA Abhay Kamat CA Unmesh Narvekar Rs. 1800/- 12HrsFeb 2013 Co-operative Banks & 5.30 pm Mira Road (East) CA D. A. Choughle 9821236179

Co-operative Societies CA Ramesh Prabhu CA Ramanand GuptaCA Mohan Sanzgiri 9322231113CA B. B. ManeCA Ramakrishnan Mani

10th Feb 2013 Newly Qualified CA Felicitation 6.00 pm to Green Court Club, CA Unmesh Narvekar Free _Programme 8.00 pm Mira Road (East) 9821236179

CA Ramanand Gupta9322231113

17th Feb 2013 Cricket Match with various 8.30 am to Mira Road Municipal CA Ramanand Gupta Free _Association 5.30 pm Ground, Mira Road 9322231113

(East). CA Unmesh Narvekar9821236179

2nd March Public Meeting on Union Budget 5.30 pm to Indravarun Hall, Eminent Speaker CA Unmesh Narvekar Free 3 Hrs2013 Analysis 8.30 pm Jesal Park, 9821236179

Bhayandar (East)

23rd March Seminar on Statutory Bank 9.30 am to Green Court Club, Eminent Speaker CA Ramanand Gupta Rs.850/ 6 Hrs2013 Branch Audit 5.30 pm Mira Road (East) 9322231113

CA Kishor Vaishnav9892194382

CPE-12 hrs

Law UPDATES

search is conducted u/s. 132 or requisition made u/s.132A and cash or other assets are seized during theelection period, generally on a single warrant, and noevidence is available, or investigation required, forany assessment year other than the assessment yearrelevant to the previous year in which search isconducted or requisition is made.

The Central Government vide Circular No. 10/2012dated 31/12/2012 clarifies that in such cases, theofficer investigating the case, with the approval of thedirector general of income tax shall certify that -

i. the search is conducted under section 132 or therequisition is made under section 132Aof theAct in theterritorial area of an assembly or parliamentaryconstituency in respect of which a notification hasbeen issued under section 30, read with section 56 ofthe Representation of the PeopleAct, 1951; or

ii. The assets seized or requisitioned are connected inany manner to the ongoing election process is anassembly or parliamentary constituency; and

iii. No evidence is available or investigation is required forany assessment year other than the assessment yearrelevant to the previous year in which search isconducted or requisition is made.The certificate of the investigating officer is requiring tobe communicated to the Commissioner of the IncomeTax and the Assessing Officer having jurisdiction overthe case of such person.

�TDS – no deduction in certain cases – specifiedpayments u/s. 197A (1F) (212 Taxman (st.) 12)

The Central Government vide Notification No.56/2012 dated 31/12/2012 notifies that no deductionof tax under chapter XVII of the Income Tax Act shallbe made on the payments of the nature specifiedbelow, in case such payment is made by person to abank listed in the second schedule to the ReserveBank of India Act, excluding of Foreign Bank. Thisnotification came into effect from 1/01/2013.

i. Bank guarantee commission;ii. Cash management service charges;iii. Depository charges on maintenance of DEMAT

accounts;iv. Charges for warehousing services for commodities;v. Underwriting service charges;vi. Clearing charges (MICR charges);vii. Credit card or debit card commission for transaction

between the merchant establishment and acquirerbank.

DIRECT TAXES - Law Update− Compiled by Haresh P. Keniaemail : [email protected]

�Instruction regarding e-payment of ITAT fees (212 Taxman (st.) 1)

The office order (F.NO. 19 – AD (ATD)/2012) dated13/12/2012 intimates to the Advocates/CharteredAccountant/Authorized Representative and Assessesthat in case of e-payment of tribunal fees the respectivechallans are to be counter signed by the concern BankManager or attested by theAuthorized Representatives orAssessee themselves. It is also intimated that, in case ofnon-compliance of this instruction the remittent of tribunalfees will not be treated as valid.

�Agreement with foreign countries or specifiedterritories - Notified “ specified territory” (212Taxman (st.) 1)

The Central Government by notification no. 54/2012dated 17/12/2012 notifies Sint Maarten, a part ofkingdom of Netherlands, the area outside India as thespecified territory for the purpose of section 90 of theIncome TaxAct – explanation 2.

�FAQ by Qualified Foreign Investors (QFIs) (212Taxman (st.) 2)

The press release dated 26/12/2012 gives FAQsprepared with a view to help QFI applicants to getgeneric understanding of the tax framework. It alsostates that these FAQs cannot be used in a court oflaw to interpret any circular, rules, regulations,statutes etc., one way or the other.

The FAQs are in relation to obtaining of PAN card, taxrelated responsibilities, general clarifications,withholding tax liabilities etc.

�Search & Seizure -Assessment of preceding yearsin search cases during election period. (212Taxman (st.) 11)

The Central Government, vide Finance Act, 2012inserted new rule 112F specifying the class of cases inwhich AO shall not be required to issue notice forassessing or reassessing the total income for 6assessment years.

The aforesaid amendment was introduced with a viewto reduce infructuous and unnecessary proceedingsunder the Income Tax Act, 1961 in cases where a


February 2013

RECENT CASE LAWS &OTHER DEVELOPMENTS / AMENDMENTS

�Capital gains accounts scheme 1988 – notifieddeposit office to receive deposits and maintainaccounts under the said scheme (212 Taxman (st.)12)

The Central Government vide Notification No. GSR859(E) dated 30/11/2012 authorise all the branches(except rural branches) of IDBI bank Ltd., to receivedeposits and maintain accounts under the CapitalGains Accounts Scheme. This notification is incontinuation of the earlier Notification No. GSR 725(E)dated 22/06/1988 and in pursuance of clause (e) ofpara 2 of the Capital GainsAccounts Scheme 1988.

The rural branch for the purpose of this notification, inrelation to the IDBI Bank Ltd. would mean a branchwhich is situated and its functioning at a centre, thepopulation where of, in accordance with the 2001census is less than Ten Thousand.

�Extension of time limit for filing ITR -V forms forassessment years 2010-11, 2011-12 & 2012-13 (212Taxman (st.) 13)

The Director General of Income Tax (system) videNotification No. 1/2013 dated 07/01/2013 extents thetime limit for filing ITR – V forms relating income taxreturns filed electronically (without digital signaturecertificate) for A.Y. 2010-11 (filed during F.Y. 2011-12)and for ITRs of A.Y. 2011-12 (filed on or after01/04/2011) till 28th February, 2013. In respect ofreturns filed forA.Y. 2012-13 for which ITR-V forms areyet to be received at CPC and time of 120 days hasalso elapsed, time limit for filing of ITR – V is extendedupto 31st March, 2013 or 120 days from the date ofuploading of the electronic return data, whichever islater.

�Section 255 of income tax act, 1961 – procedure ofappellate tribunal – practice note for hearingappeals & appl icat ions f ixed before ITATAllahabad Bench – Allahabad {212 Taxman 16(st.)} ITAT practice note, dated 01/01/2013.The appeals and applications fixed before the ITAT,Allahabad Bench will be heard through VideoConferencing by the members of the ITAT sitting atITAT, Delhi Bench, Delhi. The President, ITAT willnominate from time to time the Members hearing thecases through Video Conferencing system. Thissystem of hearing through Video Conferencing will bereferred to as ‘E-courts’. For the purposes of ‘E-courts’, detailed regulations alongwith Do’s, Don’tsand Forms for use under these regulations are framedand is available at above citation.

— Complied bye-mail: [email protected] |

9869011148

RECENT SUPREME COURT DECISIONS1) CIT vs. Raunaq Education

Foundation (Supreme Court)Payment by post-dated cheque relates

back to date of handing over of chequeIn the year ended 31/03/2002, the assessee, aCharitable Trust eligible for exemption U/s 11, received apost-dated cheque dated 22/04/2002 from Apollo TyresLtd. for which it issued a receipt. The AO held that thepost-dated cheque had been accepted by the assesseeto do undue favour to Apollo Tyres, whose directors werethe trustees of the assessee and that there was aviolation of section 13(2)(d)(h), and that section 11exemption had to be denied.This was reversed by the Tribunal and the High Court onthe ground that as the post- dated cheque was givenbefore 31/03/2002 and was duly honoured in April, 2002when it was presented before the bank, the date ofpayment of the cheque should be treated as the date onwhich the cheque was received by the assessee. Onappeal by the Department to the Supreme Court, theApex Court dismissed the appeal by the Revenue on thefollowing grounds:Though the assessee Trust issued a receipt in March,2002 when it received the cheque dated 22/04/2002, itwas clearly stated in its record that the amount ofdonation was receivable in future and it was shown asdonation receivable in the Balance Sheet as on31/03/2002. Also Apollo Tyres Ltd. did not avail anyadvantage of the said donation during the F.Y.2001-2002. When a post-dated cheque is issued, it will have tobe presumed that the amount was paid on the date onwhich the cheque was given to the assessee and,therefore, it cannot be said that any undue favour wasdone by the assessee to Apollo Tyres Ltd. A cheque,unless dishonoured, is payment (Ogale Glass Works25 ITR 529 (SC) followed)

2) ACIT v. M/S A.R.ENTERPRISES (Supreme Court)(14/01/2013)CIVIL APPELLATE JURISDICTION (CIVIL APPEAL NOs.2688, 3127 & 3848 OF 2006, 2580 of 2010, 270 & 271 of2013)Section 158B-Payment of Advance Tax /TDS cannottantamount to disclosure of total income:After the search was conducted on 23/02/2006, it wasfound that for A.Y.1995-96, the respondent-assesseehad not filed its Return of Income by the due date. It isonly when block assessment proceedings were initiatedby the Assessing Officer (AO), that the assessee filedits Return for A.Y.1995-96 on 11/07/1996 U/s 158BCof the Act, showing its total income as Rs.702768/-.The assessee claimed, that since Advance Tax had beenpaid in three installments, it could not have been saidthat the income had not been disclosed or that there wasno intention to disclose income. We have already heldthat the payment of Advance Tax, which is based uponestimated income, cannot tantamount to the disclosureof the total income, which must be declared in theReturn. The fact that the assessee had not filed itsReturn of Income by the due date, the AO was correctin assuming that the assessee would not have discl-osed its total income.

CA. Hemant R. Shah |


February 2013

Law UPDATES

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


3) Vodafone International Holdings B.V. vs. UOI(Supreme Court)Transfer of shares of foreign company by non-resident to non-resident does not attract Indiantax even if object is to acquire Indian assets held by the foreign companyA Cayman Island company called CGP Investments held52% of the share capital of Hutchison Essar Ltd., anIndian company engaged in the mobile telecom businessin India. The shares of CGP Investments were in turnheld by another Cayman Island company calledHutchison Telecommunications. The assessee, a Dutchcompany, acquired from the second Cayman Islandscompany, the shares in CGP Investments for a totalconsideration of US $ 11.08 billion. The AO issued ashow-cause notice U/s 201 in which he took the viewthat as the ultimate asset acquired by the assessee wereshares in an Indian company, the assessee ought to havededucted tax at source U/s 195 while making payment tothe vendor. This notice was challenged by a Writ Petitionbut was dismissed by the Bombay High Court. In appeal,the Supreme Court remanded the matter to the AO tofirst pass a preliminary Order of jurisdiction which theAO did. This order was challenged by the assessee by aWrit Petition which was dismissed by the High Court [329ITR 126 (Bom)]. On appeal by the assessee, the ApexCourt allowed the appeal in favour of the assessee.RECENT HIGH COURT DECISIONS

1) CIT vs. N. R. Portfolio Pvt. Ltd (Delhi High Court)Section 68: Despite PAN & Bank details, additionof share allotment money valid if applicants do notrespond to summons :The assessee, a company, received Rs.35 lacs towardsshare allotment money. As the shareholders did notrespond to summons, the AO assessed the said sum asan unexplained credit U/s 68. On appeal, the CIT(A) andthe Tribunal relied on Lovely Exports 216 CTR 195(Del) & Divine Leasing 299 ITR 268 (SC) and held thatas the assessee had furnished the PAN, bank details andother particulars of the share applicants, it haddischarged the onus of proving the identity and credit-worthiness of the investors and that the transactionswere not bogus. It was also held that the AO ought tohave made enquiries to establish that the investors hadgiven accommodation entries to the assessee and thatthe money received from them was the assessee’s ownundisclosed income. On Appeal by the Department tothe High Court, the Delhi High Court reversed the CIT(A)& Tribunal and held as above on the following grounds:Though in previous decisions (Lovely Exports) it washeld that the assessee cannot be faulted if the shareapplicants do not respond to summons and that theRevenue Authorities have the wherewithal to compelanyone to attend legal proceedings, this is merely oneaspect. An assessee’s duty to establish the source of thefunds does not cease by merely furnishing the names,addresses and PAN particulars, or relying on entries inthe Registrar of Companies website. The company isusually a private one and the share applicants are knownto it since the shares are issued on private placementbasis. If the assessee has access to the share applicant’sPAN or bank account statement, the relationship iscloser than arm’s length. Its request to such concerns toparticipate in income tax proceedings, would, from apragmatic perspective, be quite strong. Also, theconcept of “shifting onus” does not mean that oncecertain facts are provided, the assessee’s duties areover. If on verification, the AO cannot contact the shareapplicants, or the information becomes unverifiable, the

onus shifts back to the assessee. At that stage, if itfalters, the consequence may well be an addition U/s 68(A. Govindarajulu Mudaliar 34 ITR 807 followed).Contrast with Value Capital Services (Delhi High Court)

2) CIT vs. Orient Craft Ltd. (Delhi High Court)Intimation U/s 143(1) cannot be reopened U/s147 without “fresh material”The assessee filed a Return of Income (ROI) in which itclaimed a deduction U/s 80HHC of Rs. 13.35 crores. TheAO accepted the ROI U/s 143(1). He, thereafter,reopened the assessment U/s 147 on the ground thatthe sale proceeds of the quota was wrongly consideredas export turnover and that it was business profits and90% thereof had to be reduced U/s 80HHC. Theassessee challenged the reopening on the ground that asthere was no “fresh material”, the AO had no jurisdictionto reopen the Intimation U/s 143(1). This was upheld bythe Tribunal by relying on Kelvinator of India 320 ITR561 (SC). On appeal by the Department, the Hon. DelhiHigh Court dismissed the appeal on following grounds:Section 147 permits an assessment to be reopened ifthere is “reason to believe”. It makes no distinctionbetween an Order U/s 143(3) or an Intimation U/s143(1). Accordingly, it is not permissible to adoptdifferent standards while interpreting the words “reasonto believe” vis-à-vis Section 143(1) and Section 143(3).The Department’s argument that the same rigorousstandards which are applicable in the interpretation ofthe expression when it is applied to the reopening ofassessment U/s 143(3) cannot apply to the IntimationU/s 143(1), is not acceptable because it would place anassessee, whose return is processed U/s 143(1), in amore vulnerable position than an assessee, in whosecase us subjected to a full-fledged scrutiny assessmentU/s 143(3). Whether the Return is put to scrutiny or isaccepted without demur is not a matter which is within the control of assessee. An interpretation which makes adistinction between the meaning and content of theexpression “reason to believe” between a case where theassessment U/s 143(3) is made and one where anIntimation U/s 143(1) is made may lead to unintendedmischief, be discriminatory & lead to absurd results. InKelvinator 320 ITR 561 (SC) it was held that the term“reason to believe” means that there is “tangiblematerial” and not merely a “change of opinion” and thisprinciple will apply even to Intimation U/s 143(1). Onfacts, the AO reached the belief that there wasescapement of income “on going through the ROI” filedby the assessee. This is nothing but a review of theearlier proceedings and an abuse of power by the AO.There is no whisper in the reasons recorded of anytangible material which came to the possession of the AOsubsequent to the issue of the Intimation. It reflects anarbitrary exercise of the power conferred U/s 147(Rajesh Jhaveri Stock Brokers 291 ITR 500 (SC)distinguished)

3) CIT vs. Sania Mirza (Andhra Pradesh High Court)Penalty U/s 271(1)(c) cannot be levied if incomenot offered to tax due to “bona fide mistake”The assessee, a renowned professional internationalTennis player, received an award of Rs.30 lacs. This wasdisclosed in the statement of affairs filed with the Returnof Income (ROI) though not offered to tax. The AOaccepted the ROI U/s 143(1). He later reopened theassessment U/s 147 at which stage the assessee offeredthe said amount to tax. The AO & CIT levied penalty U/s271(1)(c) on the ground that the assessee had furnishedinaccurate particulars of her income and concealed herincome. However, the Tribunal cancelled the penalty onthe ground that a “bona fide mistake” had been made on

09February 2013


February 2013


Motivational QUOTES

her behalf by her Advocate/CA and there was noconcealment of income nor a furnishing of inaccurateparticulars. On appeal by the Department to the HighCourt, the Andhra Pradesh High Court dismissed theappeal on the following grounds:There is nothing to suggest that the assessee acted in amanner such as to lead to the conclusion that she hadconcealed the particulars of her income or had furnishedinaccurate particulars of income. As the amount ofRs.30,63 lacs was shown by her in the ROI, it cannot besaid that there was any concealment. As the amount wascorrectly mentioned, there is also nothing inaccurate inthe particulars furnished by her. The only error thatseems to have been committed was that it was notshown as a capital (sic) receipt. But as soon as this waspointed out, the error was accepted and the amount wassurrendered to tax and therefore this is not a fit case forimposition of penalty.RECENT TRIBUNAL DECISIONS

1) Syed Aslam Hashmi v. ITO [2012] 26taxmann.com 6 (Bangalore Tribunal)Unless Section 195(2) clearance is obtained, tax has tobe deducted from sales consideration and not just fromcapital gains:The assessee purchased a residential flat from a NRI(seller). The Assessing Officer (AO) noted that U/s 195,the assessee ought to have deducted tax on the saleconsideration before making payment to the seller.However, the assessee contended that he was liable topay the tax on the basis of capital gains. Rejectingassessee's contentions, AO initiated proceedings U/s201(1), treating the assessee to be an assessee-in-default. The CIT (A) upheld the Order of the AO. Onappeal, the Tribunal held in favour of Revenue on thefollowing grounds:Section 195(1) requires the assessee to deduct tax onentire sale consideration. If the assessee consideredotherwise, section 195(2) requires him to make anapplication to the AO to determine the appropriateproportion of consideration on which tax should bededucted, but the assessee failed to do so. Thus, thefinding of AO that quantification of the TDS U/s 195ought to be made on the entire sale consideration wascorrect and it couldn't be made on the basis of capitalgains. Therefore, it was held that AO had rightly raiseddemand U/s 201.

2) Modern Info Technology Pvt. Ltd. Vs ITO (ITATDELHI)(ITA No: 4294/Del/2012) (A.Y.2009-10)Disallowance U/s 14A cannot be made if the assesseehas not incurred & claimed any expenditure against theexempt incomeFor making any disallowance U/s 14A, one has to firstexamine the assessee’s claim of having incurred someexpenditure or no expenditure in relation to exemptincome. If the AO gets satisfied with the same then thereis no need to compute disallowance as per Rule 8D. It isonly when the AO is not satisfied with the correctness ofthe claim of the assessee in respect of such expenditureor no expenditure having been incurred in relation toexempt income that the mandate of Rule 8D will operate.In the instant case the authorities below have directlygone to the second stage of computing disallowance U/s14A as per Rule 8D without rendering any opinion on thecorrectness or otherwise of the assessee’s claim in thisregard. The Delhi Tribunal, therefore, set aside theimpugned Order on this issue and restore the matter tothe file of AO to re-compute disallowance, if any, inaccordance with the above observations after dulyexamining the assessee’s claim in this regard.

Twenty Motivational QuotesCompiled by CA Ravi Jain |e-mail: [email protected]

Success is going from failure to failure without a loss of enthusiasm.− Sir Winston Churchill

There is no failure. Only feedback.− Unknown

Life isn't about finding yourself. Life is about creating yourself.− George Bernard Shaw

Turn your face to the sun and the shadows fall behind you.− Maori proverb

If you don't like something, change it. If you can't change it, change your attitude.− Maya Angelou

Progress always involves risks. You can't steal second base and keep your foot on first.− Frederick Wilcox

Prayer is not asking for what you think you want, but asking to be changed in ways you can't imagine.− Kathleen Norris

A great life is born in the soul, grown in the mind, and lived from the heart.− Suzanne Zoglio

The world does not pay for what a person knows. But it pays for what a person does with what he knows.− Laurence Lee

The most effective way to do it, is to do it.− Amelia Earhart

Many people can’t achieve the success of their dreams because they won’t leave their past behind. They won’t tear down the monuments they’ve built to their old hurts and problems.− Vic Johnson

Your only limitation is how much action you are willing to take.− Carrie Wilkerson

In order to succeed, your desire for success should be greater than your fear of failure.− Bill Cosby

Life is 10% what happens to you and 90% how you react to it.− Charles R. Swindoll

The cause of the confusion prevailing in your mind that weakens your thoughts is the false belief that there is a power or powers outside you greater than the power within you.− John McDonald

Very little is needed to make a happy life; it is all within yourself, in your way of thinking.− Marcus Aurelius

Many of life's failures are men who did not realize how close they were to success when they gave up.− Thomas Edison

Education is not a preparation for life; Education is life itself.− John Dewey

A creative man is motivated by the desire to achieve, not by the desire to beat others. − Ayn Rand

Be thankful for what you have; you'll end up having more. If you concentrate on what you don't have, you will never, ever have enough.

− Oprah Winfrey

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1111111The Institute of Chartered Accountants of India Vasai Branch of WIRC Newsletter

1111February 2013

THE INSTITUTE OF CHARTERED ACCOUNTANTS OF INDIA(Set up by Act of Parliament)

Vasai (WIRC)

Yours faithfully

CA. Kishor Vaishnav

Secretary

IMPORTANT DATES

1. Last Date of receipt of nominations(till 5.00 pm)

2. Date of scrutiny of nominations 26th & 27th February, 2013

3. Display of list of valid nominations on the Notice Board of the Branch 28th February, 2013

4. Last date for withdrawal of nominations 2nd March, 2013

(till 4.00 pm)

5. Display of final list of nominations 2nd March, 2013

(after 5.00 pm)

6. Date of Election 9th March, 2013

7. Declaration of Result 10th March, 2013

25th February, 2013

NOTICE

thNo. 01/2013-14 Date - 06 February, 2013

To,

All members of Vasai Branch of Western 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 Vasai Branch of the Western India Regional Councilthwill be held from 8.00 AM to 6.30 PM on 9 March 2013 (i.e., the Saturday) in the premises of the Branch (Office Address :

C-310/311, Shanti Shopping Centre, Opp. Railway Station, Mira Road(East) for electing Eight members of its ManagingCommittee for the term 2013-2016.The important dates relating to the above elections are as given below.

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

and payable at Mumbai.

The nomination form duly filled in should be submitted in a sealed cover addressed to CA. Ashok Jain Returning Officer/PollingOfficer at the above address of the Branch against an acknowledgement. The blank nomination form can be taken from the branchpremises effective from 07th Feb, 2013 till 3.00 PM of 25th Feb, 2013, i.e. the last date of receipt of nominations. The saidnomination form is also available on the website of the Branch. www.vasai-icai.org.

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

The views and opinions expressed or implied are those of the authors orcontribution and do not necessarily reflect those of Vasai Branch.Unsolicited articles and transparencies are sent in at the owner's riskand the publisher accepts no liability for loss or damage. Material in thispublication may not be reproduced, whether in part or in whole, withoutthe consent of Vasai Branch.

DISCLAIMER: The Vasai branch is not in any way responsible for theresult of any action taken on the basis of the advertisement published inthe Newsletter. The members, however, may bear in mind the provision ofthe Code of Ethicswhile responding to the advertisements.

To

Undelivered please return to :

Address:Centre, Mira Road (E),Thane-401107Telephone: 65568900Email: [email protected]: www.vasai-icai.org

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

Office No. C-, 310/311, Shanti Shopping

Designed and Printed by Finesse • +91-22 4036 4600

12121The Institute of Chartered Accountants of India Vasai Branch of WIRC Newsletter

12February 2013

Photo Gallery

ITAT Proceeding & MOCK Tribunal Dated on 29th Dec. 2012

Seminar on Internal Audit Dated on 30th Dec. 2012

Direct Tax Refresher Course held on 21st Jan To 25th Jan 2013

(L - R) CA Unmesh Narvekar, CA Bhupendra Shah (Speaker), Shri Vivek Varma, Shri I.P. Bansal (Judicial

Member of ITAT) CA Shweta Jain (Chairperson), CA Ramanand Gupta (Vice Chairman)

(L - R) CA Shweta Jain (Chairperson), CA C. N. Rushi (Speaker) & CA Satish Shenoy (Speaker)

CA Haresh Mehta (Committee Member) Presenting Memento to CA Tarun Ghia (CCM)

Photo Taken at Grand Cricket Tournament held on 13th January 2013 at Virat Ground, Virar

Winner Team of Cricket Tournament Valedictory Session at Cricket Tournament CA Unmesh Narvekar Distributing Colours at Adivasi School on 26th January 2013 at Republic Day

CA Atul Mehta Presenting Floral Welcome to CA Avinash Ravani (Speaker)

CA Jagdish Punjabi receiving Floral Welcome Participants at Refresher Course

Participants at Seminar

Group Photo Taken At Mock Tribunal with Judicial Members and A.R. & D.R. Team

Participant at Mock Tribunal CA Bhupendra Shah (Speaker)

CA Manish Pipalia(Speaker)

CA Satish Shenoy(Speaker)

CA C. N. Rushi(Speaker)

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