THE INSTITUTE OF CHARTERED ACCOUNTANTS OF INDIA

JALGAON BRANCH OF WIRC OF ICAI

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Plot No 10, ICAI Bhawan, Gajanan Colony, Ring Road, Jalgaon-425001Ph.0257-2232205 | Email: Jalgaon@icai.org

Web: www.jalgaon-icai.org

@E-Newsletter

December 2017

Branch Management Committee

CA Pallavi Mayur CA Ajay Jain CA Smita Bafna CA Sagar PatniChairperson Vice-Chairman Secretary Treasurer

CA Pankaj Agrawal CA Nitin Zawar RCM CA Shruti ShahMember Imm. Past Chairman Branch Nominee

Chairperson Desk

In the year 2017 the branch has strived hard to continuously touch all theprofessional areas with major thrust on GST. We have tried to cover topics on preGST, post GST, Brain Train Session, Practical difficulties in GST along with topics ofDirect Taxes and Workshops on Practical Trainings, health issues, overallmanagement of the member.

Eminent personalities and speakers shared their views and guided us with theirenriched professional expertise.

I would like to extend my gratitude towards President ICAI CA Nilesh Vikamsey Sirand all the Central Council Members along with WIRC Chairman Vishnu Agrawal, CASarvesh Joshi, branch nominee CA Shruti Shah and all the Regional CouncilMembers.

Respected Members

Greeting of the day !

The Year 2017 supported the theme of Jalgaon branch‘Reinvent Ourselves’.Learn and Unlearn and Relearn was the challenge for theprofessionals & public at large on account of GST Act andRERA and other amendments. However, we seek professionalopportunities also out of this.

The year was full of events and activities and I would like to extend my sincerethanks towards each and every member and all the committee members towardstheir continuous support.

The Members Directory of Jalgaon Branch was inaugurated and distributed alongwith a small token of remembrance amongst the members and Governmentofficials. The opening of Goodness Wall was a new activity started towards theunderprivileged of the society, during the year.

In the month of November the seminar on Practical Difficulties in Return filling ofGST with Recent amendments and question & answer session was kept for thebenefit of the members. Also, an awareness programme on mutual fund was taken.

In the month of December we have planned various activities like workshop onMicrosoft Excel, Effective use of Tally in GST, ERP in Tax Audit. Also a woman’s RRCis planned, along with a joint programme with Nasik branch.Most awaited event of students i.e. CA student conclave 2017 and a culturalprogramme for students ‘Youthvibe’ will be celebrated in December 2017. I appealall the members to encourage articles to participate in the Students conference.

Also, I appeal all the members to generously donate towards CA benevolent fund.

I wish you all a very happy New Year ahead.

CA Pallavi MayurChairperson

Memories of 2017

Memories of 2017

Furnishing of Statement of Financial Transaction under Rule 114E and Section 269ST – A Comparison

Introduction:Every person, as listed in section 285BA(1) is under an obligation tofurnish a periodic statement of specified financial transactions asprescribed under Income Tax Rules. Rule 114E of the Income Tax Rules,as amended w.e.f. 01.04.16, specifies the nature and value of reportabletransactions, periodicity of furnishing of SFT, format of SFT etc.

Whereas, In order to reduce generation and circulation of domestic black

CA Vinay Kawdia

Whereas, In order to reduce generation and circulation of domestic blackmoney the Finance Act 2017 had imposed a prohibition on receipt of cashpayments of rupees Two lakhs and above under new section 269ST,applicable w.e.f. 01.04.2017. Any contravention of the aforesaid provisionwould invite penalty on the recipient under Section 271DA which shall beequivalent to the amount of cash received. However, there would be nopenalty if there is good and sufficient reason for contravention of suchprovision.As far as sale of goods or services is concerned, it is interesting toanalyse as to how these two machineries are going to supplementeach other. Let’s look deeper.Rule 114E: Furnishing of statement of financial transaction: [w.e.f. 01.04.16]114E. (1) The statement of financial transaction required to be furnishedunder sub-section (1) of section 285BA of the Act shall be furnished inrespect of a financial year in Form No. 61A and shall be verified in themanner indicated therein.

(2) The statement referred to above shall be furnished by every personmentioned in column (3) of the Table below in respect of all thetransactions of the nature and value specified in the corresponding entryin column (2) of the said Table in accordance with the provisions of sub-rule (3), which are registered or recorded by him on or after the 1st dayof April, 2016, namely:—

No.*

(1)

Nature and value of transaction(2)

Reporting person(3)

10 Purchase or sale by any person of immovable property for anamount of thirty lakh rupees or more or valued by the stamp

valuation authority referred to in section 50C of the Act atthirty lakh rupees or more.

Inspector-Generalappointed under

section 3 of theRegistration Act, 1908

or Registrar or Sub-Registrar appointed

under section 6 of thatAct.

11. Receipt of cash payment exceeding two lakh rupees for sale,by any person, of goods or services of any nature (other than

those specified at Sl. Nos. 1 to 10 of this rule, if any.)

Any person who isliable for audit under

section 44AB of theAct.

* Only items as relevant to the discussion of this article are listed.

(3) Sub rule (3) of R. 114E specified aggregation mechanism whileaggregating the amounts for determining the threshold amount forreporting in respect of any person as specified in column (2) of the saidreporting in respect of any person as specified in column (2) of the saidTable.Sub Rule (3) applies to all persons other than the person at Sl. No.10 and Sl. No. 11 of above table w.e.f. 06.10.16. (Not. No. 91/2016)(4) …..

(5) As per Sub-rule (5),the SFT referred to in sub-rule (1) in form 61Ashall be furnished on or before the 31st May, immediately following thefinancial year in which the transaction is registered or recorded.

(ALERT: As per sec. 285BA r.w.r. 114E(6)(a) every reporting personmentioned in column (3) of the table under sub rule (2) of rule 114Eshould obtain a registration number from IT Department for the purpose offiling Statement of Financial Transactions [SFT] in form No. 61A.CBDT vide Notification No. 13 of 2016 dt. 30.12.16 explained theprocedure for Registration and generation of ITD registered EntityIdentification Number [ITDREIN])

Issues:Reporting in form 61A [in case of transaction No.11 mentioned atRule 114E(2) above] applies only to 44AB audit cases.

The norms of aggregation contained in sub-rule 3 of Rule 114E havebeen amended vide CBDT’s Notification No. 91/2016 dated 6th October,2016; clearly indicating that the said transactions did not requireaggregation and the reporting requirement under Statement of FinancialTransactions [SFT] for this purpose is on receipt of cash paymentexceeding Rupees Two Lakh for sale of goods or services PERTRANSACTION. [CBDT press release on 22.12.16]

Refer a summary chart attached at the end of this write up.

Section 269ST as inserted by F.A. 2017:

S. 269ST. No person shall receive an amount of two lakh rupees or more—(a) in aggregate from a person in a day; or(b) in respect of a single transaction; or(c) in respect of transactions relating to one event or occasion from a person, otherwise than by an account payee cheque or an account payee bank draft or use of electronic clearing system through a bank account:

Provided that the provisions of this section shall not apply to—(i) any receipt by—(a) Government;(a) Government;(b) any banking company, post office savings bank or co-operative bank;(ii) transactions of the nature referred to in section 269SS;(iii) such other persons or class of persons or receipts, which the Central Government may, by notification in the Official Gazette, specify.

Comparison:On one hand, any person who is liable for audit under section 44AB of the Act is liable to report, on yearly basis, all his transactions involving receipt of cash payment exceeding two lakh rupees for sale of goods or services of any nature in form 61A electronically.

On the other hand, as per newly introduced section 269ST there is equivalent penalty on receipt of cash payments of rupees Two lakhsor above, in the circumstances as specified in clause (a) to (c) of S. 269ST(1)!!

Thus these two machineries of the Act are clearly supporting each other foreffective implementation of legislative intent to curb black money throughrestrictions on cash transactions above specified limits. This is furtherexplained below by way of comparative chart in the context of transactionsof sale of goods or services.

Applicability of Rule 114E and S. 269ST in sales transactions

Sr. No. Nature of Transaction

S. 269ST

w.e.f.

01.04.2017

applicable

Yearly

Reporting

in Form 61A

w.e.f.

(01.04.16)

(1) (2) (3) (4)

1 Single Bill below Rs. 2,00,000/-.

1.1 - Full Recovery in cash NO NO

1.2 - Part recovery in cash NO NO

1.3 - Full recovery by Cheque NO NO

2 Single Bill exceeding Rs. 2,00,000/-.

2.1 - Full Recovery in cash on single occasion YES YES

2.2 - Part recovery in cash below Rs. 2 Lacs NO NO

2.3 - Part recovery in cash above Rs. 2 Lacs on

single occasion YES YES

2.4 - Part recovery in cash above Rs. 2 Lacs on

multiple occasions but not a single

receipt exceeds Rs. 2 Lacs YES YES

2.5 - Full recovery by Cheque NO NO2.5 - Full recovery by Cheque NO NO

3Multiple Bills issued during year to same person and

the aggregate bill amount exceeds Rs. 2,00,000/-.

(However not a single bill exceeds Rs. 2 Lacs)

3.1 - Full Recovery in cash on single occasion YES YES

3.2 - Part recovery in cash above Rs. 2 Lacs on

NO NOmultiple occasions (on different days) but

not a single receipt exceeds Rs. 2 Lacs

3.3- Part recovery in cash above Rs. 2 Lacs on

multiple occasions (IN SINGLE DAY) but

not a single receipt exceeds Rs. 2 Lacs YES NO*

3.4 - Part recovery in cash above Rs. 2 Lacs on

YES NOsingle occasion

3.5 - Full recovery by Cheque NO NO

Assumptions:

- Multiple bills issued to a person areNOT relating to one event or occasion

- ‘On single occasion’ means at a moment in a day

*Refer CBDT press release dt. 22.12.16 as discusse above

NOTE: In case of -multiple Bills issued during year to same person and the aggregate billamount exceeds Rs. 2,00,000/-; andOne or more bills exceeds Rs. 2 Lakh,Assessee has to establish one to one co-relation in books of accountsbetween bills issued and cash receipts from time to time, so as to checkapplicability of section 269ST.

Example:Mr. A made following sales to Mr. B:

Date Bill No. Bill Amount (Rs.)

20.04.17 1 300000

22.04.17 15 150000

TOTAL - 4,50,000

Recovery details:

Sr. Date Receipt (Rs.) Mode of receiptSr. Date Receipt (Rs.) Mode of receipt

1 24.04.17 150000 Cash

2 25.04.17 90000 Cash

3 26.04.17 100000 Cheque

4 27.04.17 110000 Cheque

- TOTAL 4,50,000 -

Now, if the cash receipts at Sr. No. 1 and 2 above are approprited towards Bill No. 1, the cash receipts at Sr. No. 1 and 2 will attract penalty as per S. 269ST(1)(b).[As per S. 269ST(1)(b), there will be aggregation of all cash receipts in respect of a single sale transaction]On the other hand, if the cash receipt at Sr. No. 1 is approprited towards Bill No. 15 and cash receipt at Sr. No. 2 is approprited towards Bill No. 1, then there will be no contravention of section 269ST!!Therefore, now dealers should specifically mention on every cash receipt the sale Bill No. and date against which the cash is accepted.

Diiferecnes:There is a notable difference between the two provisions as discussedabove. Section 269ST applies to transactions of receipt of money of TwoLakh rupees or more, whereas, reporting of SFT, as implemented byRule 114E applies to receipt of cash payment exceeding Two Lakhrupees. Thus, the sales transactions involving receipt of cash of exactlyRs. Two lakhs will go unreported in form 61A under Rule 114E, which arein fact liable to be booked under S. 269ST read with section 271DA of theAct.Thus, to make both the provisions fully supportive to each other, thenecessary amendment may be made to remove the above mischief.

Procedural Part:

Furnishing of SFT in respect of reportable transactions under Rule114E(2)(11) during F.Y. 16-17 in form 61A up to 31.05.17:Any person who is liable for audit u/s 44AB can only be a reporting personin form 61A.Receipt of cash exceeding Rs. two Lacs per transaction for sale ofgoods/services of any nature is reportable transaction.Step:1:First create ITDREIN for the reporting person through his IT Login – ReferCBDT Not. No. 1/2017 for detailed procedure.CBDT Not. No. 1/2017 for detailed procedure.

Step:2:If there is any reportable transaction in respect of any customer duringthe F.Y., then following information (customer wise) is required to be filledat part B.3 of form 61A;

B.3.2) Aggregate gross amount received from a person;B.3.3) Aggregate gross amount received from a person in cash;B.3.4) Aggregate gross amount paid to a person;

NOTES:1. For sale or purchase, by any person, of goods or services of any nature it isobligatory to quote PAN for amount exceeding two lakh rupees per transaction:(refer Rule 114B)2. The aggregation rule is not applicable for identification of reportabletransactions3. The relevant reporting format is Part A (Statement Details) and Part B (ReportDetails)4. The Report Type should be specified as AF-Aggregated Financial Transactions(A.2.7).5. The reporting format aggregates the transactions of one person in one report(Customer wise reporting)6. One report would include details of one person along with transaction details7. The Product Type should be specified as ZZ –Others (B.3.1)

Forthcoming Events of December 2017

Date Subjects SpeakerCPE

HoursVenue

4-Dec-17 Workshop on Microsoft Excel CA K K Badale, Jalgaon 3ICAI Bhavan, 10, Gajanan

Colony, Ring Road, Jalgaon

4-Dec-17 Career Counselling Programme CA Darshan Jain NA

Sheth Lalji Narayanji

Sarvajanik Vidyalaya,

Jalgaon

5-Dec-17Workshop on Effective Use of

Tally for GSTCA K K Badale, Jalgaon 3

ICAI Bhavan, 10, Gajanan

Colony, Ring Road, Jalgaon

6-Dec-17Workshop on Effective use of

ERP in Tax AuditCA K K Badale, Jalgaon 3

ICAI Bhavan, 10, Gajanan

Colony, Ring Road, Jalgaon

10-Dec-17 2nd Series of CPT Mock Test NA NAICAI Bhavan, 10, Gajanan

Colony, Ring Road, Jalgaon

17-Dec-17Women RRC & Seminar on Role

of CA Women in Make in IndiaCA Smita Bafna, Jalgaon 3 Shegaon

23-Dec-17

GST for Charitable Trusts, Co-

Operative Societies, NPO's & Job

Work Provisions & E-Way Bill

Mr. YASHWANT

JAYWANT KASAR3

Nasik Branch of WIRC of

ICAi

23rd &

24th Dec

2017

CA Students

ConferenceTaxation, Company

Law, Indian Accounting

Standards, Indian Economy &

Current Affairs

CA Pravin Navandar, CA

Harsh Dedhia, RCM CA

Pritee Savla, CA G. B.

Modi, CA Vinay Kawdia,

CA Vishal Poddar, Mr.

Kabir Sonalkar

NA Senate Hall, NMU, Jalgaon

Current AffairsKabir Sonalkar

26-Dec-17Youthvibe Students Cultural

EveningNA NA

Convocation Hall, NMU,

Jalgaon

* Appeal to all CA Members to generouslycontribute towards the “CA Benevolent Fund”.

Programes of November 2017