FACTS:
1) A CA QUOTED RS. 174 / GRAM PANCHAYAT FOR PANCHAYAT AUDIT FOR HOOGLY & ANOTHER CA QUOTED RS 224 FOR COACH BIHAR,WB.
2) ANOTHER CA QUOTED 23% OF AUDIT FEES IN C.Y. TO LAST YEAR FEES TO SECURE WORK OF HUDCO.
MEASURES EXPECTED FROM ICAI:
1) RE-ESTABLISH EMPANELMENT SYSTEM : We request to re-establish system of Empanelment by RBI by widening its scope i.e. for All type of Bank Audit, whether concurrent, Staturary, revenue. A copy of Report should also be submitted directly to RBI. Everyone knows benefit of appointment by Independent body. Now, everyone know, how firms are appointed by adopting unethical means. Previously, system of Empanelment was there in Bank audit & appointment by RBI was there. Why such system was scrapped?If any deficiency in system was there, than such system should have been refined instead of scrapping.
If RBI is not ready to take the responsibility of appointment than ICAI should establish a " independent cell of its staffs"' for appointment
2) CHANGE TENDERING SYSTEM: We CAs will not gain with such tender system. Even panwala, autowala, rickshaw wala, all fixes minimum price in a remote village. Change in system is also needed apart from awareness among CAs. I will request to impress upon ministry and authorities to have a base quotation price keeping in view of work load."Base quotation price" is the price below which no one can quote.
3) PROFESSIONAL MISCONDUCT : Securing or quoting fees below heighest of last 3 years fees should be part of professional misconduct. However, in cast of 1st year of audit, basis should be Total cost + reasonable profit.
4) CITYWISE/ STATEWISE TASK FORCE TO MONITOR: We request ICAI head office to form a "big task force" consisting of staffs of ICAI to monitor on issue.
5) CREATE AWARENESS To create social pressure on cut throat bidders, we request to email to each members the regulation for maintainance of cost sheet & consequences for its violations.
6) AUDIT OF GOVT. SPRNDING: If we could impress upon authorities, the benefits of (a)audit of each rupee of govt. and
(b)maintainance of a/c in double entry system, we will be getting a large volume of work and cut throat bidding will be automatically curbed.
7)RE-NEGOTIATE WITH MINISTRY, CAG, RBI AND OTHER AUTHORITES:Taking into account the skill and time required to perform work & inflation, we request ICAI to re-negotiate fees with authorities.
8) SUO MOTO ACTION : We request ICAI head office to direct regional councils, branches, study circles, chapters, other bidders at tenders to complain to ICAI, Head office and also request ICAI, Head office to take suo moto action against cut throat bidders.
9)AGE LIMIT OF 50 YEARS FOR ENTERING INTO PRACTICE: Like advocate, there should be age limit for entering into practice. It should be 50 years FOR TAKING NEW CP.
10) ESTABLISH A SYSTEM OF EMPANELMENT FOR COMPANIES ALSO: A system of empanelment for appointment of auditor of Companies, whether Private Ltd or public Ltd, should also be established. Appointment of auditor by an "Independent Body will further leads to independence of auditor.
11) ESTABLISH A SYSTEM OF EMPANELMENT FOR ALL TYPE OF AUDIT:A system of empanelment for appointment of all type of audit whether Tax, Bank, society, COMPANY , SCHOOL should also be established. Like examination department, ICAI should establish an "INDEPENDENT EMPANELMENT DEPARTMENT" to take care of empanelment. All audit work should be allotted by such department. Appointment of auditor by an "Independent Body" will further leads to independence of auditor. i
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Friday, May 31, 2013
LLC IS NOT A VALID PARTNERSHIP-USA-SUPREME COURT
The U.S. Supreme Court has declined to review the Third Circuit Court of Appeals' decision in Historic Boardwalk Hall, LLC. The LLC was created to redevelop Atlantic City's Boardwalk Hall and pass the historic rehabilitation credits it qualified for to a corporate investor. By declining the petition for certiorari, the Supreme Court lets stand the lower court's holding that the LLC is not a valid partnership.
Wednesday, May 29, 2013
Appointment of Internal Auditor Chartered Accountant for the purpose of Auditing of account of Maharashtra State Board Of Technical Education
Maharashtra State Board Of Technical Education 
Last Date : 30/05/2013
Appointment of Internal Auditor Chartered Accountant for the purpose of Auditing of account related works at its head office, Located at for u Regional offices located.
Address: Maharashtra State Board Of Technical Education,4th Floor,Govt,Polytechnic Bldg.49.Kherwadi,Bandra (East)Mumbai-400051
Phone: 26472122
Email:
Last Date : 30/05/2013
Appointment of Internal Auditor Chartered Accountant for the purpose of Auditing of account related works at its head office, Located at for u Regional offices located.
Address: Maharashtra State Board Of Technical Education,4th Floor,Govt,Polytechnic Bldg.49.Kherwadi,Bandra (East)Mumbai-400051
Phone: 26472122
Email:
ICAI- WHERE & WHY WE LOST THE TAX AUDIT ISSUE OF PARAMOUNT IMPORTANCE
ICAI- WHERE & WHY WE LOST THE TAX
AUDIT ISSUE OF PARAMOUNT IMPORTANCE?
In the year
2011-12, An issue of Conduct of Excessive Tax audits was surfaced at the various
levels of the Institute in its committees and council. There was a proper
response to the representation made to CBDT by one of committee of ICAI .It simply sought tax audit data based on returns e-filed
during the year 2010-11. The Institute duly received the data relating to
number of tax audits conducted by the members along with the
I-T - Whether search assessment can be made even when no incriminating material
I-T - Whether search assessment can be made even when no incriminating material or evidence is seized at time of search - NO: ITAT
NEW DELHI, MAY 29, 2013: THE issues before the Bench are - Whether assessment can be made u/s 153A even when no incriminating material or evidence was found or seized at the time of search and there is no reference to the same in the AO's order; Whether merely because the payment for investment in property was made through the bank account, it can be presumed that the source is explained and verified and hence no addition on account of unexplained investment can be made and Whether in case of search in the absence of any incriminating material found during search, no addition can be made on the basis of Report of the DVO.
Facts of the case
Assessee is a Civil Contractor having proprietary concern viz. M/s B.S. Tubewells. A search and seizure operation u/s 132 was carried out, consequent to which search assessment u/s 153A was completed. The AO estimated the net profit @10% of the gross receipt as against declared net profit rate of 8.03% by making the following observations:- i) Contract-wise books of accounts were not maintained; ii) In the case of Assessee's husband Sh. Vijay Kumar Kataria having identical activities, profit was declared at 24%; and iii) Even the assessee has declared 10% in some of the years.
CIT(A) observed that assessee has been in the business from a number of years and the system of accounting has been the same as in the preceding years. That it was not understood on what basis the AO had estimated the net profit at 10% of the gross profit. It was submitted that the assessee was executing small jobs of Rs. 15-20 lacs. It was further submitted that the observation by the AO regarding rate of 24% in the case of Vijay Kataria and 10% in the case of assessee was factually incorrect. It was further contended that in case of no books, profit u/s 44AD was to be computed at 8%. In the present case, regular books of accounts were maintained and AO had not found any mistake or irregularity. It was further submitted that it was not the case of the AO that any incriminating material had been found during the course of search or there were any defect or deficiency in the books of accounts and as such no addition could be made on the basis of general observation. Considering the above, CIT(A) deleted the addition made by the AO. He held that there was no case of estimation of trading.
Unexplained investment - AO made another addition on account unexplained investment in property. On this issue assessee was asked to furnish the details of immovable property purchased / sold in A.Y. 2003-04 and to explain the source of investment so made, which was duly furnished. Assessee submitted that the said purchase was made out of the sale proceeds from the sale of the property in Sarvodaya Enclave, New Delhi. The Assessee furnished the copy of the sale deed of the property which showed that the property at C-181, Sarvodaya Enclave, New Delhi was sold for Rs. 20,00,000/-. Whereas the investment made by the assessee in property No. B-50, Soami Nagar, New Delhi was Rs. 37,29,000/- (Including Rs. 4.59 lacs as tax and duty). Hence, the AO noted that the balance amount of investment of Rs. 17,29,000/- was unexplained by assessee with any kind of documentary evidence. Accordingly, he made an addition of Rs. 17,29,000/-. CIT(A) held that he has gone through the relevant bank statement and from which it was self evident that entire investment of Rs. 33 lacs is fully supported and verifiable. He held that once it is found that the payment was made through bank account and there is no dispute between various debit and credit entries in the bank account, there is no case of any addition. He held that the AO has made only general observation and totally disregarded the bank statement which was placed on record. Hence, CIT(A) deleted the addition.
Reference u/s 142A to the DVO - Reference u/s 142A to the DVO was made for determination of fair market price of the property. As per the Valuation Officer's Report, the valuation of the impugned property was determined at Rs. 63,74,700/- as against Rs.33,00,000/- shown by the assessee. Thus, there was a difference of Rs. 30,74,700/-. This was added to the income of the assessee. However, CIT(A) deleted the addition as there was no evidence of adverse material regarding payment of under hand consideration.
On appeal by the Revenue, held that,
++ Search Assessment u/s 153A - AO in this case has estimated the trading results of the assessee @10% of gross profits as against 8.03% reflected by the assessee. The Assessee in this case is executing small contracts. The contracts are of same nature and regular books are maintained. No specific defect has been pointed out in the books maintained. It is further noted that on similar facts, AO has not made any addition in the assessment order passed u/s 153A for A.Y. 2001-02; 2004-05; 2005-06 & 2006-07. As such there is a clear contradiction in the approach of the AO. Furthermore, reference to net profit in the case of Vijay Kumar Kataria and assessee in the past is factually incorrect;
++ this is a case of search and assessment order was passed u/s 153A of the I.T. Act. It is noted that no incriminating material or evidence was found or seized at the time of search and there is no reference to the same in the AO's order. The ITAT in the case of All Cargo Global Logistics Ltd. vs. DCIT (2012-TIOL-391-ITAT-MUM-SB), with reference to the assessment u/s 153A, it was held that any assessment that are abated, the AO retains the original jurisdiction as well as jurisdiction conferred on him u/s 153A for which assessment shall be made for each assessment year separately. In other cases in addition to the income that have already been assessed, the assessment u/s 153A will be made on the basis of incriminating material which in the context of relevant provisions means (i) books of accounts, other documents found in the course of search, but not produced in the course of original assessment & (ii) undisclosed income or property discovered during the course of search. In the background of the aforesaid discussions and precedents, there is no infirmity in the order of the CIT(A);
++ Unexplained investment – there is no finding by the CIT(A) as to what was the source of investment of Rs. 17,29,000/-. Merely because the payment was made through the bank account, it could be presumed that the source is explained and verified. Further the investment in this case as reflected in the assessee's statement of account needs to be corroborated from the books of accounts and records maintained by the assessee. As the books of accounts and records do not corroborate the investments, the addition has been made in this case. Hence, assessee's contention that no addition can be made in the absence of any incriminating material found is not germane here. Hence, in the interest of justice, this issue was remitted to the file of the AO. The AO shall consider the issue afresh, in light of the submissions made by the assessee;
++ Reference u/s 142A to the DVO - Addition in this case has been made pursuant to search on the basis of Valuation Report of the DVO. It has been settled that in case of search in the absence of any incriminating material found during search, no addition can be made on the basis of Report of the DVO;
++ From the judicial pronouncements, it is evident that in the absence of any evidence that the assessee has invested more than value declared in the registered sale deed of property purchased, the addition in this regard on the basis of Valuation Report by the DVO is not sustainable;
++ Furthermore, we find that in this case the assessment was made u/s 153A of the I.T. Act. Hence, assessment u/s 153A can be made only on the basis of incriminating material found during the course of search;
++ Hence, in the background of the aforesaid discussions and precedents, there is no infirmity in the order of the CIT(A) on this issue. Accordingly, the same was affirmed.
NEW DELHI, MAY 29, 2013: THE issues before the Bench are - Whether assessment can be made u/s 153A even when no incriminating material or evidence was found or seized at the time of search and there is no reference to the same in the AO's order; Whether merely because the payment for investment in property was made through the bank account, it can be presumed that the source is explained and verified and hence no addition on account of unexplained investment can be made and Whether in case of search in the absence of any incriminating material found during search, no addition can be made on the basis of Report of the DVO.
Facts of the case
Assessee is a Civil Contractor having proprietary concern viz. M/s B.S. Tubewells. A search and seizure operation u/s 132 was carried out, consequent to which search assessment u/s 153A was completed. The AO estimated the net profit @10% of the gross receipt as against declared net profit rate of 8.03% by making the following observations:- i) Contract-wise books of accounts were not maintained; ii) In the case of Assessee's husband Sh. Vijay Kumar Kataria having identical activities, profit was declared at 24%; and iii) Even the assessee has declared 10% in some of the years.
CIT(A) observed that assessee has been in the business from a number of years and the system of accounting has been the same as in the preceding years. That it was not understood on what basis the AO had estimated the net profit at 10% of the gross profit. It was submitted that the assessee was executing small jobs of Rs. 15-20 lacs. It was further submitted that the observation by the AO regarding rate of 24% in the case of Vijay Kataria and 10% in the case of assessee was factually incorrect. It was further contended that in case of no books, profit u/s 44AD was to be computed at 8%. In the present case, regular books of accounts were maintained and AO had not found any mistake or irregularity. It was further submitted that it was not the case of the AO that any incriminating material had been found during the course of search or there were any defect or deficiency in the books of accounts and as such no addition could be made on the basis of general observation. Considering the above, CIT(A) deleted the addition made by the AO. He held that there was no case of estimation of trading.
Unexplained investment - AO made another addition on account unexplained investment in property. On this issue assessee was asked to furnish the details of immovable property purchased / sold in A.Y. 2003-04 and to explain the source of investment so made, which was duly furnished. Assessee submitted that the said purchase was made out of the sale proceeds from the sale of the property in Sarvodaya Enclave, New Delhi. The Assessee furnished the copy of the sale deed of the property which showed that the property at C-181, Sarvodaya Enclave, New Delhi was sold for Rs. 20,00,000/-. Whereas the investment made by the assessee in property No. B-50, Soami Nagar, New Delhi was Rs. 37,29,000/- (Including Rs. 4.59 lacs as tax and duty). Hence, the AO noted that the balance amount of investment of Rs. 17,29,000/- was unexplained by assessee with any kind of documentary evidence. Accordingly, he made an addition of Rs. 17,29,000/-. CIT(A) held that he has gone through the relevant bank statement and from which it was self evident that entire investment of Rs. 33 lacs is fully supported and verifiable. He held that once it is found that the payment was made through bank account and there is no dispute between various debit and credit entries in the bank account, there is no case of any addition. He held that the AO has made only general observation and totally disregarded the bank statement which was placed on record. Hence, CIT(A) deleted the addition.
Reference u/s 142A to the DVO - Reference u/s 142A to the DVO was made for determination of fair market price of the property. As per the Valuation Officer's Report, the valuation of the impugned property was determined at Rs. 63,74,700/- as against Rs.33,00,000/- shown by the assessee. Thus, there was a difference of Rs. 30,74,700/-. This was added to the income of the assessee. However, CIT(A) deleted the addition as there was no evidence of adverse material regarding payment of under hand consideration.
On appeal by the Revenue, held that,
++ Search Assessment u/s 153A - AO in this case has estimated the trading results of the assessee @10% of gross profits as against 8.03% reflected by the assessee. The Assessee in this case is executing small contracts. The contracts are of same nature and regular books are maintained. No specific defect has been pointed out in the books maintained. It is further noted that on similar facts, AO has not made any addition in the assessment order passed u/s 153A for A.Y. 2001-02; 2004-05; 2005-06 & 2006-07. As such there is a clear contradiction in the approach of the AO. Furthermore, reference to net profit in the case of Vijay Kumar Kataria and assessee in the past is factually incorrect;
++ this is a case of search and assessment order was passed u/s 153A of the I.T. Act. It is noted that no incriminating material or evidence was found or seized at the time of search and there is no reference to the same in the AO's order. The ITAT in the case of All Cargo Global Logistics Ltd. vs. DCIT (2012-TIOL-391-ITAT-MUM-SB), with reference to the assessment u/s 153A, it was held that any assessment that are abated, the AO retains the original jurisdiction as well as jurisdiction conferred on him u/s 153A for which assessment shall be made for each assessment year separately. In other cases in addition to the income that have already been assessed, the assessment u/s 153A will be made on the basis of incriminating material which in the context of relevant provisions means (i) books of accounts, other documents found in the course of search, but not produced in the course of original assessment & (ii) undisclosed income or property discovered during the course of search. In the background of the aforesaid discussions and precedents, there is no infirmity in the order of the CIT(A);
++ Unexplained investment – there is no finding by the CIT(A) as to what was the source of investment of Rs. 17,29,000/-. Merely because the payment was made through the bank account, it could be presumed that the source is explained and verified. Further the investment in this case as reflected in the assessee's statement of account needs to be corroborated from the books of accounts and records maintained by the assessee. As the books of accounts and records do not corroborate the investments, the addition has been made in this case. Hence, assessee's contention that no addition can be made in the absence of any incriminating material found is not germane here. Hence, in the interest of justice, this issue was remitted to the file of the AO. The AO shall consider the issue afresh, in light of the submissions made by the assessee;
++ Reference u/s 142A to the DVO - Addition in this case has been made pursuant to search on the basis of Valuation Report of the DVO. It has been settled that in case of search in the absence of any incriminating material found during search, no addition can be made on the basis of Report of the DVO;
++ From the judicial pronouncements, it is evident that in the absence of any evidence that the assessee has invested more than value declared in the registered sale deed of property purchased, the addition in this regard on the basis of Valuation Report by the DVO is not sustainable;
++ Furthermore, we find that in this case the assessment was made u/s 153A of the I.T. Act. Hence, assessment u/s 153A can be made only on the basis of incriminating material found during the course of search;
++ Hence, in the background of the aforesaid discussions and precedents, there is no infirmity in the order of the CIT(A) on this issue. Accordingly, the same was affirmed.
CX - Cement remaining in bulker - consignee issuing challans evidencing short su
CX - Cement remaining in bulker - consignee issuing challans evidencing short supply - appellant taking credit on such quantity which was received back - since no documents produced to justify availment, Pre-deposit ordered: CESTAT
MUMBAI, MAY 29, 2013: YOU may have heard of the consignee being denied CENVAT credit on the short supply of inputs received by them. One always wondered as to what happened to the inputs that went missing on the way…pilfered, evaporated or vanished into thin air! On occasions where the variation in weight occurs due to weighment at various weighbridges and also because of evaporation during transportation, the Tribunal has been allowing the credit of the duty paid on the entire quantity more so since there is no proof that the inputs were diverted.
Be that as it may, in those cases where the inputs were received short, the consignee issues debit notes and avails a lesser quantum of credit so that he does not land into trouble later.
Resultantly, the consignor has to bear the loss!
To overcome this, the present assessee has devised a unique modus. Read further -
+ The assessee is clearing cement in the bulkers to their buyers. At the time of deliveries of the cement from bulker to the buyers, some consignment of cement remained in the bulker , which are received by the applicant and the applicant availed credit on the duty paid on such quantity which was received back and as per the delivery challans where the buyers of the applicant shows the short receipt of the cement.
The jurisdictional authorities found this intriguing and resultantly issued and confirmed the demand of credit irregularly availed on the ground that the applicant availed credit without cover of any proper document/challan showing short receipts issued by the buyers.
The Commissioner (A) too confirmed this demand and so the appellant is before the CESTAT with a Stay application.
It is submitted that they produced sample invoices and challans before the adjudicating authority and being a voluminous record, the applicant sought time. However, time was not granted by the adjudicating authority and confirmed the demand. Before the Commissioner (Appeals) also, the applicant sought time to produce all the documents. In spite of the request made, the appeal was dismissed. The contention is that the applicant is having all the records showing the delivery of short supply of cement to their buyers and the challans issued by the buyer, debit entries made by the applicant to show that the buyers have received less quantity of the cement mentioned in the invoice issued by the applicant on which duty has been paid hence the demand is not sustainable.
The Revenue representative submitted that the R/s had visited the factory of the applicant for verification but none of the records were provided to him and hence had to return "empty" handed.
The Bench observed -
"5. We find that the applicant is availing credit of duty paid on the cement which was received short by their customers. In these circumstances, the applicant is to show that their customers have received less quantity of cement than shown in the invoice. The applicant has not produced such documents before the adjudicating authority nor before the Commissioner (Appeals). In these circumstances, we find that it is not a case for total waiver of duty. However, taking into accounts the facts and circumstances of the case, the applicant is directed to deposit an amount of Rs.10,00,000/- (Rupees Ten lakhs only) within eight weeks…."
In passing : Any scope for rule 16 of CER, 2002 to enter the scene?
MUMBAI, MAY 29, 2013: YOU may have heard of the consignee being denied CENVAT credit on the short supply of inputs received by them. One always wondered as to what happened to the inputs that went missing on the way…pilfered, evaporated or vanished into thin air! On occasions where the variation in weight occurs due to weighment at various weighbridges and also because of evaporation during transportation, the Tribunal has been allowing the credit of the duty paid on the entire quantity more so since there is no proof that the inputs were diverted.
Be that as it may, in those cases where the inputs were received short, the consignee issues debit notes and avails a lesser quantum of credit so that he does not land into trouble later.
Resultantly, the consignor has to bear the loss!
To overcome this, the present assessee has devised a unique modus. Read further -
+ The assessee is clearing cement in the bulkers to their buyers. At the time of deliveries of the cement from bulker to the buyers, some consignment of cement remained in the bulker , which are received by the applicant and the applicant availed credit on the duty paid on such quantity which was received back and as per the delivery challans where the buyers of the applicant shows the short receipt of the cement.
The jurisdictional authorities found this intriguing and resultantly issued and confirmed the demand of credit irregularly availed on the ground that the applicant availed credit without cover of any proper document/challan showing short receipts issued by the buyers.
The Commissioner (A) too confirmed this demand and so the appellant is before the CESTAT with a Stay application.
It is submitted that they produced sample invoices and challans before the adjudicating authority and being a voluminous record, the applicant sought time. However, time was not granted by the adjudicating authority and confirmed the demand. Before the Commissioner (Appeals) also, the applicant sought time to produce all the documents. In spite of the request made, the appeal was dismissed. The contention is that the applicant is having all the records showing the delivery of short supply of cement to their buyers and the challans issued by the buyer, debit entries made by the applicant to show that the buyers have received less quantity of the cement mentioned in the invoice issued by the applicant on which duty has been paid hence the demand is not sustainable.
The Revenue representative submitted that the R/s had visited the factory of the applicant for verification but none of the records were provided to him and hence had to return "empty" handed.
The Bench observed -
"5. We find that the applicant is availing credit of duty paid on the cement which was received short by their customers. In these circumstances, the applicant is to show that their customers have received less quantity of cement than shown in the invoice. The applicant has not produced such documents before the adjudicating authority nor before the Commissioner (Appeals). In these circumstances, we find that it is not a case for total waiver of duty. However, taking into accounts the facts and circumstances of the case, the applicant is directed to deposit an amount of Rs.10,00,000/- (Rupees Ten lakhs only) within eight weeks…."
In passing : Any scope for rule 16 of CER, 2002 to enter the scene?
GST ONLY AFTER ELECTIONS
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________________________________
GST rollout only after next govt comes to power, says PM
SHYAMALMAJUMDAR
Tokyo, 28 May
The past six months might have seen a series of positive developments around the Goods and Services Tax ( GST), but its implementation will happen only after a new government comes to power after the elections in April next year.
Prime Minister Manmohan Singh said here today that there were difficulties in getting states to surrender their power to tax, and for GST to happen, a Constitutional amendment was required. " We will have elections in April 2014… I think there will be a strong effort by whichever government is in power that time to move towards the GST". The implementation was inevitable as there was a general agreement among professionals and all shades of opinion agreed that India needed GST to help its growth story, he added.
Singh was replying to a question on whether he could give a timeline to the implementation of GST at a luncheon organised by The Japan Business Federation, commonly referred to as Keidanren, and the IndoJapan Business Leaders Forum.
GST, a tax reform that seeks to create one common market for all goods and services in India, has been long delayed due to differences between the Centre and states over its design and issue of central sales tax compensation. Singhs statement is a tacit acknowledgement of the fact that such an amendment looked difficult in a deeply divided Parliament.
The Prime Minister, however, was in a relaxed mood throughout and even cracked jokes while replying to questions from the audience comprising some of the biggest names in Japan and India Inc. When a Sumitomo Mitsui Banking Corporation executive wanted to know some specific details on relaxation of priority sector lending norms, Singh advised the gentleman to address the question to the finance ministry and the Reserve Bank of India. " I am sure you know about the saying that the higher you go, the lesser you know," he said. The applause simply refused to die down.
In response to another question, Singh said he was repeatedly told that Japanese companies ranked India the most promising long- term destination.
Yet, he, found out India accounted for only four per cent of total Japanese outward investment flow into Asia.
When someone wanted to know the reasons for the inordinate delay in clearing bottlenecks in India, Singh said its better to take a considered view as "sometimes the best can be the enemy of the good". The audience was amused, though it didn't look too impressed this time. Singh assured Japanese banks that their proposal for more freedom on opening of branches would be considered as he personally believed they added net value to the country. On the demand to relax priority sector lending norms, Singh, however, took a tough stand. Pointing out that some specific cases could be considered as he wanted more Japanese banks to come into India, he said foreign banks should also learn to adjust to the environment in the countries they operate in order to gain more acceptability.
Singh reiterated his vision that the Indian economy would soon bounce back to eight per cent annual growth, creating enormous opportunities for Japanese business. On the basis for his confidence, Singh said " a capital output ratio of 4: 1, a savings rate of over 30 per cent and an investment rate of 35 per cent will easily yield a growth rate of about eight per cent." Singh said India has targeted an investment of around $ 1 trillion in infrastructure over the 12thPlan period with half of it coming from the private sector and public- private partnership. He hoped Japanese business will pick up a large share of the investment opportunities. For this, he was willing to consider innovative solutions.
He was however non- committal on Japan's offer for financial and technical support for a detailed project report for the Mumbai- Ahmedabad high speed railway route.
Later, speaking at a meeting of the Japan- India Association in the evening, Singh mentioned his Japanese counterpart Shinzo Abe's speech in the Indian Parliament in 2007, when he spoke of the " confluence of the two seas" — the Pacific and the Indian oceans — which has defined the new framework for the bilateral relationship.
Singh suggested three areas of cooperation — strengthening regional forums that will help develop habits of consultation and cooperation; promotion of wider and deeper economic integration; and focus on maritime security across the linked regions of the Indian and Pacific oceans.
"Our relationship with Japan has been at the heart of our Look East Policy. Japan inspired Asias surge to prosperity and it remains integral to Asia's future. The world has a huge stake in Japan's success," the Prime Minister said.
Another neighbour of India would be listening to at least this part quite keenly.
Singh says India accounts for just 4% of total Japanese investment in Asia
PM Manmohan Singh ( left) with his Japanese counterpart Shinzo
Abe, at Abe's official residence in Tokyo on Tuesday PHOTO: REUTERS
PADMA AWARD IN TOKYO
Hotel Oreku in Tokyo was the venue of an unusual ceremony on Tuesday: Prime Minister Manmohan Singh conferred the Padma Shri award on Noburu Karashima, an eminent Japanese scholar, for his contribution in literature and education.
Karashima, who had spent several years as a research scholar and is an acknowledged authority on medieval South Indian inscriptions, could not be present for the award ceremony in New Delhi last month for health reasons. As the PM and the amiable professor bowed to each other, there was a standing ovation from the 1,000- plus crowd
RICH HOUSE
Its not the Japanese economy alone that is feeling good about Abenomics. The elected representatives are feeling good, too. According to a weekly survey, the assets of the Lower House lawmakers have grown for the first time since 1993. Since the previous survey in 2010, the average value of assets held by the 184 lawmakers has nearly doubled to ¥ 22.9 million
LOW STOCK
The Nikkei has been down over the past few days after a stupendous rise ever since Abenomics came into being. But it seems the average Japanese couldnt care less. Shares represent only seven per cent of household financial assets, compared with more than one quarter in the US. Four- fifths of Japanese households have never owned a security and 88 per cent have never invested in a mutual fund, according to the Japan Securities Dealers Association. Indians are in good company JAPAN DIARY
Ingenuity in meeting public holding norm
SAMIE MODAK
Mumbai, 28 May
Ideas have not been a constraint for the many Indian companies looking to comply with next week's deadline for the minimum public shareholder norms. While the bulk have taken the conventionally popular offer- for- sale ( OFS) route to pare promoter holding below 75 per cent, some have taken atypical routes.
These include winding up of depository receipt programmes, free bonus shares to minority shareholders and moving excess promoter holding to a philanthropic trust. OFS apart, the Securities and Exchange Board of India ( Sebi) has prescribed other means such as an Institutional Placement Programme ( IPP), a rights offering and bonus issues for companies. The regulator has also said it would, on a case- bycase basis, consider any other route requested by firms. Some of these did not want to sell stake to investors due to unfavourable market conditions.
For instance, Tata Communications, earlier this month, decided to terminate its American Depository Receipt ( ADR) programme and delist from the NYSE to meet the public shareholding norm. Currently, the promoter holding is 80.15 per cent, as its ADRs, which amount to nearly five per cent of the shares, are not considered public holding. After the NYSE delisting, the promoter holding will come down to 76.15 per cent. Managing Director Vinod Kumar, in a results' conference call today, said the promoters would take more steps to bring their holding down to 75 per cent.
Earlier this month, Sebi had approved a unique proposal, of transferring promoter holding to a philanthropic trust by the Azim Premji- led Wipro to achieve the public shareholding requirement. The information technology company had taken the approval to transfer promoter holding in excess of 75 per cent in Wipro to an 'Irrevocable Independent Trust', to carry out philanthropy. Certain companies, Gammon Infrastructure being one, issued bonus shares to only non- promoter shareholders to bring down promoter stake to below 75 per cent. Some foreign owner- backed companies such as Gillette India and Gokaldas Exports were seen to classify some promoters as non- promoters to achieve 25 per cent public shareholding. However, this method didn't go down well with Sebi.
People close to the development said in the run up to the expiry of the deadline, the regulator had been flooded with various ' strange' requests from companies and their lawyers. While some sought relaxation on the share- sale norms, others wanted permission for an ' out of the box' idea, said a source.
One such representation made to Sebi was to allow an extension, especially to multinational companies, citing the country's current account deficit (CAD) problem. The logic being, foreign promoters would repatriate the capital raised by conducting stake sales to their home country, thus straining the country's CAD.
In recent weeks, about a dozen companies have lowered their promoter shareholding and another half a dozen have lined up share sales. Still, at least 40 private companies have promoter holding in excess of 75 per cent and about a dozen public sector companies have government ownership of over 90 per cent. The deadline for private companies to meet the minimum public shareholding expires on Monday. PSUs have time till August to have at least 10 per cent public shareholding. THE ROAD LESS TRAVELLED
Some firms have taken innovative routes to meet public shareholding
Tata Communications: Delisting from NYSE, terminating ADRs Wipro: Scheme of demerger & transfer of shares to trust Gammon Infra, Westlife Development & Pentokey Organy: Issue of bonus shares to public shareholders
Gillette India and Gokaldas Exports: Declassification of promoters as public shareholders
MOHANTY
India Inc petitions Sebi with ideas as deadline nears, quite a few of these being unconventional
Sebi promises speedier actions with greater powers
PRESS TRUST OF INDIA
Mumbai, 28 May
Pitching for a major overhaul of the powers it has got to deal with market manipulators, the Securities and Exchange Board of India ( Sebi) says there is an urgent need to carry out these changes to ensure speedier probes and fast- track prosecution of culprits. The capital markets watchdog has asked the government to empower it to carry out search and seizure operations, to attach properties and to seek information and records for all relevant entities.
Besides, Sebi has also asked the government to streamline the procedures involved in enforcing its existing powers.
"At times, it has been difficult for us in many cases to move forward in the absence of these powers. Also, there are long procedures involved in executing many powers that we already have and we want those processes to be streamlined," Sebi Chairman U K Sinha said.
"The expectation is that once we get these powers, we would be able to move really fast on the investigations we undertake, and on the actions we need to take against the culprits and in bringing to book all the manipulators and others defrauding the investors," Sinha said.
________________________________
GST rollout only after next govt comes to power, says PM
SHYAMALMAJUMDAR
Tokyo, 28 May
The past six months might have seen a series of positive developments around the Goods and Services Tax ( GST), but its implementation will happen only after a new government comes to power after the elections in April next year.
Prime Minister Manmohan Singh said here today that there were difficulties in getting states to surrender their power to tax, and for GST to happen, a Constitutional amendment was required. " We will have elections in April 2014… I think there will be a strong effort by whichever government is in power that time to move towards the GST". The implementation was inevitable as there was a general agreement among professionals and all shades of opinion agreed that India needed GST to help its growth story, he added.
Singh was replying to a question on whether he could give a timeline to the implementation of GST at a luncheon organised by The Japan Business Federation, commonly referred to as Keidanren, and the IndoJapan Business Leaders Forum.
GST, a tax reform that seeks to create one common market for all goods and services in India, has been long delayed due to differences between the Centre and states over its design and issue of central sales tax compensation. Singhs statement is a tacit acknowledgement of the fact that such an amendment looked difficult in a deeply divided Parliament.
The Prime Minister, however, was in a relaxed mood throughout and even cracked jokes while replying to questions from the audience comprising some of the biggest names in Japan and India Inc. When a Sumitomo Mitsui Banking Corporation executive wanted to know some specific details on relaxation of priority sector lending norms, Singh advised the gentleman to address the question to the finance ministry and the Reserve Bank of India. " I am sure you know about the saying that the higher you go, the lesser you know," he said. The applause simply refused to die down.
In response to another question, Singh said he was repeatedly told that Japanese companies ranked India the most promising long- term destination.
Yet, he, found out India accounted for only four per cent of total Japanese outward investment flow into Asia.
When someone wanted to know the reasons for the inordinate delay in clearing bottlenecks in India, Singh said its better to take a considered view as "sometimes the best can be the enemy of the good". The audience was amused, though it didn't look too impressed this time. Singh assured Japanese banks that their proposal for more freedom on opening of branches would be considered as he personally believed they added net value to the country. On the demand to relax priority sector lending norms, Singh, however, took a tough stand. Pointing out that some specific cases could be considered as he wanted more Japanese banks to come into India, he said foreign banks should also learn to adjust to the environment in the countries they operate in order to gain more acceptability.
Singh reiterated his vision that the Indian economy would soon bounce back to eight per cent annual growth, creating enormous opportunities for Japanese business. On the basis for his confidence, Singh said " a capital output ratio of 4: 1, a savings rate of over 30 per cent and an investment rate of 35 per cent will easily yield a growth rate of about eight per cent." Singh said India has targeted an investment of around $ 1 trillion in infrastructure over the 12thPlan period with half of it coming from the private sector and public- private partnership. He hoped Japanese business will pick up a large share of the investment opportunities. For this, he was willing to consider innovative solutions.
He was however non- committal on Japan's offer for financial and technical support for a detailed project report for the Mumbai- Ahmedabad high speed railway route.
Later, speaking at a meeting of the Japan- India Association in the evening, Singh mentioned his Japanese counterpart Shinzo Abe's speech in the Indian Parliament in 2007, when he spoke of the " confluence of the two seas" — the Pacific and the Indian oceans — which has defined the new framework for the bilateral relationship.
Singh suggested three areas of cooperation — strengthening regional forums that will help develop habits of consultation and cooperation; promotion of wider and deeper economic integration; and focus on maritime security across the linked regions of the Indian and Pacific oceans.
"Our relationship with Japan has been at the heart of our Look East Policy. Japan inspired Asias surge to prosperity and it remains integral to Asia's future. The world has a huge stake in Japan's success," the Prime Minister said.
Another neighbour of India would be listening to at least this part quite keenly.
Singh says India accounts for just 4% of total Japanese investment in Asia
PM Manmohan Singh ( left) with his Japanese counterpart Shinzo
Abe, at Abe's official residence in Tokyo on Tuesday PHOTO: REUTERS
PADMA AWARD IN TOKYO
Hotel Oreku in Tokyo was the venue of an unusual ceremony on Tuesday: Prime Minister Manmohan Singh conferred the Padma Shri award on Noburu Karashima, an eminent Japanese scholar, for his contribution in literature and education.
Karashima, who had spent several years as a research scholar and is an acknowledged authority on medieval South Indian inscriptions, could not be present for the award ceremony in New Delhi last month for health reasons. As the PM and the amiable professor bowed to each other, there was a standing ovation from the 1,000- plus crowd
RICH HOUSE
Its not the Japanese economy alone that is feeling good about Abenomics. The elected representatives are feeling good, too. According to a weekly survey, the assets of the Lower House lawmakers have grown for the first time since 1993. Since the previous survey in 2010, the average value of assets held by the 184 lawmakers has nearly doubled to ¥ 22.9 million
LOW STOCK
The Nikkei has been down over the past few days after a stupendous rise ever since Abenomics came into being. But it seems the average Japanese couldnt care less. Shares represent only seven per cent of household financial assets, compared with more than one quarter in the US. Four- fifths of Japanese households have never owned a security and 88 per cent have never invested in a mutual fund, according to the Japan Securities Dealers Association. Indians are in good company JAPAN DIARY
Ingenuity in meeting public holding norm
SAMIE MODAK
Mumbai, 28 May
Ideas have not been a constraint for the many Indian companies looking to comply with next week's deadline for the minimum public shareholder norms. While the bulk have taken the conventionally popular offer- for- sale ( OFS) route to pare promoter holding below 75 per cent, some have taken atypical routes.
These include winding up of depository receipt programmes, free bonus shares to minority shareholders and moving excess promoter holding to a philanthropic trust. OFS apart, the Securities and Exchange Board of India ( Sebi) has prescribed other means such as an Institutional Placement Programme ( IPP), a rights offering and bonus issues for companies. The regulator has also said it would, on a case- bycase basis, consider any other route requested by firms. Some of these did not want to sell stake to investors due to unfavourable market conditions.
For instance, Tata Communications, earlier this month, decided to terminate its American Depository Receipt ( ADR) programme and delist from the NYSE to meet the public shareholding norm. Currently, the promoter holding is 80.15 per cent, as its ADRs, which amount to nearly five per cent of the shares, are not considered public holding. After the NYSE delisting, the promoter holding will come down to 76.15 per cent. Managing Director Vinod Kumar, in a results' conference call today, said the promoters would take more steps to bring their holding down to 75 per cent.
Earlier this month, Sebi had approved a unique proposal, of transferring promoter holding to a philanthropic trust by the Azim Premji- led Wipro to achieve the public shareholding requirement. The information technology company had taken the approval to transfer promoter holding in excess of 75 per cent in Wipro to an 'Irrevocable Independent Trust', to carry out philanthropy. Certain companies, Gammon Infrastructure being one, issued bonus shares to only non- promoter shareholders to bring down promoter stake to below 75 per cent. Some foreign owner- backed companies such as Gillette India and Gokaldas Exports were seen to classify some promoters as non- promoters to achieve 25 per cent public shareholding. However, this method didn't go down well with Sebi.
People close to the development said in the run up to the expiry of the deadline, the regulator had been flooded with various ' strange' requests from companies and their lawyers. While some sought relaxation on the share- sale norms, others wanted permission for an ' out of the box' idea, said a source.
One such representation made to Sebi was to allow an extension, especially to multinational companies, citing the country's current account deficit (CAD) problem. The logic being, foreign promoters would repatriate the capital raised by conducting stake sales to their home country, thus straining the country's CAD.
In recent weeks, about a dozen companies have lowered their promoter shareholding and another half a dozen have lined up share sales. Still, at least 40 private companies have promoter holding in excess of 75 per cent and about a dozen public sector companies have government ownership of over 90 per cent. The deadline for private companies to meet the minimum public shareholding expires on Monday. PSUs have time till August to have at least 10 per cent public shareholding. THE ROAD LESS TRAVELLED
Some firms have taken innovative routes to meet public shareholding
Tata Communications: Delisting from NYSE, terminating ADRs Wipro: Scheme of demerger & transfer of shares to trust Gammon Infra, Westlife Development & Pentokey Organy: Issue of bonus shares to public shareholders
Gillette India and Gokaldas Exports: Declassification of promoters as public shareholders
MOHANTY
India Inc petitions Sebi with ideas as deadline nears, quite a few of these being unconventional
Sebi promises speedier actions with greater powers
PRESS TRUST OF INDIA
Mumbai, 28 May
Pitching for a major overhaul of the powers it has got to deal with market manipulators, the Securities and Exchange Board of India ( Sebi) says there is an urgent need to carry out these changes to ensure speedier probes and fast- track prosecution of culprits. The capital markets watchdog has asked the government to empower it to carry out search and seizure operations, to attach properties and to seek information and records for all relevant entities.
Besides, Sebi has also asked the government to streamline the procedures involved in enforcing its existing powers.
"At times, it has been difficult for us in many cases to move forward in the absence of these powers. Also, there are long procedures involved in executing many powers that we already have and we want those processes to be streamlined," Sebi Chairman U K Sinha said.
"The expectation is that once we get these powers, we would be able to move really fast on the investigations we undertake, and on the actions we need to take against the culprits and in bringing to book all the manipulators and others defrauding the investors," Sinha said.
Tuesday, May 28, 2013
4 hours CPE program on 31st May 2013
4 hours CPE program to be held on
31st May at Mehfil from 3:30 PM.
The topics of discussion and speakers are:
1. Salient features of the New Companies Act- By CA Manu Agarwal
2. Voluntary Disclosure Scheme under the Service Tax Act - By CA Dharmendra
Srivastava
Fees for members of KCASSC : Nil
Fees for members of Non KCASSC : Rs 200
--
Himanshu Kapoor
B Com FCA PGDCA DISA(ISA)
C/O Kapoor Tandon & Co.
Chartered Accountants
24/57 Birhana Road
Kanpur-208001
Mob:9935030768
31st May at Mehfil from 3:30 PM.
The topics of discussion and speakers are:
1. Salient features of the New Companies Act- By CA Manu Agarwal
2. Voluntary Disclosure Scheme under the Service Tax Act - By CA Dharmendra
Srivastava
Fees for members of KCASSC : Nil
Fees for members of Non KCASSC : Rs 200
--
Himanshu Kapoor
B Com FCA PGDCA DISA(ISA)
C/O Kapoor Tandon & Co.
Chartered Accountants
24/57 Birhana Road
Kanpur-208001
Mob:9935030768
Friday, May 24, 2013
HIRING SERVICES OF CHARTERED ACCOUNTANT FIRM FORSTATUTORY AUDIT OF STATE HEALTH SOCIETY (SHS) ANDDISTRICT HEALTH SOCIETY (DHS) FOR THE FINANCIAL YEAR 2012-13 UNDER NATIONAL RURAL HEALTH MISSION (NRHM)
National Rural Health Mission - Thiruvananthapuram
Last Date : 25/05/2013
HIRING SERVICES OF CHARTERED ACCOUNTANT FIRM FORSTATUTORY AUDIT OF STATE HEALTH SOCIETY (SHS) ANDDISTRICT HEALTH SOCIETY (DHS) FOR THE FINANCIAL YEAR 2012-13 UNDER NATIONAL RURAL HEALTH MISSION (NRHM)
Address: National Rural Health Mission General Hospital Junction.Thiruvananthapuram 695035,
Phone: 0471 2301181
Email: nrhmfinance@gmail.com
Last Date : 25/05/2013
HIRING SERVICES OF CHARTERED ACCOUNTANT FIRM FORSTATUTORY AUDIT OF STATE HEALTH SOCIETY (SHS) ANDDISTRICT HEALTH SOCIETY (DHS) FOR THE FINANCIAL YEAR 2012-13 UNDER NATIONAL RURAL HEALTH MISSION (NRHM)
Address: National Rural Health Mission General Hospital Junction.Thiruvananthapuram 695035,
Phone: 0471 2301181
Email: nrhmfinance@gmail.com
New CAG Takes Over - Appointment Challenged
SHASHI Kant
Sharma, a 1976 batch IAS officer has taken over as the new Comptroller
and Auditor General (CAG) of India, succeeding the controversial Vinod
Rai. Rai had taken the CAG's office into dizzy heights of prominence
with a couple of ministerial heads rolling down into Tihar supposedly
because of his reports.
The
CAG is an over rated institution believed to have constitutional powers
and was in existence since 1860. He is
PROBLEMS WITH E & Y AUDITS
The Public Company Accounting Oversight Board released non-public sections of its 2010 report on Ernst & Young regarding the firm's quality control inspection. The regulator found an additional six auditing engagements with deficiencies. The report outlined problems in several areas, including supervision, review, and professional skepticism. In addition, the PCAOB found nine instances where the auditors had identified a fraud risk, but Ernst & Young did not sufficiently address the risk
1% Withholding Tax on immovable property
*The Finance Minister succinctly introduced the withholding tax regime for
immovable property transactions in the Finance Act, 2013. The said Regime
mandates tax withholding @ 1% (plus surcharge and education cess) by the
transferee from payments made to the transferor in relation to transactions
to immovable properties exceeding INR 5 million. *
immovable property transactions in the Finance Act, 2013. The said Regime
mandates tax withholding @ 1% (plus surcharge and education cess) by the
transferee from payments made to the transferor in relation to transactions
to immovable properties exceeding INR 5 million. *
RRB audit fee revised by NABARD wef F.Yr. 2012-2013
As per information received (Authentic Circular awaited), RRB audit fee revised by NABARD vide circ.No.-NB.IDD.RRCBD.BMBL/323-D/2013-14 dt.22.5.13. All RRB auditor's will get fee for 2012-13 as per revised rates.
At least some increase in fees and major relief is that TA & DA expenses have now come more or less at Par with audit of PSB.
RRB branch audit fee before revision
1 Upto Rs.1.0 crore 2900
2 Above Rs.1.0 crore to Rs.3.0 crore 3100
3 Above Rs.3.0 crore to Rs.5.0 crore 3900
4 Above Rs.5.0 crore to Rs.7.5 crore 4700
5 Above Rs.7.5 crore 5500
RRB branch audit fee after revision (Slabs has also been revised)
Sr
No Quantum of Loans & Advances of the concerned branch (Excluding Inter branch advances) Audit fee
(Rs.)
1 Upto Rs.2.50 crore 3875
2 Above Rs.2.50 crore to Rs.5.0 crore 4875
3 Above Rs.5.0 crore to Rs.8.0 crore 5875
4 Above Rs.8.0 crore 6875
At least some increase in fees and major relief is that TA & DA expenses have now come more or less at Par with audit of PSB.
RRB branch audit fee before revision
1 Upto Rs.1.0 crore 2900
2 Above Rs.1.0 crore to Rs.3.0 crore 3100
3 Above Rs.3.0 crore to Rs.5.0 crore 3900
4 Above Rs.5.0 crore to Rs.7.5 crore 4700
5 Above Rs.7.5 crore 5500
RRB branch audit fee after revision (Slabs has also been revised)
Sr
No Quantum of Loans & Advances of the concerned branch (Excluding Inter branch advances) Audit fee
(Rs.)
1 Upto Rs.2.50 crore 3875
2 Above Rs.2.50 crore to Rs.5.0 crore 4875
3 Above Rs.5.0 crore to Rs.8.0 crore 5875
4 Above Rs.8.0 crore 6875
Non-agricultural property even in a remote village is a “capital asset”
On 20th Feb 2013, ITAT bench held that Non-agricultural property, whether inside the municipality or outside
the municipality or even in a remote village is a "capital asset" and transfer
of the same may generate income liable for capital gains taxation.
The assessee had sold twelve pieces
of land belonging to him to M/s. Pallanishamy Properties Pvt. Ltd. for a
consideration of 26,40,00,000/-. All the parcels of land are contiguously
situated at Padur Village. The parcels of land sold by the assessee in the
previous year relevant to the assessment year under appeal, were purchased by
the assessee over a period of ten years from 1980 to 1991. The assessee did not
offer any income for taxation by way of long-term capital gains on account of
sale of lands, as stated above. The claim of the assessee before the Assessing
Officer was that the lands sold by him were agricultural land and, therefore,
not a capital asset exigible to capital gains taxation.
The AO summoned the Village
Administrative Officer and obtained a sworn statement on 9.12.2011. In his
statement given before the AO, the Village Administrative Officer made it clear
that the lands sold, belonged to the assessee but he did not carry on any
agricultural activities at the time of selling the lands. He also stated that
as per the land records, the assessee had not carried on any agricultural
activities for so many years in the past. He also stated that the assessee has
not paid local land cess, land cess surcharges and water charges for the lands
sold by him, as is otherwise required in the case of agricultural lands. He
also stated that agricultural activities were not carried out, not only in
assessee's property but also in surrounding properties. He further stated that
even though the land was classified as agricultural land, no agricultural
activities were being carried out in the area because of development of real
estate business. He further stated that the assessee still holds lands unsold
and those unsold lands were also not used for agricultural purposes.
Assessee before AO stated that the
lands are classified as agricultural lands in revenue records as nanjai and punjai
lands and this classification establishes that the lands were agricultural in
nature. After the sale of lands, the purchasers might have developed the lands
but that does not alter the character of the lands before its sale. The
assessee explained that when the lands were sold by him, they were agricultural
in nature and, therefore, the lands did not partake the character of capital
asset.
Assessing Officer held that the
properties sold by the assessee were not agricultural in nature. Accordingly, he
computed the long term capital gains at 26,16,06,595/- arising out of the sale
of lands made by the assessee for a consideration of 26,40,00,000/-.
CIT(A) accepted the contentions
of the assessee and held that the properties sold by the assessee were
agricultural in nature.
Aggrieved by the order passed by
Ld. CIT(A), revenue appeal before ITAT
Whether a particular land is agricultural or not, is basically a
question of fact.
ITAT bench observed that the core
of the arguments of the assessee is on the classification of the land in revenue
records. But, that alone does not conclusively prove the nature of the land
sold by the assessee, as other evidences are shadowing the said presumption
prima facie created by the entry made in the revenue records. The properties
were in fact, purchased over a period of ten years since 1980. At the time of purchase
of these parcels of land, they might have been agricultural lands. That is why
the land parcels are classified in the revenue records as agricultural lands.
That position was continued in a religious manner without any annual
verification of the nature of the property. But, the character of the land sold
by the assessee has been explained by the Village Administrative Officer in
unequivocal terms in his statement given under sec. 131 before the assessing
authority. The Village Administrative Officer has stated that not only for the
impugned previous year but also for so many earlier previous years, no
agricultural activities were carried out in that area. The assessee as well as
the owners of surrounding properties were not in fact carrying on any agricultural
activities. The statement given by the Village Administrative Officer is very
exhaustive and descriptive. He has stated the reasons as to why the
agricultural activities were not being carried out on those properties.
Because of urbanization, the
properties, real estate development has started taking place in that area as
well. Four educational institutions have been set up in the area within a short
period. A lot of private and commercial buildings are constructed. Because of
the boom of the real estate development, the entire contingent of that land has
become subject matter of transactions intended for the purpose of real
estate development. In that
background no agricultural activities were being carried out in that area. The
case of the assessee is also not an exception.
The past history of the land
alone is not the deciding factor. Once upon a time the land might have been
used for agricultural operations. In that way of speaking, almost all parts of Chennai
Metropolis might be agricultural or marshy land in good old past. Therefore,
history is not the only test to be applied to decide the character of the land
at the time of sale. A temporary stoppage in the agricultural activities
carried on by an assessee also should not go against an assessee. For one or
other reason, an assessee may not be carrying on agricultural operations for
one or two years, he might be carrying on agricultural operations for all the
years in a consistent manner. In such cases, it is not possible to hold that
non carrying on agricultural operations for one or two years permanently
changes the character of the land.
It is not a case of intermittent stoppage
of agricultural operations. It is a case of permanent stoppage of agricultural
operations in the light of real estate development taking place in the
particular area. Therefore, by
virtue of not carrying on
agricultural activities for a quiet long time in the past, the character of the
land occupied by the assessee has been naturally converted into a
non-agricultural land.
ITAT further observed that in the
context of agricultural operations, it is necessary to see that the
agricultural operations carried on by the assessee must be activity of economic
gain. It must generate meaningful income to the person who is carrying on
agricultural activities. If the agricultural activities carried on by the
assessee as a hobby or casual or incidental, it is very difficult to hold a
view that the land is agricultural in nature.
In fact, the assessee had started
purchasing the land since 1980. He continued to purchase the land till 1991.
Since then upto the assessment year 2003-04, the assessee had not returned any
agricultural income. The assessee started filing returns for the assessment
years 2004-05 to 2008-09. We cannot rule out that this was only a ploy carried out
by the assessee to make an impression before the tax authorities that the
assessee's land was agricultural in nature, so that the assessee can claim the
benefit of agricultural land, when the lands are sold, in view of high demand
of land in the area and in view of hectic activities of real estate
development.
the agricultural land sold by the
assessee had a market value of more than 6 crores per acre. It is unheard of.
It clearly illustrates that the land has become an non-agricultural land with
high market potential for real estate development, not all of a sudden in the previous
year relevant to the assessment year under appeal but over a period of long
years in the past.
Held, the lands sold by the
assessee in the previous year relevant to the assessment year under appeal for
a consideration of 26,40,00,000/- were not agricultural in nature, but, on the
other hand, they are non-agricultural land. Therefore, it definitely comes
under the category of "capital asset". Accordingly, the gains arising out of transfer
of that capital asset is exigible to capital gains tax.
A non-agricultural property,
whether inside the municipality or outside the municipality or even in a remote
village is a "capital asset" and transfer of the same may generate income
liable for capital gains taxation.
-
the municipality or even in a remote village is a "capital asset" and transfer
of the same may generate income liable for capital gains taxation.
The assessee had sold twelve pieces
of land belonging to him to M/s. Pallanishamy Properties Pvt. Ltd. for a
consideration of 26,40,00,000/-. All the parcels of land are contiguously
situated at Padur Village. The parcels of land sold by the assessee in the
previous year relevant to the assessment year under appeal, were purchased by
the assessee over a period of ten years from 1980 to 1991. The assessee did not
offer any income for taxation by way of long-term capital gains on account of
sale of lands, as stated above. The claim of the assessee before the Assessing
Officer was that the lands sold by him were agricultural land and, therefore,
not a capital asset exigible to capital gains taxation.
The AO summoned the Village
Administrative Officer and obtained a sworn statement on 9.12.2011. In his
statement given before the AO, the Village Administrative Officer made it clear
that the lands sold, belonged to the assessee but he did not carry on any
agricultural activities at the time of selling the lands. He also stated that
as per the land records, the assessee had not carried on any agricultural
activities for so many years in the past. He also stated that the assessee has
not paid local land cess, land cess surcharges and water charges for the lands
sold by him, as is otherwise required in the case of agricultural lands. He
also stated that agricultural activities were not carried out, not only in
assessee's property but also in surrounding properties. He further stated that
even though the land was classified as agricultural land, no agricultural
activities were being carried out in the area because of development of real
estate business. He further stated that the assessee still holds lands unsold
and those unsold lands were also not used for agricultural purposes.
Assessee before AO stated that the
lands are classified as agricultural lands in revenue records as nanjai and punjai
lands and this classification establishes that the lands were agricultural in
nature. After the sale of lands, the purchasers might have developed the lands
but that does not alter the character of the lands before its sale. The
assessee explained that when the lands were sold by him, they were agricultural
in nature and, therefore, the lands did not partake the character of capital
asset.
Assessing Officer held that the
properties sold by the assessee were not agricultural in nature. Accordingly, he
computed the long term capital gains at 26,16,06,595/- arising out of the sale
of lands made by the assessee for a consideration of 26,40,00,000/-.
CIT(A) accepted the contentions
of the assessee and held that the properties sold by the assessee were
agricultural in nature.
Aggrieved by the order passed by
Ld. CIT(A), revenue appeal before ITAT
Whether a particular land is agricultural or not, is basically a
question of fact.
ITAT bench observed that the core
of the arguments of the assessee is on the classification of the land in revenue
records. But, that alone does not conclusively prove the nature of the land
sold by the assessee, as other evidences are shadowing the said presumption
prima facie created by the entry made in the revenue records. The properties
were in fact, purchased over a period of ten years since 1980. At the time of purchase
of these parcels of land, they might have been agricultural lands. That is why
the land parcels are classified in the revenue records as agricultural lands.
That position was continued in a religious manner without any annual
verification of the nature of the property. But, the character of the land sold
by the assessee has been explained by the Village Administrative Officer in
unequivocal terms in his statement given under sec. 131 before the assessing
authority. The Village Administrative Officer has stated that not only for the
impugned previous year but also for so many earlier previous years, no
agricultural activities were carried out in that area. The assessee as well as
the owners of surrounding properties were not in fact carrying on any agricultural
activities. The statement given by the Village Administrative Officer is very
exhaustive and descriptive. He has stated the reasons as to why the
agricultural activities were not being carried out on those properties.
Because of urbanization, the
properties, real estate development has started taking place in that area as
well. Four educational institutions have been set up in the area within a short
period. A lot of private and commercial buildings are constructed. Because of
the boom of the real estate development, the entire contingent of that land has
become subject matter of transactions intended for the purpose of real
estate development. In that
background no agricultural activities were being carried out in that area. The
case of the assessee is also not an exception.
The past history of the land
alone is not the deciding factor. Once upon a time the land might have been
used for agricultural operations. In that way of speaking, almost all parts of Chennai
Metropolis might be agricultural or marshy land in good old past. Therefore,
history is not the only test to be applied to decide the character of the land
at the time of sale. A temporary stoppage in the agricultural activities
carried on by an assessee also should not go against an assessee. For one or
other reason, an assessee may not be carrying on agricultural operations for
one or two years, he might be carrying on agricultural operations for all the
years in a consistent manner. In such cases, it is not possible to hold that
non carrying on agricultural operations for one or two years permanently
changes the character of the land.
It is not a case of intermittent stoppage
of agricultural operations. It is a case of permanent stoppage of agricultural
operations in the light of real estate development taking place in the
particular area. Therefore, by
virtue of not carrying on
agricultural activities for a quiet long time in the past, the character of the
land occupied by the assessee has been naturally converted into a
non-agricultural land.
ITAT further observed that in the
context of agricultural operations, it is necessary to see that the
agricultural operations carried on by the assessee must be activity of economic
gain. It must generate meaningful income to the person who is carrying on
agricultural activities. If the agricultural activities carried on by the
assessee as a hobby or casual or incidental, it is very difficult to hold a
view that the land is agricultural in nature.
In fact, the assessee had started
purchasing the land since 1980. He continued to purchase the land till 1991.
Since then upto the assessment year 2003-04, the assessee had not returned any
agricultural income. The assessee started filing returns for the assessment
years 2004-05 to 2008-09. We cannot rule out that this was only a ploy carried out
by the assessee to make an impression before the tax authorities that the
assessee's land was agricultural in nature, so that the assessee can claim the
benefit of agricultural land, when the lands are sold, in view of high demand
of land in the area and in view of hectic activities of real estate
development.
the agricultural land sold by the
assessee had a market value of more than 6 crores per acre. It is unheard of.
It clearly illustrates that the land has become an non-agricultural land with
high market potential for real estate development, not all of a sudden in the previous
year relevant to the assessment year under appeal but over a period of long
years in the past.
Held, the lands sold by the
assessee in the previous year relevant to the assessment year under appeal for
a consideration of 26,40,00,000/- were not agricultural in nature, but, on the
other hand, they are non-agricultural land. Therefore, it definitely comes
under the category of "capital asset". Accordingly, the gains arising out of transfer
of that capital asset is exigible to capital gains tax.
A non-agricultural property,
whether inside the municipality or outside the municipality or even in a remote
village is a "capital asset" and transfer of the same may generate income
liable for capital gains taxation.
-
IMF HEAD IN FRAUD PROBE
IMF head Lagarde in court over fraud probe
PARIS, MAY 23:
International Monetary Fund chief Christine Lagarde is facing questions at a special Paris court Thursday over her role in the 400 million euro ($520 million) pay-off to a controversial businessman when she was France's finance minister.
The court hearing threatens to sully the reputations of both Lagarde and France. The payment was made to well-connected entrepreneur Bernard Tapie as part of a private arbitration process to settle a dispute with state-owned bank Credit Lyonnais over the botched sale of Adidas in the 1990s.
It is seen by many in France as an example of the cozy relationship between big money and big power in France.
Lagarde has earned praise for her negotiating skills as managing director of the IMF through Europe's debt crisis and is seen as a trailblazer for women leaders. Her decision to let the Adidas dispute go to private arbitration rather than be settled in the courts has drawn criticism, and French lawmakers asked magistrates to investigate.
Lagarde, smiling at reporters, left her Paris apartment this morning and appeared at a special court that handles cases involving government ministers. She has denied wrongdoing.
At a press briefing today in Washington, IMF spokesman Gerry Rice said its executive board, at Lagarde's request, had already waived her diplomatic immunity to the extent necessary to enable her to appear before French authorities in the case.
"The executive board has been briefed on this matter, including recently, and continues to express its confidence in the managing director's ability to effectively carry out her duties," he said.
At the time of the payment, Tapie was close to then-French President Nicolas Sarkozy, who was Lagarde's boss. Critics have said the deal was too generous to Tapie at the expense of the French state, and that the case shouldn't have gone to a private arbitration authority because it involved a state-owned bank.
Investigators opened an inquiry in 2011 into possible charges of "complicity to embezzlement of public funds" and "complicity to forgery." The probe may not result in a trial.
If it does, and if Lagarde were to be convicted, she could face up to 10 years in prison, according to prosecutors.
PARIS, MAY 23:
International Monetary Fund chief Christine Lagarde is facing questions at a special Paris court Thursday over her role in the 400 million euro ($520 million) pay-off to a controversial businessman when she was France's finance minister.
The court hearing threatens to sully the reputations of both Lagarde and France. The payment was made to well-connected entrepreneur Bernard Tapie as part of a private arbitration process to settle a dispute with state-owned bank Credit Lyonnais over the botched sale of Adidas in the 1990s.
It is seen by many in France as an example of the cozy relationship between big money and big power in France.
Lagarde has earned praise for her negotiating skills as managing director of the IMF through Europe's debt crisis and is seen as a trailblazer for women leaders. Her decision to let the Adidas dispute go to private arbitration rather than be settled in the courts has drawn criticism, and French lawmakers asked magistrates to investigate.
Lagarde, smiling at reporters, left her Paris apartment this morning and appeared at a special court that handles cases involving government ministers. She has denied wrongdoing.
At a press briefing today in Washington, IMF spokesman Gerry Rice said its executive board, at Lagarde's request, had already waived her diplomatic immunity to the extent necessary to enable her to appear before French authorities in the case.
"The executive board has been briefed on this matter, including recently, and continues to express its confidence in the managing director's ability to effectively carry out her duties," he said.
At the time of the payment, Tapie was close to then-French President Nicolas Sarkozy, who was Lagarde's boss. Critics have said the deal was too generous to Tapie at the expense of the French state, and that the case shouldn't have gone to a private arbitration authority because it involved a state-owned bank.
Investigators opened an inquiry in 2011 into possible charges of "complicity to embezzlement of public funds" and "complicity to forgery." The probe may not result in a trial.
If it does, and if Lagarde were to be convicted, she could face up to 10 years in prison, according to prosecutors.
Thursday, May 23, 2013
Tax Residency Certificate (TRC) – In its new version
Tax Residency Certificate (TRC) – In its new version
*Prashant Apte*
*Synopsis- Provisions of requirement of Tax Residency Certificate were
introduced last year. The Finance Minister has attempted to make changes to
the existing provisions. The author analyses the changes that are proposed
and the possible effects.
*
*1. Introduction.*
Claim of treaty benefit by an assessee has always remained fraught with
uncertainties and controversies. Till 2012 there was no provision in the Income
tax Act providing for production of a Tax Residency Certificate (TRC) for
claiming the tax treaty benefit. This was neither a precondition mentioned
in the tax treaties entered into by India. Tax Officershowever in most
cases did insist for a TRC while examining the treaty benefit claim.
Tax Officerswere by and large accepting TRC provided by the respective
countries' tax authorities.
Last year, the requirement for a TRC, was provided as a necessary condition
for claiming tax treatybenefit. The memorandum explaining this amendment stated
TRC containing specified particulars as may be necessary but not a
sufficient condition for availing tax treaty benefits. The revenue
authorities issued rules notifying the details that were to be contained in
the certificate which were as under.
1. Name of the assessee
2. Status of the assesse
3. Nationality (in case of individuals)
4. Country of incorporation/registration
5. Assessee's Tax Identification number
6. Residential Status for the purpose of tax
7. Period for which the certificate is applicable
8. Address of the applicant for the period for which the certificate is
applicable
The certificate was to be verified by the tax authorities of the respective
countries.
In practice however it is observed that not all countries' tax authorities
change their format of TRC and certify the above details. Mostly, it was
observed that status, country of incorporation/registration and validity
period of the certificate, were not certified. This could have caused
hardship to genuine claims for tax treaty benefit.*
*
*2. **Amendment proposed*
The Finance Bill 2013 generated further controversy by proposing to
introduce the language of the Memorandum of Finance Bill 2012 into the Act
viz. TRC will not be sufficient condition for claim of the tax
treaty benefit. The claim of tax treaty benefit thus would have become a
difficult exercise.
However, while moving the Finance Bill 2013 in Lok Sabha, amendments were
proposed to the Finance Bill by deleting the above amendment and
introduction of changes in the language of the existing provisions relating
to TRC.
Now, the proposal requires that a TRC issued by tax authorities of the
respective country will have to be provided to claim tax treaty benefit.
The provision that TRC is not a sufficient condition has been dropped.
However, the catch remains that this amendment is coupled with another
requirement which requires that the concerned assessee has to produce such
other documents/information which will be notified later.
*3. Conclusion*
It appears this move is prompted due to the fact that the tax authorities
of many countries were not certifying all the above eight details rendering
the TRC incomplete on a strict reading of law.
With the new proposed amendment, it seems that the TRC can be of any format
so long as it certifies the tax residency of the non-resident assessee. It
also seems that the documents in respect of the above details may have to
be provided in order to claim the tax treaty benefit. However, this issue
remains uncertain as the documents are yet to be notified.
Overall the rules seem to be softening and a welcome move as against what
was proposed in the Finance Bill 2013 as introduced initially. If put
through in an assessee friendly manner, theseamendments will go a long way
in settling the uncertainty over the claim of the tax treaty benefit and
would in terms of the Finance Minister's promise given to the foreign
investors regarding stable tax regime.
*(Author is a Manager with Deloitte Haskins & Sells & Views expressed are
his personal views)*
*
*
*Prashant Apte*
*Synopsis- Provisions of requirement of Tax Residency Certificate were
introduced last year. The Finance Minister has attempted to make changes to
the existing provisions. The author analyses the changes that are proposed
and the possible effects.
*
*1. Introduction.*
Claim of treaty benefit by an assessee has always remained fraught with
uncertainties and controversies. Till 2012 there was no provision in the Income
tax Act providing for production of a Tax Residency Certificate (TRC) for
claiming the tax treaty benefit. This was neither a precondition mentioned
in the tax treaties entered into by India. Tax Officershowever in most
cases did insist for a TRC while examining the treaty benefit claim.
Tax Officerswere by and large accepting TRC provided by the respective
countries' tax authorities.
Last year, the requirement for a TRC, was provided as a necessary condition
for claiming tax treatybenefit. The memorandum explaining this amendment stated
TRC containing specified particulars as may be necessary but not a
sufficient condition for availing tax treaty benefits. The revenue
authorities issued rules notifying the details that were to be contained in
the certificate which were as under.
1. Name of the assessee
2. Status of the assesse
3. Nationality (in case of individuals)
4. Country of incorporation/registration
5. Assessee's Tax Identification number
6. Residential Status for the purpose of tax
7. Period for which the certificate is applicable
8. Address of the applicant for the period for which the certificate is
applicable
The certificate was to be verified by the tax authorities of the respective
countries.
In practice however it is observed that not all countries' tax authorities
change their format of TRC and certify the above details. Mostly, it was
observed that status, country of incorporation/registration and validity
period of the certificate, were not certified. This could have caused
hardship to genuine claims for tax treaty benefit.*
*
*2. **Amendment proposed*
The Finance Bill 2013 generated further controversy by proposing to
introduce the language of the Memorandum of Finance Bill 2012 into the Act
viz. TRC will not be sufficient condition for claim of the tax
treaty benefit. The claim of tax treaty benefit thus would have become a
difficult exercise.
However, while moving the Finance Bill 2013 in Lok Sabha, amendments were
proposed to the Finance Bill by deleting the above amendment and
introduction of changes in the language of the existing provisions relating
to TRC.
Now, the proposal requires that a TRC issued by tax authorities of the
respective country will have to be provided to claim tax treaty benefit.
The provision that TRC is not a sufficient condition has been dropped.
However, the catch remains that this amendment is coupled with another
requirement which requires that the concerned assessee has to produce such
other documents/information which will be notified later.
*3. Conclusion*
It appears this move is prompted due to the fact that the tax authorities
of many countries were not certifying all the above eight details rendering
the TRC incomplete on a strict reading of law.
With the new proposed amendment, it seems that the TRC can be of any format
so long as it certifies the tax residency of the non-resident assessee. It
also seems that the documents in respect of the above details may have to
be provided in order to claim the tax treaty benefit. However, this issue
remains uncertain as the documents are yet to be notified.
Overall the rules seem to be softening and a welcome move as against what
was proposed in the Finance Bill 2013 as introduced initially. If put
through in an assessee friendly manner, theseamendments will go a long way
in settling the uncertainty over the claim of the tax treaty benefit and
would in terms of the Finance Minister's promise given to the foreign
investors regarding stable tax regime.
*(Author is a Manager with Deloitte Haskins & Sells & Views expressed are
his personal views)*
*
*
FAMILY PENSION TO SECOND WIFE
FAMILY PENSION TO SECOND WIFE
The employee is entitled to receive pensionary benefits as per the rules prevailing or the contract made between the employer and the employee. The employee after his retirement is entitled to receive pension till his death. In case of his death if he is survived by his wife she will be entitled to get family pension till her death. In this article a peculiar situation is discussed. A lady contracted second marriage with an employee while his first wife is alive who also gave consent to this second marriage. The first wife died. Whether the second wife will get family pension after the death of her husband? Answer for this question is discussed with the decided case law.
In `T. Stella V. Metropolitan Transport Corporation Limited represented by its Chairman and Managing Director, Chennai and another' – 2013 (5) TMI 509 - MADRAS HIGH COURT the husband of the petitioner, late Thulasilingam was employed as Light Vehicle Driver with Metropolitan Transport Corporation Limited from where he sought voluntary retirement. Prior to his retirement Shri Thulasilingam had contracted second marriage with the petitioner on 25.1.1975 while his first wife was alive. The second marriage was taken place with the consent of the first wife. The first wife died on 28.06.1980.
The children of the first wife were living with the deceased employee and petitioner jointly. The petitioner brought up the children of the first wife after the death of Thulasilingam on 2.6.1988. Till his death Thulasilingam was availing pension. After his death the petitioner in her capacity as the second wife applied for arrears of pension and also the amount due under Family Security Scheme which were paid on 15.4.1999. The petitioner also claimed for payment of family pension. She applied in Form 14 along with the legal heir certificate for sanction of family pension to her. She also produced necessary documents viz., marriage certificate, No objection certificate signed by the legal heirs of late Thulasilingam, death certificate of the first wife etc., Vide order dated 6.8.2007 the request of the petitioner for grant of family pension was rejected on the ground that being the second wife, the petitioner has no legal status to claim family pension.
Against this order the petitioner filed the present writ petition before the High Court, Madras challenging the said order as illegal and against law with the prayer to quash the impugned order as arbitrary and violative of the Article 14 of the Constitution. The petitioner submitted the following before the High Court:
The petitioner was treated to be the second wife of late Thulasilingam for the purpose of settlement of arrears and having accepted that she is the second wife, she could not be denied the family pension;
Once it was not disputed that after the death of first wife, the petitioner was living with her husband and children and has been declared as the legal heir of late Thulasilingam;
Once the legal heirs of the deceased gave no objection, there was no justification to deny the family pension to the petitioner, when it is proved on record, that the first wife had given her consent to late Thulasilingam to marry the petitioner;
The bar under the Hindu Marriage Act ceased to be operative after the death of first wife, therefore, her status became that of legally wedded wife as the petitioner continued to live as wife with late husband after the death of the first wife, therefore, pension cannot be denied to her.
The respondents, otherwise, contended that the petitioner is not entitled to the grant of family pension, because she was admittedly the second wife, therefore, her marriage was void in law. She is therefore not entitled to family pension. It was further contended that as per Rules applicable, the second wife is not entitled to family pension and merely because retirement benefits were settled in favor of the petitioner in view of no objection by other legal heirs, this cannot give right to get family pension.
The High Court framed the question to decide – `whether inview of admission by petitioner, that she was admittedly the second wife, could family pension be paid to her?'. The High Court held that the answer to this question is negative. The second wife has no legal status. According to the Hindu Law, the marriage during living spouse is void and gives no status to the second wife, though children born from such marriage get benefits at par with the legitimate children. The Court held that in this case it is not disputed that there is no child born from the wedlock between late Thulasilingam and the petitioner.
The High Court further held that the argument of the petitioner may be attractive but when seen in depth it has no legs to stand. The reading of Hindu Marriage Act shows that the second marriage, while first spouse is living, is not voidable but is void, therefore, mere death of the first wife cannot result in legalizing the second marriage or give the second wife with the status of wife.
The family pension is available to the widow of a person during her lifetime, therefore widow will always be the first wife, as there cannot be two widows for a person as law do not recognize two wives after coming into force of the Hindu Marriage Act. Further the petitioner herself admitted that she was only the second wife and was claiming rights as second wife. The High Court held that no error can be found with the impugned order, declining family pension to the petitioner. Merely because pensionary benefits were settled in favor of the petitioner, which in fact were to be paid to the children, who gave no objection for release of retirement benefits to her, cannot entitle her to claim family pension also.
By: Mr. M. GOVINDARAJAN
The employee is entitled to receive pensionary benefits as per the rules prevailing or the contract made between the employer and the employee. The employee after his retirement is entitled to receive pension till his death. In case of his death if he is survived by his wife she will be entitled to get family pension till her death. In this article a peculiar situation is discussed. A lady contracted second marriage with an employee while his first wife is alive who also gave consent to this second marriage. The first wife died. Whether the second wife will get family pension after the death of her husband? Answer for this question is discussed with the decided case law.
In `T. Stella V. Metropolitan Transport Corporation Limited represented by its Chairman and Managing Director, Chennai and another' – 2013 (5) TMI 509 - MADRAS HIGH COURT the husband of the petitioner, late Thulasilingam was employed as Light Vehicle Driver with Metropolitan Transport Corporation Limited from where he sought voluntary retirement. Prior to his retirement Shri Thulasilingam had contracted second marriage with the petitioner on 25.1.1975 while his first wife was alive. The second marriage was taken place with the consent of the first wife. The first wife died on 28.06.1980.
The children of the first wife were living with the deceased employee and petitioner jointly. The petitioner brought up the children of the first wife after the death of Thulasilingam on 2.6.1988. Till his death Thulasilingam was availing pension. After his death the petitioner in her capacity as the second wife applied for arrears of pension and also the amount due under Family Security Scheme which were paid on 15.4.1999. The petitioner also claimed for payment of family pension. She applied in Form 14 along with the legal heir certificate for sanction of family pension to her. She also produced necessary documents viz., marriage certificate, No objection certificate signed by the legal heirs of late Thulasilingam, death certificate of the first wife etc., Vide order dated 6.8.2007 the request of the petitioner for grant of family pension was rejected on the ground that being the second wife, the petitioner has no legal status to claim family pension.
Against this order the petitioner filed the present writ petition before the High Court, Madras challenging the said order as illegal and against law with the prayer to quash the impugned order as arbitrary and violative of the Article 14 of the Constitution. The petitioner submitted the following before the High Court:
The petitioner was treated to be the second wife of late Thulasilingam for the purpose of settlement of arrears and having accepted that she is the second wife, she could not be denied the family pension;
Once it was not disputed that after the death of first wife, the petitioner was living with her husband and children and has been declared as the legal heir of late Thulasilingam;
Once the legal heirs of the deceased gave no objection, there was no justification to deny the family pension to the petitioner, when it is proved on record, that the first wife had given her consent to late Thulasilingam to marry the petitioner;
The bar under the Hindu Marriage Act ceased to be operative after the death of first wife, therefore, her status became that of legally wedded wife as the petitioner continued to live as wife with late husband after the death of the first wife, therefore, pension cannot be denied to her.
The respondents, otherwise, contended that the petitioner is not entitled to the grant of family pension, because she was admittedly the second wife, therefore, her marriage was void in law. She is therefore not entitled to family pension. It was further contended that as per Rules applicable, the second wife is not entitled to family pension and merely because retirement benefits were settled in favor of the petitioner in view of no objection by other legal heirs, this cannot give right to get family pension.
The High Court framed the question to decide – `whether inview of admission by petitioner, that she was admittedly the second wife, could family pension be paid to her?'. The High Court held that the answer to this question is negative. The second wife has no legal status. According to the Hindu Law, the marriage during living spouse is void and gives no status to the second wife, though children born from such marriage get benefits at par with the legitimate children. The Court held that in this case it is not disputed that there is no child born from the wedlock between late Thulasilingam and the petitioner.
The High Court further held that the argument of the petitioner may be attractive but when seen in depth it has no legs to stand. The reading of Hindu Marriage Act shows that the second marriage, while first spouse is living, is not voidable but is void, therefore, mere death of the first wife cannot result in legalizing the second marriage or give the second wife with the status of wife.
The family pension is available to the widow of a person during her lifetime, therefore widow will always be the first wife, as there cannot be two widows for a person as law do not recognize two wives after coming into force of the Hindu Marriage Act. Further the petitioner herself admitted that she was only the second wife and was claiming rights as second wife. The High Court held that no error can be found with the impugned order, declining family pension to the petitioner. Merely because pensionary benefits were settled in favor of the petitioner, which in fact were to be paid to the children, who gave no objection for release of retirement benefits to her, cannot entitle her to claim family pension also.
By: Mr. M. GOVINDARAJAN
Cost Accounting Standards on Depreciation and Amortisation (CAS-16) & Interest and Financing Charges. (CAS-17).
News
Cost Accounting Standards on Depreciation and Amortisation (CAS-16) &
Interest and Financing Charges. (CAS-17). New
2013-05-23
Read More <http://casbicwai.org/CASB/casb-resources.asp>
Cost Accounting Standards on Depreciation and Amortisation (CAS-16) &
Interest and Financing Charges. (CAS-17). New
2013-05-23
Read More <http://casbicwai.org/CASB/casb-resources.asp>
Monday, May 20, 2013
Selection of Internal Auditors-Request for Proposal for Hiring Services of Chartered Account firm for internal Audit for the financial years 2010-11, 2011-12 and 2012-13 Maharashtra Electricity Regulatory Commission
Maharashtra Electricity Regulatory Commission
Last Date : 21/05/2013
Selection of Internal Auditors-Request for Proposal for Hiring Services of Chartered Account firm for internal Audit for the financial years 2010-11, 2011-12 & 2012-13.
Address: MAHARASHTRA ELECTRICITY REGULATORY COMMISSION 13th Floor. Cemtre 1. World Trade Centre, Cuffe Parade, Colaba, Mumbai-400 005.
Phone: 022-22163964/65/69
Email: mercindia@merdindia.gov.in
Last Date : 21/05/2013
Selection of Internal Auditors-Request for Proposal for Hiring Services of Chartered Account firm for internal Audit for the financial years 2010-11, 2011-12 & 2012-13.
Address: MAHARASHTRA ELECTRICITY REGULATORY COMMISSION 13th Floor. Cemtre 1. World Trade Centre, Cuffe Parade, Colaba, Mumbai-400 005.
Phone: 022-22163964/65/69
Email: mercindia@merdindia.gov.in
Role of CAs vital in fight against corruption'
INDORE: A slew of programmes would be held this year where chartered accountants of
the city will help traders and industrial associations solve their
tax-related issues and other financial matters. The decision was taken
at the round table meet organized by The Institute of Chartered
Accountant of India (ICAI) on its
Books that may Fire your Passion to Succeed
I am increasingly drawing
reference to the famous experiment that was conducted on some
Chimpanzees. The experiment runs like this - 8 chimpanzees were placed in
a big room with a lot of “toys” including a lot of wooden boxes. A
bunch of bananas were hanging from the ceiling, but too high for the chimps to
reach just like that. Chimps aren’t stupid, so one of them quickly
came to a solution – he placed the boxes one on
Supreme court verdict as to why only CAs can be appointed as Tax Auditors
As per Guidance note on Issues in Tax Audit under Section 44AB of ICAI
Purpose of Tax Audit:
The
purpose of Tax Audit is to ensure that books of Accounts have been
maintained in accordance with the provisions of the Income Tax Act.
Circular No.387 issued by the Central Board of Direct Taxes which has
been annexed to the material circulated to you also highlights this
fact. Accordingly a proper audit for tax purposes would ensure that
proper records are
ST/ECJ : Subsidy is included in value of services only if they are given to provide particular services
ST/ECJ : Subsidy is included in value of services only if they are given
to provide particular services and there is a significant relationship
between diminution in price of services and
LBT. Clarificaiton. LBT Not to apply of householders or consumers
Sec. 2(31A) defines LBT. It means a tax on
the entry of goods into the limits of the city for use, consumption or sale
therein, levied in accordance with Chapter XI-B [ r.w.s 152P and 152S in
Chapter XI-B of the Bombay Provincial Municipal Corp Act 1949 ]
152S. Assessment
of Dealers : The Commissioner for the purposes of levy, collection and
recovery of Local Body tax under this Act, assess such dealers
for such period and in such
I-T Dept slaps Rs 582 cr tax demand notice on Infosys
New
Delhi: Income Tax department has slapped a fresh USD 106 million (about
Rs 582 crore) tax demand notice on Infosys, for 2009 fiscal, adding to
the tax woes of India's second largest IT firm.The Bangalore-based software services exporter is already contesting additional income tax demands of
CUP is suitable method when twin conditions of comparability and uncontrolled transactions are satisfied
IT/ILT : CUP is suitable method when twin conditions of comparability and uncontrolled transactions are satisfied
[2013] 33 taxmann.com 110 (Mumbai - Trib.)
IN THE ITAT MUMBAI BENCH 'K'
Cabot India Ltd.
v.
Deputy Commissioner of Income-tax, 1(1), Mumbai
[2013] 33 taxmann.com 110 (Mumbai - Trib.)
IN THE ITAT MUMBAI BENCH 'K'
Cabot India Ltd.
v.
Deputy Commissioner of Income-tax, 1(1), Mumbai
IT/ILT : Payment of fees to foreign group company, disallowed under section 40(a)(ia) for failure to comply with TDS provision, cannot again be disallowed under section 37(1) for non-furnishing of details or under section 41(1) for being shown as a credit in books
IT/ILT : Payment of fees to foreign group company, disallowed under
section 40(a)(ia) for failure to comply with TDS provision, cannot again
be disallowed under section 37(1) for non-furnishing of details or
under
Prima facie, developers getting complex constructed on land registered in name of individual buyers are liable to service tax and services of hired contractors engaged in actual construction are input services for developers
ST : Prima facie, developers getting complex constructed on land
registered in name of individual buyers are liable to service tax and
services of hired contractors engaged in actual construction are input
services for
Saturday, May 18, 2013
Empanelment of Chartered Accountant/ Cost Accountant Firms for consultancy of Railtel Corporation Of India Limited
Railtel Corporation Of India Limited
Last Date : 20/05/2013
Empanelment of Chartered Accountant/ Cost Accountant Firms for consultancy for its Corporate Office at
Address: Multi State
Phone:
Email:
Last Date : 20/05/2013
Empanelment of Chartered Accountant/ Cost Accountant Firms for consultancy for its Corporate Office at
Address: Multi State
Phone:
Email:
Expression of Interest form Eligible Chartered Accountant firms to Shortlist Consultants for Professional Services in Direct & Indirect Taxation on Retainer ship basis
India Infrastructures Finance Company Limited
Last Date : 20/05/2013
Expression of Interest form Eligible Chartered Accountant firms to Shortlist Consultants for Professional Services in Direct & Indirect Taxation on Retainer ship basis
Address: India Infrastructure Finance Company Limited 8th Floor, Hindustan Times Building, 18 & 20, Kasturba Gandhi Marg, New Delhi – 110 001
Phone: 011-23450222
Email:
Last Date : 20/05/2013
Expression of Interest form Eligible Chartered Accountant firms to Shortlist Consultants for Professional Services in Direct & Indirect Taxation on Retainer ship basis
Address: India Infrastructure Finance Company Limited 8th Floor, Hindustan Times Building, 18 & 20, Kasturba Gandhi Marg, New Delhi – 110 001
Phone: 011-23450222
Email:
Appointment of chartered accountant firm as tax advisors and for work of tax audit for the financial year 2013-14.
Gujarat State Road Development Corporation Limited
Last Date : 20/05/2013
Appointment of chartered accountant firm as tax advisors & for work of tax audit for the financial year 2013-14.
Address: Gujarat State Road Development Corporation Ltd. Ground Floor, Nirman Bhavan, Sector No. 10 A, Gandhinagar – 382010 Gujarat.
Phone: 079-23252912
Email:
Last Date : 20/05/2013
Appointment of chartered accountant firm as tax advisors & for work of tax audit for the financial year 2013-14.
Address: Gujarat State Road Development Corporation Ltd. Ground Floor, Nirman Bhavan, Sector No. 10 A, Gandhinagar – 382010 Gujarat.
Phone: 079-23252912
Email:
Expression of Interest for Provide Chartered Accountant Service.
Land Development And Water Resources Department
Last Date : 20/05/2013
Expression of Interest for Provide Chartered Accountant Service.
Address: Land Development And Water Resources Department 23-C Gokhale Marg Lucknow
Phone:
Email:
Last Date : 20/05/2013
Expression of Interest for Provide Chartered Accountant Service.
Address: Land Development And Water Resources Department 23-C Gokhale Marg Lucknow
Phone:
Email:
Vacancy for CA / ICWA in GAIL India LTD
Eligibility :
CA, ICWA, MBA/PGDM, MSW, PG Diploma
Location : Delhi
Job Category : 1 to 3 Yr Exp
Last Date : 03 Jun 2013
Job Type : Full TimeLocation : Delhi
Job Category : 1 to 3 Yr Exp
Last Date : 03 Jun 2013
Hiring Process : Face to Face Interview, Group Discussion
Job Details
Walk-in Interview for the post of Computer/CA/PDP Faculty ICA(Institute of Computer Accountants)
Walk-in Interview for the post of Computer/CA/PDP Faculty
ICA(Institute of Computer Accountants) - Chennai, Tamil Nadu
For Computer Faculty: Good knowledge of Ms-Office & Tally ERP with graduation in commerce.ICA(Institute of Computer Accountants) - Chennai, Tamil Nadu
Penalities for non filing/ Late Filing of FCRA return
The
Ministry of Home Affairs has issued a notification (Notification No:
939, 29/04/2013) to the organisations registered under the Foreign
Contribution Regulation Act to submit their FCRA Returns on time.
Accordingly
any delay in filing of Annual Return will attract penalty ranging from
two to five per
Tax amendments to file Income-Tax return for AY 2013-14
Tax amendments to file Income-Tax return for AY 2013-14- CA GAURAV GARG
It
is well known fact that tax payers are now required to file their Income-tax
Return for the Financial Year 2012-13 relevant to the Assessment Year 2013-14.
These Income-tax Returns in most cases have to be filed by 31st July, 2013.
However, for the Corporate Sector as well as for persons who are having the
RBI Clarification on Issue of equity shares under the FDI scheme allowed under the Government route against pre-operative/pre-incorporation expenses
Foreign Direct Investment (FDI) in India - Issue of equity shares under the FDI scheme allowed under the Government route against pre-operative/pre-incorporation expenses
Attention of Authorised Dealers Category – I banks is invited to Para 3 (II) of A.P. (DIR Series) Circular No. 74 dated June 20, 2011 read with A.P. (DIR Series) Circular No. 55 dated December 9, 2011,
allowing thereby issue
New Format for raising query on Foreign Direct Investment with the Department of Industrial Policy
DIPP has prescribed the following format for raising any queries on FDI
with it . Hence , any one wants a clarification from DIPP on the GOI
FDIs policy may submit their query as per the following format.
Address :
Tuesday, May 7, 2013
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