Newsletter Vol. 98

8/8/2019 Newsletter Vol. 98

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CharteredAccountantsCommuniquA NEWSLETTER BY PRADIP KAPASI & CO.

JANUARY 2011

TRUST SINCERITY

EFFICIENCY

ACCURACY HONESTY

Vol. No. 98

SCLAIMERery effort has been made to ensure accuracy in the information. The publishers do not hold themselves

sponsible for errors that may have arisen. Please take professional advice for further clarification.

STRICTLY FOR PRIVATE CIRCULATION

BY INVITATION

x Beyond Borders

orridors of the Court

orth Block

vestments

uery Counter

oney Matters

ound the World

unny Bone

ates to remember

AC Exclusive

EDITORS DESK

Dear Readers,

WE WISH YOU A HAPPY AND PROSPEROUS NEW YEAR!!

Raja-Radia spectrum scandal has led us to appreciate and understand a true value

natural and national wealth. Not even an economist would have imagined that gr

right of communication could fetch a nation few lacs of crores in Rupees!!!

In good old days, one had heard about land rights, but right to construct upto a partheight, popularly known as FSI, as unheard of. Now, sale of such FSI can m

municipal corporation filthy rich.

A country can have varied natural resources; minerals, water and natural gas are kexamples. Even human resources, once upon referred to as Population Bomb ca

be turned into the great resources as proved by India and China. Days are not far

solar rights and air rights will be sold!It is desirable that these resources are not just sold but fruitfully utilized by the nati

nation, acquiring huge money, by selling these resources left, right and centre can on

compared with a rich son selling family heirlooms for getting money. Rights of min

granted to a few corporates, having no regard for environment or tribals can damacountry irreversibly. Let us hope that the utilization of natural resources be fa

system of allocation transparent and just considering the interest of the generatio

come in mind. This only can lead us on the desired path of prosperity.Let us pray that 2011 bestows upon us this wisdom.

Amen!

itorial Board: Nina Kapasi Harshal Dedhia Shitul Dedhia

ONTENTS


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Corridors of the Court

ERMISSION TO FILE APPEAL BEFORE CIT(A) CANNOT BE TREATED AS NO OBJECTION

RAFT ASSESSMENT ORDER

e AO passed a draft assessment order u/s 144C on 29.12.2009 in which he stated that the assessee

her accept the variations suggested in the order or file objections before the Dispute Resolution Panel (D

e assessee exercised the latter choice and filed objections on 29.01.2010. On 20.01.2010, the CBDT is

Circular clarifying that the assessee had a choice to either go before the DRP or the CIT (A). At the

aring before the DRP, the assessee addressed a letter dated 22.04.2010 requesting permission to fi

peal before the CIT (A). However, the DRP passed an order dated 08.07.2010 stating that the choice wh

approach the DRP or the CIT(A) had to be taken before filing the objections and not thereafter. It held th

e assessee had already filed the objections, directions u/s 144C(5) had to be issued. However, inste

aling with the objections, it observed that the assessee had chosen to withdraw the objections filed b

e DRP and confirmed the draft assessment order as correct. The assessee filed a Writ Petition to chal

e DRPs order. It was held by the High Court that the DRPs order suffered from the vice of being contrae record as well as non-application of mind and caused immense prejudice to the assessee. The asse

d never sought withdrawal of the objections filed by it but had requested the DRP for consent to approac

O to issue the final order so as to file an appeal before the CIT(A). If the DRP was of the view that it di

ve the jurisdiction to give such consent or that the objections could not be withdrawn, it could have rej

e application but ought to have dealt with the objections on merits. The result of the DRPs stand was th

ors for the assessee were closed because its objections had not been considered by the DRP, an a

ainst the assessment order could not be filed before the CIT(A) and even an appeal against the DRPs

uld be an exercise in futility. This is not sustainable. Accordingly the objections are restored to the DRP

ection to consider on merits within 3 months.

LA Engineering Ltd vs. DRP (Guj HC), Special Civil Application No. 8179 of 2010

ELAY IN FILING APPEAL WITH HIGH COURT CAN NOT BE CONDONED IF NO ADEQU

XPLANATION IS PROVIDED FOR DELAY IN THE APPLICATION FOR CONDONATION

ELAY

appeal was filed by by the department with the High Court. Since there was a delay of 224 days in filin

peal, an application for condonation of delay in filing the appeal had also been filed. The High

missed the appeal holding that the explanation given by the department for delay in filing the appeal wa

tisfactory.

T vs. HPS Social Welfare Foundation, 329 ITR 310 (Del.)


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,

ORM OF TRANSACTION CAN BE IGNORED & CORPORATE VEIL LIFTED IF ATTEMPT IS

EVADE TAXES

e assessee, a partnership firm comprising of father & son, sold its business as a going concern to a li

mpany. The partners of the firm were the directors of the company. The company paid the assessee Rs

ores towards, technical know-how, Rs. 36 lakhs as non-compete compensation for pending orders an

lakhs as non-compete compensation for future orders. The entire amount of Rs. 1.94 crores was cla

be a non-taxable capital receipt. However, the AO held the entire sum to be assessable as consideratio

ansfer of goodwill u/s 55. On appeal, the CIT(A) upheld the assessees stand with regard to the tech

ow-how & non-compete compensation for pending orders and rejected the balance. On cross appeals

bunal upheld the stand of the AO on the ground that the arrangement to pay technical know-how etc w

olourable device to evade tax and the entire amount was assessable as goodwill. On appeal by

sessee, held dismissing the appeal: (i) The receipts for technical know-how and the compensation for

mpeting fees are nothing but a part of composite receipt to diminish the value of the assets of the asses

e assessee has clearly attempted to evade tax by claiming the amount received as goodwill into o

chnical know-how in order to evade tax; (ii) The question of non-compete fee does not arise given tha

sessee was taken over as a going concern in its entirety by the new company. The partners of the asse

e the directors of the company and the consideration was paid to the assessee and not to the partners. T

as no competition between the assessee and the new company.

do Tech Electric Co v. DCIT (Mad.), Tax Case (Appeal) Nos.2209 & 2210 of 2006, Dt.16.12.2

TT REBATE ALLOWED FROM TAX UNDER 115JB

e assessee is a company which is engaged in the business of purchase and sale of shares. The asse

ed its reply stating that the assessee had returned income of Rs. 1,04,81,991 and after set off of the

rward losses from the previous years to the extent of the profit in the year, the taxable profit was NILerefore although the credit for the amount paid as STT was available u/s 88E, no rebate has been claim

ew of the total taxable income returned being NIL. The assessee also submitted, emphasizing tha

yment of tax of both TDS and STT put together exceeded the tax liability not only u/s 115JB but eve

bility under regular tax, even if there were no carried forward loss to be set off. The assessee again rece

notice u/s 154 to which assessee has submitted its reply along with the statement of total income and

AT computation and there from the assessee claimed a rebate u/s 88E for the STT paid by it. The

wever, rejected the claim of the assessee for rebate of STT paid and computed the tax liability agains

come computed u/s 115JB. CIT(A) had also confirmed the order of the AO. In response to appeal wit

on ITAT, it was held that the provision of sections 87 and 88A to 88E also apply after the total incommputed under section 115JB of the Income Tax Act, 1961 and since the assessees total income include

come from the taxable Securities Transactions, the assessee is entitled to a deduction of the amount equ

e STT paid by him in respect of the taxable Securities Transactions entered into in the course of bus

ring the previous year. The assessees appeal was thus allowed and the Assessing Officer is directed to

bate under section 88E for the STT paid by the assessee.

/s HORIZON CAPITAL LIMITED vs. ITO, (Bang.) ITA No. 592 of 2010


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REDIT OF MAT HAS TO BE GIVEN BEFORE CHARGING INTEREST U/S. 234B AND 234C

this case it was held that before charging interest under sections 234B and 234C of the Income Tax

61, the credit of minimum alternate tax was to be first allowed to the assessee. It was also held

arging of interest under sections 234B and 234C by the assessing officer, as a consequence of the

ssed under section 154 was a debatable issue, which the Assessing Officer could not do by invokin

ovisions of section 154.

T vs. Salora International Ltd., 329 ITR 568 (Del.)

50C APPLIES TO TRANSFER OF DEVELOPMENT RIGHTS IN PROPERTY

e assessee was a co-owner of an inherited property. He entered into an agreement with the deve

development of the property for a consideration of Rs. 63 lakhs and offered his share o

nsideration to capital gains. The Stamp Valuing Authority valued the property at Rs.4.73 crores th

e DVO valued it at Rs. 1.81 crores. The AO invoked s. 50C and adopted the DVOs valuation ansideration. This was confirmed by the CIT (A). Before the Tribunal, the assessee argued that there

distinction between rights in land & building and the land and building and that s. 50C did not app

ghts in land & building such as development rights. It was pointed out that the fact that only develop

hts were transferred was borne out by the fact that the assessee was shown as owner of the prope

e municipal records. It was also pointed out that the stamp duty law made a distinction between tra

development rights and transfer of the property by imposing different rates of duty. It was

smissing the appeal, that the argument that transfer of development rights does not amount to trans

nd or building and therefore s. 50C is not applicable is not acceptable because u/s 2(47)(v) the givi

ssession in part performance of a contract as per s. 53A of the Transfer of property Act is deemed transfer. When the assessee received the sale consideration and handed over possession o

operty vide the development agreement, the condition prescribed in s. 53A of the Transfer of Propert

as satisfied and u/s 2 (47) (v) the transaction of transfer was completed. The fact that the asses

me stands in the municipal records does not change the nature of the transaction.

if Akhatar Hussain vs. ITO, ITA No. 541 & 706/Mum./2010

HOME


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Query Counter

INCOME FROM OTHER SOURCES

Question: Which expenses are not deductible while calculating Income from OthSources?

Answer: The following expenses are not deductible by virtue of section 58:

Personal Expenses Any personal expenditure of the assessee is n

deductible

Interest Any interest chargeable under the Act which is payable outside Ind

on which tax has not been deducted at source is not deductible

Salary Any payment chargeable under the head Salaries and payab

outside India is not deductible if tax has not been paid or deducted therefrom

Wealth Tax Any sum paid on account of wealth-tax is not deductible

Any amount paid to related parties or any expenditure for which payment

made otherwise than by an account payee cheque or account payee bank dr

exceeding Rs. 20,000/- is not deductible while calculating income under t

head Income from Other Sources

Expenditure in respect of Royalty and Technical Fees received by a forei

company In case of foreign companies expenditure in respect of royalties a

technical service fees as specified by section 44D is not deductible

Expenditure in respect of winnings from lottery No deduction shall be allowunder any provision of the Act in computing the income by way of any winnin

from lotteries, crossword puzzles, races including horse races, card games a

other games of any sort or from gambling or betting of any form or nature.

Question: While calculating Income from Winnings from Lottery, which deductions a

permissible and not permissible as per the Income Tax Act?

Answer: Reasonable sum paid as commission or remuneration to the banker or any oth

person for realizing such income is deductible as per the Income Tax Act.

While calculating income from winnings from lotteries, crossword puzzles, rac

including horse races, card game and other games or from gambling or betting of a

form or nature, the following are not deductible:

Deductions under section 57

Deductions under sections 80C to 80U.

Losses cannot be set off under sections 70, 71, and 72 against the aforesa

incomes


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Question: When is dividend deemed to be received u/s 2(22)(e) of the Income Tax Ac

Does it include advance rent received by the shareholder?

Answer: When any payment by way of a loan or advance is made by a closely held compa

to its registered shareholder i.e. the shareholder is holding 10% or more of equ

shares in the company who is giving the loan or to any concern in which su

shareholder is a member or a partner having substantial interest or any payme

made by such company on behalf of or for the individual benefit of such sharehold

from its accumulated profits, then such a loan or advance is treated as dividend in t

hands of the shareholder.

Deemed dividend u/s 2(22)(e) includes advance rent received by a shareholder. F

eg. If a person holding more than 10% equity shares in a closely held company, le

out his property to the company under an agreement, the advance rent received

him will be deemed as dividends even if the amount is received under a lea

agreement or even if it has to be adjusted against future rent.

Question: C purchased gold ornaments for Rs. 5 lakhs (fair market value Rs. 5.5 lakhs)

October 15, 2009. He further purchases gold jewellery for Rs. 20 lakhs (f

market value Rs. 25 lakhs) on December 10, 2009. Is the difference between

fair market value and the cost of purchase taxable as IFOS?

Answer: Yes. According to clause (vii) of section 56(2) of the Income Tax Act, in case

movable properties, aggregate data is taken into consideration. The aggreg

consideration is Rs. 25 lakhs whereas the aggregate fair market value is Rs. 3

lakhs. The difference between the two is more than Rs. 50,000/-. Therefore,

difference between the two (i.e. Rs. 5.5 lakhs) is taxable in the hands of C. In case

is a dealer in gold/jewellery, clause (vii) of section 56(2) will not be applicable.

Question: Y purchases shares in an Indian listed company by investing borrowed capi

Dividend received from this company is not chargeable to tax in the hands

shareholders. Will interest on borrowed capital be allowed as a deduction?

Answer: No. In such a case the interest paid on borrowed capital will not be allowed a

deduction. As dividend income is exempt from tax, any expenditure incurred

earning such income will not be allowable as an expense.

HOME


7/18

North Block

ROCESSING OF ITR-1 AND ITR-2 RETURNS CREDIT FOR TAX DEDUCTED AT SOURCE FOR A.Y.200

NSTRUCTION NO. 9/2010 [F. NO. 225/25/2010/IT (A-II)], DATED 9-12-2010

n supersession and modification of Instruction No. 5/2010 dated 27.07.2010 and Instruction No. 7/2010

6.08.2010, the CBDT has taken the certain decisions. The TDS claim of the assessees will be accepted u

he following cases:

he Board had clarified vide the above mentioned notification to increase the limit of TDS claim from Rs. 3

o Rs. 4 lakhs for the A.Y.2009-10. It is further clarified that if the limit of Rs. four lakh, or refund of Rs.25,0

xceeded in case of a return filed in ITR-1 and ITR-2 or there isNIL matching with AS-26 statement, the credit shou

llowed by the Assessing Officer after make due verification. This verification may be done in the same manner a

eing done in the earlier years.

NSTRUCTION REGARDING PARAMETERS FOR PROCESSING OF E-TDS RETURNS

NSTRUCTION NO. 8/2010 [F.NO. 275/73/2009-IT(B)], DATED 8-12-2010

n the present system of processing of e-TDS returns, the returns are processed online and mismatch r

howing defaults on various accounts is generated. Based on this mismatch report, the assessing officers

how-cause notices to the deductors and take follow up actions.

. It has come to the notice of the Board that substantial number of TDS returns are pending where the dedu

wise default on account of short deduction of tax is less than Rs. 10.

. This issue has been considered by the Board and it has been decided that:

(i) where the default on account of short deduction is less than Rs.10 for each deductee, the demand is

off to zero; and

(ii) after considering (i) above, deductor-wise demand/default, if any, of Rs.100 or less will also be ig

for further action.

XEMPTION OF SERVICE TAX FOR USE OF PACKAGED OR CANNED SOFTWARE HAS BEEN RESCIN

Notification No. 51/2010 - Service Tax dt. 21.12.2010

he Central Government, on being satisfied that it is necessary in the public interest so to do, hereby res

he notification of the Government of India in the Ministry of Finance (Department of Revenue) No. 02/2

ervice Tax, dated 27th February, 2010 which exempted the right to use packaged or canned software

ervice tax payment.


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PF ACCOUNTS OPENED ON BEHALF OF HUF PRIOR TO 13.05.2005 SHALL BE CLO

FTER EXPIRY OF FIFTEEN YEARS

otification no. GSR 956(e), dated 7-12-2010

PF account opened on behalf of HUF prior to 13.5.2005 shall be closed after expiry of fifteen years from

nd of the year in which the initial subscription was made and the entire amount standing at the credit o

ubscriber shall be refunded at the end of the current year, i.e., the 31st day of March, 2011 and the e

mount standing at the credit of the subscriber shall be refunded, after making adjustments, if any, in respeny interest due from the subscriber on loans taken by him. The account is required to be closed down ev

he extension of five years, beyond the limit of fifteen years has been granted and the period of such extens

ot expired.

ANKS ARE INSTRUCTED TO DISCONTINUE SUBMISSION OF STATEMENT IN CASE

GGREGATE FOREX UTILIZATION BY AN INTERNATIONAL DEBIT CARD HOL

XCEEDS USD 1,00,000

otification No. RBI/2010-11/323

ll the banks authorized to deal in foreign exchange were required to submit a statement as on Decembe

ach year in case the aggregate forex utilization by an International Debit Card holders exceeds USD 100,0

calendar year. It has been decided to discontinue the submission of the statement mentioned above t

eserve Bank. Accordingly, all the banks authorized to deal in foreign exchange are advised to discontinu

ubmission of the afore-mentioned statement from the calendar year 2010 onwards. All other instructio

.P. (DIR Series) Circular No. 46 dated June 14, 2005 shall continue to remain the same. The direc

ontained in this circular have been issued under sections 10(4) and 11(1) of the Foreign Exchange Manage

ct (FEMA), 1999 (42 of 1999) and are without prejudice to permissions / approvals, if any, required unde

ther law.

HOME


9/18

Wonderland of Investments

the earlier section, we had discussed hedge funds as an institution of foreign institutional investm

ow, we will see the other one - pension funds.

ENSION FUNDS

dia does not have a comprehensive old age income security system. There are however, andatory schemes for employees of State and Central governments, employees of public sector b

mployees in firms with a staff of 20 or more and some others. In recent years, the insurance an

utual fund industry in India has also started offering pension plans. Formal sector pensions in Indi

divided into three categories; viz those schemes that come under an Act or Statute, Govern

nsions and voluntary pensions.

ENSIONS UNDER AN ACT

here are three defining Acts for pensions in India. These are the

Pensions under the EPF&MP Act 1952. These include the

o Employees Provident Fund

o Employees Pension Scheme

o Employees Deposit Linked Insurance Scheme

Pensions under the Coal mines PF&MP Act 1948. These include

o Coal mines provident fund

o Coal mines pension scheme

o Coal mines linked insurance scheme

Gratuity under the Payment of Gratuity Act, 1972.

OVERNMENT PENSIONSovernment pensions in India are defined under theDirective Principles of State policy and are ther

t under a Statute. The Government amended the regulations to put in place the new pension sys

he old scheme continues for the existing employees (i.e. those who joined service prior to Janua

04). Pensions for government employees would include employees of the central as well as the

vernments.


10/18

Central government pensions

o Civil servants pensions

o Defence

o Railways

o Posts

State government pensions

Bank pensions

o Reserve Bank of India (RBI)

o Public sector banks

o National Bank for Agriculture and Rural Development (NABARD)

o Other banks pensions

OLUNTARY PENSIONS

Superannuation schemes

Plans sold in the market. These are typically plans sold by

o Mutual funds

o Insurance firms

informal sector pensions, India has finalised a technical assistance project with the Asian Develop

ank (ADB) to formulate appropriate policies and institutional arrangements to motivate the excl

orkers to voluntarily participate in formal retirement plans. This project will assist in achieving gr

arity on the specific needs and constraints of this audience and in designing appropriate products, a

d delivery mechanisms as well as benefit and exit policies which can serve India's huge, widesp

d diverse informal sector workforce. This project targets self-employed professionals, contrac

sual labour, agricultural workers, farmers, women workers, etc. and includes a nation-wide ran

rvey of 42,000 households. Existing arrangements applicable to informal sector are Senior Cit

aving Scheme, NOAPS, Public Provident Fund, etc.

next month, we will discuss New Pension Scheme(NPS) , a scheme available both for employe

ell as self-employed people and handled by Banks and Mutual Funds.

HOME


11/18

Tax beyond bordersTax beyond bordersTax beyond borders

ERMANRNT ESTABLISHMENT

The advent of liberalization has made many India companies set up the business in countries ou

dia. This business in foreign country is carried out in many places in the name of the Indian company.

reign country in which such business is being carried out is commonly known as the Host country and I

knows as the Home country.

Under the Indian tax laws, the global income of such an Indian company is taxable in India for the re

at such a company is a resident of India for the purposes of taxation. At the same time, the foreign inc

ough included in the income that is taxable in India, may be taxed in the host country in accordance with

ws of that country for the reason that such foreign income is earned in that country. This situation lea

uble taxation of the same income in two different countries.

The Double taxation of the same income scuttles the growth of international trade and is seen as a ser

struction in development of trade and the growth of a country, worldover. The countries therefore t

inimize the impact and in most cases seek to eliminate the double taxation by entering into the Doaxation Avoidance Agreement (DTAA).

One of the important concept of this DTAA is to ensure that the foreign income of a company whi

sident of another company is to tax such income only in the host country where source of income arises on

e company has substantial economic activity in the host country. Usually, the presence of substantial activ

e DTAA is classified as a Permanent Establishment (PE).

It is only when a company has a PE in the host country, that its income from such PE is made liable t

the host country. The income that is taxed in the host country is not the entire global income of the countr

restricted to the income earned in the host country on account of the business carried out in that country.

Most of the DTAAs accept this rule of taxation of the PEs income in the host country and provide

ch income so taxed in the host country will not be again taxed in the home country. The PEs usually

assified in the following classes:-

Basic rule PE

Construction PE

Service PE

Agency PE and

Subsidiary PE

Detailed rules are provided in the DTAA for determining whether a company has a PE in the host cou

r not. On application of such rules, a company determines whether it has a PE in the host country or not.

ncome of the company though derived in the host country shall be taxed in the home country if the com

as no PE in the host country. This is the general rule of International taxation that operates subject to spe

xceptions contained in different DTAAs executed worldwide.

HOME


12/18

OVT KICKS OFF FDI RETAIL TALKS AGAIN

ey policy makers in the government have kicked off discussions to liberalize foreign direct investment re

he government is debating opening up of foreign investment in multi-brand retail sector that employs mil

d further liberalizing the defence sector. Finance minister, Home minister, Defence minister along

ommerce minister held discussions on further relaxing the foreign direct investment regime. The departmedustrial policy and promotion had earlier this year put out discussion papers to seek public commen

ening up of multi-brand retail to foreign investment and increasing FDI in defence from 26% to 74%

partment then set up an inter-ministerial panel to examine public comments and suggest some policy mea

owever, the panel is expected to call for wider consultation on opening up multibrand retail sector to fo

vestors in its report. Of the 180 respondents only 65 agreed to opening up of the sector and majority

posed it. The final report is expected soon. Both the Left and BJP are completely opposed to opening

ulti-brand retail. However, the UPA government, sans the Left, seems more open to the idea of openin

ulti-brand retail to FDI.

OMPULSORY KYC COMPLIANCE FOR ALL INVESTMENT SIZES IN MUTUAL FUND

he Association of Mutual Funds in India (AMFI) committee on know your customer (KYC) has asked m

nd houses to initiate KYC procedure for all investments size, doing away with the current threshold limit

,000. The AMFI KYC committee has submitted its detailed suggestions to the market regulator Securitie

xchange Board of India (SEBI) for bringing down the size of investments from Rs 50,000 to NIL for all inv

pes in a phased manner. Currently, the proposal is under SEBI's consideration. However, the AMFI boar

ven a go-ahead to all fund houses to implement the norms from 1 October 2010. These norms will initia

ly applicable to all non-individual investors, non-resident Indian (NRIs), and channel investors. This cat

cludes corporate, partnership firms, trusts, Hindu Undivided Family (HUF), NRIs and investors corough channel distributors. Channel distributors are those who facilitate buying and selling of mutual fund

a online channels. Currently people investing Rs 50,000 and above are required to comply with know

stomer (KYC) norms. Domestic retail investors are required to provide a copy of residential proof, PAN

hich is compulsory) and one photograph to complete the KYC process. The decision on a threshold lim

dividual investors will be taken after getting feedback from SEBI. Industry players believe that this limit c

around Rs 5,000 to Rs 10,000.

SE LAUNCHES NEW VERSION OF BOLT FOR ITS TRADING MEMBERS

he Bombay Stock Exchange launched new version of BOLT for its trading partners. With this BSE has st

ving timestamp on its broadcast messages. The BOLT TWS 51.02 has been optimized for enha

rformance resulting in improved response time and better download time. The BOLT TWS 51.02 is a

mpulsory release, however, it is recommended for performance enhancement reasons. This will fac

vanced trading solutions like smart order routing. Trading members using IML based trading solutio

quested to contact their respective service provider for upgradation to new version.

HOME

Money Matters


13/18

Aroundthe World

& Y FACES FRAUD CHARGES OVER LEHMAN BROTHERS COLLAPSE

S prosecutors are inclined to file civil fraud charges against Ernst & Young for its alleged role in the colla

hman Brothers, stating that the accounting firm did not act while the investment bank misled investors

financial health. This would mark the first time a major accounting firm is being targeted for its role nancial crisis. The suit stems from certain transactions that Lehman Brothers allegedly carried out to ma

k appear lower than it actually was. Lehman Brothers was one of E & Y's biggest clients and the accou

m earned about $100 million in fees for its audit work between 2001 and 2008. The suit could be filed

on, adding to it a broader investigation into whether some banks misled investors by removing debt

eir balance sheets before they reported their financial results to mask their actual risks. The state may se

mpose fines and other penalties on E & Y. Investigators have sought documents and information from se

ms, which earlier disclosed six transactions that were wrongly classified. A report said that there

ssibility that E & Y will try to settle out-of-court before any suit is filed.

S DRAGS CHINA TO W TO OVER W IND POWER EQUIPMENT SUBSIDIE

he United States filed a case against China with the World Trade Organization (WTO), alleging that the C

as illegally subsidizing the production of wind power equipment. Under its Special Fund for Wind

anufacturing, China appears to provide subsidies that are prohibited under WTO rules, because the g

warded under the programme seem to be contingent on Chinese wind power equipment manufacturers

e parts and components made in China rather than foreign-made parts and components. This develop

presents an escalation of trade tensions between the two countries over clean energy. The size of indiv

ants currently available under the Special Fund for Wind Power Manufacturing ranges between $6.7 m

d $22.5 million. It is estimated that the grants provided under this programme run into several hun

illion dollars. An investigation was initiated and addressed allegations relating to a variety of Chactices affecting trade and investment in the green technology sector, including not only prohibited subs

ut also export restraints, discrimination against foreign companies and imported goods, technology tra

quirements and domestic subsidies causing serious prejudice to trade interests.


14/18

2

ROUPON IN TALK S W ITH GOOGLE FOR $3-BN SELLOUT

oupon, a Chicago-based startup which is in talks about an acquisition by web giant Google would give G

boost in the $133-billion US local advertising market and help it benefit from surging demand for cou

nt via the Web, for products and services. Google is stepping up the pace of acquisitions to spur growth

ep from losing business as Facebook, the largest social networking service, adds features and lures

rfers. Groupon is still deciding whether to move ahead with the sellout to Google or to proceed with a r

fund-raising that may value company at more than $3 billion. Groupon earlier held failed negotiations

hoo for an acquisition and now Groupon is said to become Google's most expensive target. Google had e

id $3.2 billion for another online advertising provider DoubleClick. Google's mergers and acquisi

vision stated that the company is likely to buy more companies the size of YouTube and DoubleClick to

fer more online services. Google is using takeovers to lessen its reliance on ads placed alongside search r

d move into new areas, such as mobile marketing. Google has accelerated its dealmaking in 2010, spe

ound $1.6 billion on more than 20 companies in the first nine months of the year.

ANK OF AMERICA CUTS OFF PAYMENTS TO WIKILEAKS

nk of America was joining other financial institutions in declining to process payments to WikiLeaks, w

s angered U.S. authorities with the mass release of U.S. diplomatic cables. Bank of America has decide

allow any transactions which are linked to WikiLeaks since WikiLeaks had earlier stated that it will re

cuments early next year that will point to unethical practices at a major U.S. bank, widely thought to be

America. Several companies have ended services to WikiLeaks after the website teamed up with m

wspapers to publish thousands of secret U.S. diplomatic cables that have caused tension bet

Washington and some of its allies. In a backlash against organisations that have cut off WikiLeaks,

tivists have been targeting companies seen as foes of the website. WikiLeaks founder was released on ba

eek from a jail in Britain. He claimed he was the target of an aggressive U.S. investigation and

tradition to the United States was increasingly likely. U.S. Attorney General has said his government

nsidering using the U.S. Espionage Act, under which it is illegal to obtain national defense informatioe purpose of harming the United States, as well as other laws to prosecute the release of sensitive govern

formation by WikiLeaks.

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15/18

Funny Bone

This guy is walking with his friend. He says to this friend, I m a walking economy. The frie

replies How so? My hair line is in recession, my stomach is a victim of inflation, and both

these together are putting me into a deep depression!

Mukesh Ambani in his 27 storeyed home: Mukeshbhai gets up from his bed room on 15th flo

akes a swim in the swimming pool on 17th floor, has breakfast on the 19th floor, dresses up

office on 14th floor, collects his files and office bag from his personal office on 21st floor

ishes bye to Nitaben on 16th floor, says see youto his children on 13th floor, and goes dow

3rd floor to self drive his 2.5 crore Mercedes to office, but then, he finds out that he ha

forgotten the car keys upstairs.

But on which floor?15th, 17th, 19th, 14th, 21st, 16th or 13th?

e calls all his servants, cooks,maids, secretaries, pool attendants, gym trainers, lift attenda

tc. on all the floors. There is a hectic search and lot of running around on all the floors, but

ey is not traceable. Fed up, after half an hour of frantic search, Mukeshbhai leaves in a huf

chauffeur driven Ikon car. At 3.30 P.M. late in the afternoon it is discovered that 4 days b

a temporary replacement maid had washed Mukeshbhai's pants and hung it to dry on a string

he balcony of 16th floor, with car keys in the pant pocket. The key had blown away somewhe

in the high winds at 16th floor level and was never found. This was detected because of

Nitaben's habit of checking clothes given for ironing personally.

Meanwhile, after 3 days of the incident, Nitaben with all irritation writ large on her face

complained to Mukeshbhai asking him where he was roaming till 3 A.M. last night

Mukesh replied that he was at home all night.

"Then why did the helicopter land in the terrace at 3 A.M?

I was so much worriedI could not sleep whole night," quizzed Nitaben.

Oh That helicopter.That helicopter came from Germany, sent by Mercedes people to deli

the duplicate car key" mumbled Mukesh.

come Tax Department is keeping a Watch on All High value Transactions.......so dont buy

NIONS!!!

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16/18

MONDAY TUESDAY WEDNESDAY THURSDAY FRIDAY SATURDAY SUNDAY

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5th Services tax payment by Companies for December.Service Tax Payment by other than Companies for October toDecember

7th TDS payment for December

15th P.F. Payment DecemberTDS/TCS Quarterly Statements of Compliance October to December

21st MVAT Monthly Payment for December (tax>1000000/-).MVAT Quarterly Payment for October to December (Tax>100000/-


17/18

CAC Exclusive

YC is compulsory for any amount of investment in mutual funds.

asy Exit Scheme, 2011 under Section 560 of the Companies Act, 1956 shall come into f

n the 1st January, 2011 and shall remain in force up to 31st January, 2011. If you are loa

th defunct company, it would be better to avail the benefit of exit scheme.


18/18

TIT-BITS

Goodbye2010Boyyoustartedoffrough

IjustknewgettingthroughwouldbetoughThereweremorehighsthanlowsIpaidthepriceforwrongsIchose

AlthoughtheroadwassometimesbumpySomethingalwaysmademesmilewhenIwasgrumpy

ForawholeyearIstoodonmyownFocusanddrivewasmychosenzone

PerseveredthroughitallWasliftedupeachtimeIdfall

ImadeplansanddictatedcommandsHowtheycametobeevenIdontfullyunderstand

WitheachnewobstacleorbattleIfacedWisdomandcourageIembraced

ImremindedofthosewhowerebymysideThosewhogavemecomfortasIcried

ThosewhogavemeinspirationWhen

my

world

was

filled

with

endless

frustration

ThosewhoreachedouttolendahandWhenmylifehadseveredemands

AsthisyearcomestoanendIreflectonmistakesandvowtomakeamends

ImthankfulforthechallengesbothgoodandbadGratefulforthestrugglesIvehad

TheyalldefinemeandmakemewholePushmeclosertoattainingmygoalsThisyearwasbetterthanthelastNextyearImsurewillbeablast!

Lay

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