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` 20/- COPY
MANAGING COMMITTEE
VOLUME - VII SEPTEMBER 2015l
Baroda Branch of Western India Regional Council ofThe Institute
of Chartered Accountants of India
The Institute of Chartered Accountants of India(Setup by an Act
of Parliament)
INDEX
CA. Yash N Bhatt 99243 88339
CA. Viral K Shah 98243 62211
CA. Arpan Dodia 98983 83530
CA. Dhiren Parikh 93762 11099
CA. Abhishek Nagori 94260 75397
CA. Nayan Kothari 98244 33445
CA. Kejal Pandya 98259 77220
CA. Utpal Shah 98250 28960
CA. Hitesh Agrawal 99980 28737
Chairman
Vice-Chairman
Secretary
Treasurer
Ex-officio
Immediate Past Chairman
Committee Member &Study Circle Convener
Committee Member
Committee Member
EDITORIAL TEAM
CA. Yash Bhatt
CA. Hitesh Agrawal
CA. Jay Shah
CA. Sanjay Joshi
Forthcoming Events ... 02
Direct Tax Updates ... 02
Judicial Decisions on Excise andService Tax ... 03
3D ... 03
Indirect Tax Updates ... 05
FAQs on IFRS transactions ... 06
ICAI CORNER ... 08
Highlights of Key Changes ... 10
Due Date Planner ... 10
PhotoFlash ... 11
THE INSTITUTE OF CHARTEREDACCOUNTANTS OF INDIA
Tel. :E-mail :
Web :
ICAI Bhawan, Post Box No. 7100,Indraprastha Marg, New Delhi -
110002.
+91 (11) [email protected]
www.icai.org
“ICAI Bhawan”, Kalali-Tandalja Road, Atladra,Vadodara - 390 012.
+91 8511077115
+91 8511125959+91 (265) 2681115 / 2680593
[email protected]
BARODA BRANCH OF WIRC OF ICAI
M.:Chairman Mobile:
Telefax :E-mail:
Web :
WESTERN INDIA REGIONAL COUNCIL
Tel. :Email :
Web :
ICAI Tower, Plot no C-40, G BlockOpp MCA Ground, Bandra Kurla
Complex,
Bandra (E), Mumbai - 400 051+022-33671400/33671500
[email protected]
As we entered in the month of September, the world in general
& Indian economy in
particular is reeling under mixed signals. Some says that the
worst is in existence.
However there are mixed feelings as the industries are facing
the financial problem at one
end & Indian existing government is very optimistic &
coming out with different plans for
capital base industries & financial aid for Indian citizens
below poverty line. To add,
government has one more challenge of poor monsoon across the
country. Analysts
indicate that the revival of economic growth of India is real
and the evidence is visible
from a variety of sectors. However no confidential motions are
being reciprocated by
industrialists from varied sectors.
Under these mixed challenges, CA fraternity has equal challenges
of completing the
Statutory Financial Audit under the new enactments before 30th
of Sept, 2015. Black
money Act has its own challenges & many disclosure and
compliance standards need to
be observed including the role of ICDS for 2nd quarter of
Advanced Tax. I trust, by this
time all the members have pad up for their challenging role as
an Auditor.
The conference on International Taxation was a grand success
& best of the best faculties
across the nation have shared on recent trends & emphasized
on more development &
challenges to come in this area.
As all of you are aware that WIRC and Central Council are going
to elect new members in
the Council in the forthcoming Elections to be held on 4th and
5th December 2015.
During the call of nation in May 2015 to choose the leader of
our democratic nation,
Baroda Branch had started a special campaign for Elections 2015
to urge voters to come
forward and vote. Once again, Baroda Branch is urging the
members to keep their dairies
open for December 4th and 5th to choose the able representatives
from our fraternity on
the WIRC and Central Council platform.
CA. Yash N. Bhatt
Chairman
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Baroda Branch of WIRC of ICAI
2Reality is that which, when you stop believing in it, doesn't
go away
Forthcoming Events
CPE 2
Day & Date :
Time :
Topics :
Faculty :
Mentor :
Venue :
Fees :
Tuesday, September 08, 2015
06.00 pm to 08.00 pm
Conference Room, ICAI Bhawan
Rs. 200/- (for Non-Members)
Removal of goods under excise & import of inputunder FTP
CA. Jigar Parikh
Mr. Sreeram Kaza, GM Taxation, Alembic Ltd
STUDY CIRCLE EVENT
Direct Tax UpdatesWritten by CA. Narendra Hindocha
1. Forms of Returns
Forms ITR 3,4, 5,6 and 7 have been notified which will now
enable us to file returns of business income and income of
corporates.
There are
There are number of similar issues including claim
for setoff of unabsorbed losses against business income
assessed under a different head or considering the profit on
sale of depreciable assets as long term gains or addition of
cess on rate prescribed in DTAA.
The new forms, inter alia, require ask for details of all
bank
accounts, Adhar numbers. Passpor t numbers, CSR
expenditure, deduction u/s 32AC, date of formation of HUF,
rate of interest and remuneration paid to and changes in
partners, interest to nonresidents, amounts under capital
gains scheme which is unutilized, claim for benefit under
DTAA, foreign assets and income, details of expenditure and
income for agriculture etc.
The schedules for income under different heads,
depreciation,
unabsorbed losses, MAT calculations, income outside India
deductions etc are required only if applicable which is hardly
a
relief in times when returns are being prepared by software
and whether software attaches such blank schedules or not is
hardly relevant for us.
I have been wondering about the wisdom of notifying new
forms every year. In earlier times, the forms did not change
every year and even after change, returns in old forms were
filed and accepted. I am sure forms can be devised which can
be used for number of years in spite of changes in
Income-tax
Act(assuming there is justification for such changes every
year)
E filing sometimes makes forms more powerful than
substantive law. judicial decisions that allow
remaining 50% of additional depreciation in next year, in
case of assets used for less than 180 days. However, you
may not be able to make the claim as there is no place in
the form.
2. Cost inflation index
3. Carry forward of excess expenditure in case of
CharitableTrusts
4. Effective date of new condition in section 80IB(10)
5. Disallowance u/s 40(a)(ia) when tax deducted under
wrongprovision
For the computation of long term capital gains, videNotification
dated 24th July, 2015, 1081 is notified as the costinflation index
for the financial year 2015-16.
From a prima facie reading, provisions of Income-tax Actrelating
to Charitable Trusts allow exemption of income spentfor the objects
of the trust and in case the amount spentexceeds the income, `Nil’
income may be reported. Somejudicial decisions allowed carry
forward of amount spent inexcess of the income, to be adjusted
against future income,although there is no provision allowing carry
forward of loss ordeficit as far as such trusts are concerned.
Decision in case of Anjuman-E-Himayath-E-Islam v.Assistant
Director of Income-tax (Exemption)-IV, Chennaireported at [2015] 59
taxmann.com 379 (Chennai - Trib.)appears to logically explain and
restrict the right for such carryforward.
According to the decision, excess application of funds overand
above income of trust can arise only when funds areapplied from the
corpus of the trust, accumulated funds, loansor goods and services
received from the creditors. Whenfunds are applied from borrowed
funds or by way of sundrycreditors the same can be treated as
application of funds in theyear in which such loan/sundry creditors
are repaid from theincome of the trust.
Section 80IB(10) allows deduction in respect of profits
ofHousing projects. To clarify and avoid granting benefit
inunintended cases, there was change of law with effect fromApril
1, 2005. Accordingly, the deduction was restricted tocases where
area utilised for shops and commercialestablishments does not
exceed 5 per cent of aggregate built-up area of housing project or
2,000 sq. feet, whichever wasless. Normally this would be
understood as applying toAssessment Year 2005-06 onwards, but this
would be unfairfor projects which were in progress. High courts had
held thatthe amendment
Thisview is now
Courts have generally looked upon 40(a)(ia) as an unfair incases
of failure to deduct tax at source or deposit it with theGovernment
within prescribed time. Earlier decisions held
However, when amount is applied fromthe corpus fund or
accumulated fund the same cannot betreated as application of funds
under section 11, becausesuch funds have already been exempt from
the income oftrust in the year in which they are received or such
amountis set aside.
does not apply to projects where approvalof local authority was
received prior to April 1, 2005.
confirmed by Supreme Court in case of CITv.Sarkar Builders
reported at 375 ITR 392
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Baroda Branch of WIRC of ICAI
A man with outward courage dares to die; a man with inner
courage dares to live3
Judicial Decisions on
Excise and Service TaxReviewed By CA. Anirudh Sonpal
that the disallowance will apply onlyin case of total
non-deduction and notin case of deduction at lower rate.
holding that the expression "taxdeductible at source under
ChapterXVII-B" occurring in section 40(a)(ia)has to be understood
as tax deductibleunder the appropriate provision ofChapter XVII-B.
Therefore, if tax isdeductible under section 194J but isdeducted
under section 194C, therequirements of section 40(a)(ia) arenot
satisfied.
Decision at [2015] 60 taxmann.com6 9 ( K e r a l a ) i n c a s e
o fCommissioner of Income-tax-1,Kochi v. P V S Memorial HospitalLtd
takes a non-charitable view
A deduction under thewrong provision of law will not savethe
assessee from disallowance u/s40(a)(ia).
I. TIME LIMIT FOR FILING APPEALS
II. REFUND
1.1 In case of delay of 182 days in filingwrit appeal before the
High Court,which dismissed the writ on accountof the delay, the
Honourable SupremeCourt observed that the High Courtshould have
condoned the delay sincean important question of law on levyof
service tax was involved.[UoI vs Perayam Subhash – SC]
1.2 In computing time limit to file anappeal, the date on which
order isserved on the assessee has to beexcluded.[Rotomac Global
Pvt Ltd vs CCE,Kanpur – H.C. Allahabad]
2.1 Refund of unutilized cenvat credit ofservice tax against
export of servicescannot be denied only for the reasonthat the
premises, from where theservices had been exported, had notbeen
registered under the provisions;the premises had been
registeredsubsequent to the cenvat credit beingaccumulated.[Embitel
Technologies (India) Pvt Ltd
vs CST, Bangalore – Cestat – Bang]
2.2 Provisions of unjust enrichment notapplicable to refund of
service tax paidon export of services.[CST, Mumbai vs Pulcra
Chemicals(India) Pvt Ltd – Cestat – Mumbai]
2.3 Interest on delayed refunds would bepayable to assessee only
on amountof duty and not on refund of fine andpenalty[CC(Ports),
Kolkata vs CoronationSpinning India – SC]
2.4 When the respondents wereregistered for import of capital
goodsunder project import and made a cashsecurity deposit at the
time of theregistration of the project, the bar ofunjust enrichment
was not applicableat the time of refund of such securitydeposit.[CC
vs Pioneer Power Corporation Ltd– Cestat Chennai]
The ser vice recipient is notresponsible for examining
thecorrectness of the service tax paid toservice provider; the
recipient ofservices can claim cenvat credit ofservice tax charged
by the serviceprovider and paid to the serviceprovider by the
recipient and therevenue authorities cannot disputeapplicability of
service tax at thereceiver’s end.[India Vision Satellite
Commu-nications Ltd vs CCE&ST, Cochin –Cestat – Bang]
Extended period cannot be invokedwhen all facts came to
knowledge ofrevenue authorities and SCN issued22 months thereafter,
particularlywhen the SCN did not specifyde l ibera te act amount
ing tosuppression with intention to evadepayment of
duty.[CCE&ST vs Triveni Engineering &Industries Ltd – H.C.
Allahabad]
5.1 While arriving at the assessable value
for the retail sale price u/s 4A of the
CEA,1944, an amount of abatement
III. CENVAT CREDIT
IV. EXTENDED PERIOD
V. VALUATION
specified by notification can only be
deducted - there is no provision under
the law to exclude warranty charges
from the RSP - statutory provision
under Section 4A cannot be altered or
influenced merely because the
appellant has chosen to discharge
service tax on the warranty portion of
the retail sale price.[Videocon Industries Ltd vs CCE –
Cestat Mumbai]
5.2 Transfer of the right to procure duty
free impor ted raw material is
additional consideration to be
included in the value of the goods.[CCE vs Indorama Synthetics
(India)
Ltd – S.C.]
No Service tax can be levied on
indivisible Works Contracts prior to
June 1, 2007[CCE & Customs, Kerala & Others vs
Larsen & Toubro Ltd & Others – SC]
VI. WORKS CONTRACT
3-DWritten by CA. Abhay Desai
PROVISIONAL ATTACHMENT UNDER THEGVAT/CST ACT
Lao Tzu said “The key to growth is theintroduction of higher
dimensions ofconsciousness into our awareness”.Thinking about an
issue only from one-dimension may result in faulty action. This
isalso true for indirect taxes. One has to thinkfrom all points of
view to get the bestanswer. This column attempts to discussvarious
issues pertaining to indirect taxesfrom all the three dimensions
i.e. CentralExcise, Service Tax & VAT.
PROVISIONAL ATTACHMENT – LEGALPROVISIONS
1. Sec. 45 of Gujarat Value Added TaxAct (GVAT Act) deals with
provisionalattachment. As per the said section, ifdur ing the
pendency of anyproceedings of assessment orreassessment of turnover
escapingassessment, if Commissioner is of theopinion that for the
purpose ofprotecting the interest of revenue it isnecessary to
attach the property of a
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Baroda Branch of WIRC of ICAI
In prosperity, our friends know us. In adversity, we know our
friends 4
dealer, he may by order in writingattach provisionally any
propertybelonging to the dealer. Property canbe provisionally
attached for amaximum period of one year. Rule 41of Gujarat Value
Added Tax Rules,2005 (GVAT Rules) provides thatCommissioner has to
pass an ordermentioning the details of property thatis attached. If
the property attached isof immovable nature, he shall
sendintimation to the land revenueauthority to endorse a charge on
saidproperty. If the property is of aperishable nature,
provisionallya t t a ched p rope r t y sha l l b eimmediately
released on payment ofthe market price of said property. If
thedealer fails to pay the same,Commissioner shall dispose of
suchproperty and adjust the amountrealized against the tax
liability. Thusonly condition required to be satisfiedbefore making
provisional attachmentis formation of an opinion that in orderto
protect the interest of revenue,attachment is needed. Let us now
lookat judicial pronouncements on thesame.
2. Hon. Andhra Pradesh High Court incase of B.J. Services
CompanyMiddle East Ltd. V. Commercial TaxOfficer, Kakinada and
others [2007]10 VST 597 (AP) had an occasion tointerpret the
provisions contained inAndhra Pradesh Value Added Tax Act,2005 with
respect to provisionalattachment. In this case, departmentmade
provisional attachment on thelikelihood of raising heavy
demandswhen assessment was made. Hon.High Court held that it is
abundantlyclear from bare perusal of theprovision that an order of
attachmentcan be made where the prescribedauthority frames an
opinion that suchorder is necessary to be passed for
PRINCIPLE:
LIKELIHOOD OF RAISING HEAVYD E M A N D N O T A G R O U N D F O
RPROVISIONAL ATTACHMENT
Formation of an opinionthat to protect the interest of
revenueprovisional attachment is done ismust.
the purpose of protecting the interestof the Revenue. Likelihood
of raisingheavy demand cannot be the groundfor making provisional
attachment.
3. In case of Carlton Industrial Engineersv. Commercial Tax
Officer, Kakinadaand another [2007] 9 VST 77 (AP),Hon. High Court
held that provisionalattachment can be made only duringpendency of
any assessment orreassessment proceedings. It cannotbe made when
order has already beenpassed. Even u/s 45(1) of GVAT
Act,provisional attachment can be doneonly when proceedings are
pending.
4. In case of Pratik Manhendra Gandhi v.State of Gujarat and
Another [2013]63 VST 178 (Guj), Hon. Gujarat HighCour t he ld tha t
p rov i s iona lassessment under section 45 of theAct, is a drastic
measure. In this caseprovisional attachment of the bankaccount as
well as stock of the dealerwas made by the department on
theapprehension that the dealer hadpurchased goods from
supplierswhich regis t ra t ion has beencancelled. It was submitted
on behalfof petitioners that the purchases weremade before the date
on which orderof cancellation was made. It wassubmitted that there
was nodiscrepancy in the physical and bookstock when department
visited thepremises of the dealer. Hon. HighCour t considered the
abovesubmissions and opined that makingfull attachment of the stock
willhamper the business of the dealer.Thus it devised a workable
formulawherein dealer was required tomaintain a minimum level of
stock andprovisional attachment was ordered
PRINCIPLE:
NO PROVISIONAL ATTACHMENT IF NOPROCEEDINGS ARE PENDING
PRINCIPLE:
FACTORS TO BE CONSIDERED BEFOREMAKING PROVISIONAL ATTACHMENT
Likelihood of raisingheavy demand cannot be a ground formaking
provisional attachment
Provisional attachmentcannot be made if no proceedings
arepending.
to be lifted so that dealer can continuethe business. Ratio of
the saiddecision is that interest of trade andbusiness, prima facie
merits of thecase as well as interest of revenuemust all be
considered before makinga provisional attachment.
5. Hon. Gujarat High Court in case ofViramgam-Mahesana Project
Ltd. andAnother v. State of Gujarat and Others[2012] 55 VST 149
(Guj) has held thatattachment of bank account cannotcontinue beyond
a period of one yearu/s 45 of the GVAT Act.
6. Hon. West Bengal Tribunal in case ofVikash Iron & Steel
Pvt. Ltd. V. CTO(2009) 19 VST 224 (Trib)(WB) hasheld that what is
permitted under thelaw is attachment wherein the ownercannot
transfer or create a charge inany which way. However it does
notpermit sealing the business place. Inthis case, Tribunal even
awardeddamages which were payable by thedepartment for illegal
sealing ofbusiness premises.
7. Hon. Andhra Pradesh High Court incase of D. Pitchaiah v.
AssistantCommercial Tax Officer [1987] 66STC 283 (AP) held that the
assessingauthority had no jurisdiction to restraina third party
from making payments tothe dealer, before making a
provisionalassessment, in order to recover thetax. In this case
assessing authority
PRINCIPLE:
T I M E L I M I T O F P R O V I S I O N A LATTACHMENT
PRINCIPLE:
ONLY ATTACHMENT IS PERMITTED,SEALING IS NOT
PRINCIPLE:
THIRD PARTY CANNOT BE RESTRAINEDFROM MAKING THE PAYMENT
Interest of trade, value ofimmovable property offered
assecurity, merits of the case as well asinterest of revenue must
be balancedb e f o r e m a k i n g p r o v i s i o n a
lattachment.
Attachment can continueonly for a maximum period of one year
Sealing of businesspremises is not permitted u/s 45 ofthe GVAT
Act.
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Baroda Branch of WIRC of ICAI
Beliefs are the eyelids of the mind5
issued a notice to the third partyrestraining them from paying
theamount of Rs. 8 lakhs to the petitioner.Neither provisional
assessment norregular assessment was made in thiscase.
8. Similarly same court in the case of K.Digamber v. Commercial
Tax Officer(2000) 118 STC 104 (AP) held thatwhere an assessment of
a dealer is yetto be finalized it is not open to theauthorities to
issue a notice inanticipation to the bankers not topermit the
dealer to operate hisaccounts
9. Hon. Bombay High Court in case ofPremium Paper and Board
IndustriesLtd. v. Joint Commissioner of SalesTax [2012] 51 VST 382
(Bom) hasheld that an order of provisionalattachment cannot be
passed afterfurnishing an opportunity of beingheard as monies
sought to beattached may be spirited away,however sub-section (5)
of section 35empowers the person or dealer tomake an app l ica t
ion to theCommissioner within fifteen days ofthe service of the
order under sub-section (1) and upon such applicationbeing made,
the Commissioner isrequired to afford a reasonableopportunity of
being heard andthereafter to proceed to confirm,modify or cancel
the order. Under sub-section (6) a substantive appeal isprovided to
the Tribunal against anorder passed under sub-section (5).Hence it
was held that sufficientsafeguards are provided in the law.
10. However under Sec. 45 of GVAT Act,no such safeguard as
contained underthe Bombay Sales Tax Act has beenprovided. But as
per Sec. 73(1) anappeal from every original order, notbeing an
order mentioned in section74, passed under this Act or the rulescan
be made. Provisional attachment
PRINCIPLE:
REMEDY AGAINST PROVISIONALATTACHMENT
Third party cannot berestrained from making the paymentto the
dealer.
order being an original order, appealcan be filed against the
same.
11. On the issues of detention of the dealerto recover the dues
as arrears of landrevenue, Hon. Delhi High Court incase of Harmeet
Singh Ghai v. AnandS. Khullar, Deputy Commissioner(Recovery), Sales
Tax and Others(and other cases) has laid down a verysound principle
that detention isjustifiable only when it can beestablished that
the detainee has themeans but is willfully withholding thepayment
of dues and detention willthus force him to pay the dues.
Incircumstances where the dealergenuinely has no means to pay
thedues, detention is not warranted. Ithas held that from the
scheme of theDelhi Land Reforms Act, 1954, andthe Rules made
thereunder and inparticular rule 119 of the LandReforms Rules, it
is clear that thougharrest and detention of a defaulter isone of
the modes of recovery of anarrear of land revenue, a warrant
ofarrest under section 138 of the DelhiLand Reforms Act cannot be
madeand issued casually or on a merereceipt of the recovery
certificate.Rule 119(2) of the Land ReformsRules requires
production of thedefaulter, who is arrested, before theofficer who
issued the warrant withoutdelay and mandates that suchdefaulter
shall not be detained incustody unless there is reason tobelieve
that the process of detentionwill compel the payment of the wholeor
a substantial portion of the arrears.The said sub-rule, thus,
necessitatesan inquiry into the question or aconscious attempt to
ascertain if thedetention of the defaulter would beproductive of
payment of arrears or asubstantial portion thereof. Thoughthere is
nothing in section 138 of theDelhi Land Reforms Act or rule 119
ofthe Land Reforms Rules requiring thedetaining authority to give
an
PRINCIPLE:
DETENTION OF DEALER
Appeal can be filedagainst the order of
provisionalattachment.
opportunity to the defaulter of beingheard, he has to consider
if anyevidence is tendered or submissionsare made by the defaulter
in this behalfand then find out if there is anyjustification for
detaining the defaulter.It is only after he records hissatisfaction
that the detention of thedefaulter will compel him to make
thepayment of the whole or a substantialpart of the arrears that he
can directthe detention of the defaulter. Thedetaining authority
has to consider thematter from this angle and satisfy himthat the
defaulter has the means but iswillfully withholding payment or
isfraudulently evading payment. If he isnot so satisfied, the
officer is under anobligation to release the defaulter. Thisis the
condition precedent for orderingdetention of the defaulter.
SimilarlyHon. Madras High Court in case of G.Gopalakrishan and
Another v. DeputyCommissioner of Commercial Taxes,Salem and Others
[1988] 70 STC 293(Mad) has held that an order of arrestand
imprisonment of the defaultercannot be made unless the arrearsdue
from the defaulter cannot beliquidated by sale of the property
ofthe defaulter or of his surety, andunless the Collector has
reason tobelieve that the defaulter or his suretyis willfully
withholding payment of thearrears or has been guilty of
fraudulentconduct in order to evade payment.
PRINCIPLE: A detention of adefaulting dealer can be done only if
itcan be established that the detaineehas the means but is
willfullywithholding the payment of dues anddetention will thus
force him to paythe dues.
Indirect Tax UpdatesWritten by CA. Manilal Parsiya
Notification No. 18/2015-Central Excisedated 06.07.2015
(N.T.)
in pursuance of Rule 10(5) and Rule 11(9)of the Central Excise
Rules, 2002 and Rule5(5) and Rule 4C(2) of the Service TaxRules,
1994, the CBEC specified conditions,safeguards and procedures for
issue of
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Baroda Branch of WIRC of ICAI
Never fear to dream. Dreams are sacred visions of realities
6
invoices, preserving records in electronicform and
authentication of records andinvoices by digital signatures,
namely:-
1. Use of digital signature of Class 2 orClass 3 Digital
Signature Certificate.
2. Intimation to the jurisdictional DC orAC, at least fifteen
days in advance: a)name, e-mail id, office address anddesignation
of the person authorisedto use the digital signature certificate;b)
name of the Certifying Authority;c) date of issue of digital
certificateand validity of the digital signaturewith a copy of the
certificate, thecomplete address of the saidAuthority. Any change
in the detailssubmitted, complete details shall besubmitted afresh
within fifteen days ofsuch change.
3. Every assessee already using digitalsignature shall intimate
to thejurisdictional DC or AC the abovedetails within fifteen days
of issue ofthis notification.
4. Every assessee who opts to maintainrecords in electronic form
and whohas more than one factory or servicetax registration shall
maintainseparate electronic records for eachfactor y or each ser v
ice taxregistration.
5. Every assessee who opts to maintainrecords in electronic
form, shall onrequest by a Central Excise Officer,produce the
specified records inelectronic form and invoices throughe-mail or
on a specified storage devicein an electronically readable format
forverification of the authenticity of thedocument and the request
for suchrecords and invoices shall bespecified in the letter or
e-mail by theCentral Excise Officer.
6. A Central Excise Officer, during anenquiry, investigation or
audit, maydirect an assessee to furnish printoutsof the records in
electronic form andinvoices and may resume printouts ofsuch records
and invoices afterverifying the correctness of the samein
electronic format; and after the printouts of such records in
electronicform have been signed by the
assessee or any other personauthorised by the assessee in
thisregard, if so requested by suchOfficer.
7. Appropriate backup of records inelectronic form is maintained
andpreserved for a period of 5 yearsimmediately after the financial
year towhich such records pertain.
8. This notification shall come into forceon the date of its
publication in theOfficial Gazette.
Waiver of issuance of SCN: On assesses’request for an informed
waiver of a writtenSCN. In a case involving the extended periodof
limitation, if an assessee pays thetax/duty amount, interest and
penalty equalto 15% of the tax/duty and makes a requestin writing
for non-issuance of written SCN,then in such cases the SCN can be
oral andthe representation (if he desires) against italso be
oral.
If the grounds on which the Departmentfeels that there has been
short/non-payment of tax/duty are intimated to theassessee orally
with its quantification andthe assessee indicates in writing that
he hasbeen informed about such grounds and heaccepts the grounds
and the quantificationand is waiving the requirement of a
writtenSCN, then a written SCN need not be issued.
In terms of Section 78 of the Finance Actand Section 11AC of the
Excise Act, 30 daysperiod within which the assessee may makethe
payment of tax/duty, interest andreduced penalty of 15%, is
computed fromthe date of service of SCN. In case theassessee makes
a written request for waiverof a written SCN, the 30 days period
can becomputed from the date of receipt of such aletter by the
Department.
There is no bar on an assessee making thepayment of tax/duty,
interest and reducedpenalty of 15% even before the date ofreceipt
of such a letter by the Department.
An officer equal in rank to the officer who iscompetent to
adjudicate such cases shallapprove the conclusion of the
proceeding.
Instruction F. No. 137/46/2015-ST dated18.08.2015 has issued
clarification asunder
Conclusion of Proceedings
The of f icers of DGCEI /Execut iveCommissionerate/Audit
Commissioneratecan close the case. The sum total involved inall the
issues arising from the sameproceedings should be considered
forconclusion of proceedings, in case ofmultiple issues with
different monetaryvalues arising from the same proceeding.The
intimation for such conclusion shall begiven in writing to the
assessee.
Provisions under Section 73(3) of theFinance Act and Section
76(i) thereof haveto be read harmoniously to conclude that
innon-fraud cases, if the assessee pays thetax along with interest,
either within 30 daysof issuance of SCN or before issuance ofSCN,
then in such cases proceedings shallbe deemed to be concluded.
Legalprovisions for similar closure under theCentral Excise are
present in clause (a) ofsub-section (1) of Section 11AC of
theExcise Act.
FAQs on Ind AS 33:Earnings Per Share
Written by CA. Prashant Upadhyay
1) Whether Earnings Per Share(EPS) isrequired to be disclosed
inConsolidated Financial Statementsas well as Separate
FinancialStatements?
2) What are major terms used in thestandard?
Yes. When an entity presents bothconsolidated financial
statements &separate f inancial statementsprepared in
accordance with Ind AS110, Conso l ida ted F inanc ia lStatements,
and Ind AS 27, SeparateFinancial Statements, respectively,the
disclosures required by thisStandard shall be presented both inthe
consolidated financial statementsand separate financial
statements.
Anti-dilution as against dilution is anincrease in EPS or
reduction in lossper share resulting from assumptionthat conver
tible instruments areconverted that options or warrants
areexercised or ordinary shares areissued on satisfaction of
specifiedconditions.
Contingent share agreement is an
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Baroda Branch of WIRC of ICAI
Life without any wonder left in it is flat and stale7
agreement to issue of shares(Contingently issuable
ordinaryshares) that is dependent onsatisfaction of specified
conditions.
Option, warrants and their equivalentsare financial instruments
that give theholder the right to purchase ordinaryshares (potential
ordinary shares).
Put options on ordinary shares arecontracts that give the holder
the rightto sell ordinary shares at a specifiedprice for a given
period.
The amount in respect of such itemswhich should be recognized in
Profit &Loss statement shall be reduced orincreased as the case
may be fromProfit or loss from continuingoperations for the purpose
ofcalculating EPS.
Followings are different situations andrelevant dates for
considerationreceivable:
a) For issue of shares at cash, whencash is receivable.
b) Fo r i s s u e o n v o l u n t a r yreinvestment of dividends
onordinary / preference shares,when dividends are reinvested.
c) F o r i s s u e a g a i n s t d e b tinstruments, from date
wheninterest ceases to accrue.
d) For issue against interest or
3) An entity had incurred an expense &earned an income which
should berecognised in Profit & Lossstatement in terms of
IndianAccounting Standard. However, theentity recognized the said
item insecurity premium account or anyother reserves forming part
ofreserves & surplus. Whether theitem should be adjusted in
earningfor the period for the purpose ofcalculation of EPS?
4) Para 21 of the standard stipulatesthat weighted average
number ofshares should be calculated bytaking date of
considerationreceivable for issue of shares. Whatis the relevant
point of time underdifferent scenario when shares areissued?
principal on other financialinstruments, date that
interestceases to accrue.
e) For issue against settlement ofliability, the date of
settlement.
f) For acquisition of asset (otherthan cash), date on
whichacquisition is recognised.
g) For issue against renderingservices, date when services
arerendered (irrespective of date ofb i l l i ng o r recogn i t i
on inaccounts).
h) Para 22: For considerationagainst business combination,date
of acquisition as the acquirerincorporates into its statement
ofprofit or loss the acquiree’s profitand losses from that
date.
i) Para 23: For shares to be issuedmandatorily on conver
tibleinstrument should be included incalculation since the contract
isentered into.
j) Para 24: Contingently issuableshares are to be incorporated
incalculation only from the datewhen all necessary conditionsare
satisfied (ie. The events haveoccurred). Due to involvement
ofdefinite period of time, thetreatment is given
accordingly.Contingently returnable (subjectto recall) are not
treated asoutstanding and are excludedform calculation until date
theshares are no longer subject torecall.
Diluted EPS shall be calculated byadjusting profit or loss
attributable toordinary equity holders of the entityand the
weighted average number ofordinary shares outstanding for
theeffects of all dilutive potential ordinaryshares.
The profit or loss attributable toordinary equity holders of
entity isadjusted for after tax effects of:
a) Any dividend or other itemsrelated to dilutive potential
5) What are considerations fordetermining diluted EPS?
ordinary shares deducted inar r iving at profi t or
lossattributable to equity holders
b) Any interest recognized in theperiod related to dilutive
potentialordinary shares
c) Any other changes in income orexpense that would result
fromconversion of the dilutivepotential ordinary shares
d) The number of ordinary sharesoutstanding plus the
weightedaverage number of ordinaryshares that would be issued onthe
conversion of all dilutivepotential ordinary shares intoordinary
shares.
In cases where number of sharesoutstanding is affected as a
result ofcapitalisation, bonus issue, share splitor a reverse share
split, the calculationof basic EPS and diluted EPS shouldbe
adjusted retrospectively. In casesof bonus issue, it should be
alwayspresumed that the bonus shares wereissued on the very
beginning of thefinancial year, even though issued atany point of
time in the financial year.
In terms of Para 66, statement of profitor loss should
incorporate basic anddi luted EPS from cont inuingoperations
attributable to parent entityfor the period of each class of
holdersof equity shares that has different rightto share in profit
for the period. Entityshall present basic and diluted EPSwith equal
prominence for all periodspresented.
In terms of Para 70, an entity shalldisclose:
a) Amounts used as numerator inc a l c u l a t i n g E P S a n
dreconciliation of amounts of profitor loss. Reconciliation
shallincorporate individual effect ofeach class of instruments
thataffects EPS.
b) Weighted Average Number of
6) In which situations the EPS shouldbe restated?
7) What are presentation & disclosurerequirements of the
standard?
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Baroda Branch of WIRC of ICAI
Impression, not oppression determines the real life of a real
person 8
Shares used as denominator &r e c o n c i l i a t i o n o f
t h e s edenominators to each other.Reconciliation shall
incorporateindividual effect of each class ofinstruments that
affects EPS.
c) I n s t r u m e n t s ( i n c l u d i n gcontingently
issuable shares) thatcould potentially dilute EPS infuture, but
were not included incalculation of EPS because theyare
anti-dilutive for the periodspresented.
d) A description of ordinary sharetransactions or potential
ordinaryshare transactions, other thanthose accounted for
underretrospective adjustments, thatoccur after the reporting
periodand that would have changedordinary shares outstanding atthe
end of the period if thosetransactions had occurred beforethe end
of the reporting period.
Sr. Ind AS 33 AS 20
8) What are major deviations of AS 33from AS 20:
1) R e q u i r e spresentation ofE P S f r o mc o n t i n u i n
g &d i s c o n t i n u e do p e r a t i o n sseparately.
2) D e a l s w i t hoptions held bythe entity on itss h a r e s
e g .P u r c h a s e soptions, writtenput options etc.
3) Not dealt withsince Ind AS 1presentation off i n a n c i a ls
t a t e m e n t ss p e c i f i c a l l ystates that noi n c o m e o
rexpense can berecognized andp resen t ed asext ra-ord inar
yitem.
Does not requiresuch presentation.
Not dealt with by theexisting standard.
Requires disclosureof EPS with andw i t h o u textraordinary
items.
ICAI CORNERComplied by : CA Pradeep K Agrawal &
CA Rahul H Parikh, BarodaSource: www.icai.org
A-Brief of few announcements by ICAI from1-Aug-15 to
31-Aug-15:
1 Clarifications on some commonlyasked queries pertaining to
electedrepresentatives of ICAI and thegeneral members of ICAI -
(29-08-2015)
The Council at its 345th Meeting held on14th-16th August, 2015,
whileconsidering recommendations ofEthical Standards Board on the
belowmentioned issues, decided as under :-
• It is permissible for the electedrepresentatives of the ICAI
to replyto the general queries of memberson email , mentioning
theirrespective designation(s) held inICAI at present and/or in
past alongwith their photograph as signatureof the email. Likewise,
it is alsopermissible for the generalmembers to reply to the
members’queries on email, along with theirphotograph as signature
of theemail.
• It is permissible for electedrepresentatives of the ICAI, as
wellas for the general members of theICAI to put their photograph
on anyelectronic media to enable theireasy identification. However,
thereis no change with regard to theexisting restriction on
printing ofphotographs on official stationerylike visiting cards,
letterheads etc.
• It is permissible for the electedrepresentatives of the ICAI
to eithermention their designation(s) inICA I , as s ta ted above
oralternatively to use their firmname/professional designation
incommunications sent on emails.However, the simultaneous use
ormention of designation(s) ofelected representative of ICAI andof
the firm name /professionaldesignation, is not permissible.Further,
in case of mass emailssent either by the electedrepresentatives of
ICAI or the
general members of ICAI, whileusing the firm name, the
expression“chartered accountants” is notpermissible.
• The elected representatives of theICAI may share decisions
(withmembers/students) taken by theC o u n c i l . H o w e v e r, m
e r ediscussions, recorded in anymode, e.g. verbatim or audio
tapesetc., should not be shared. It wouldbe the responsibility of
therepresentative sharing the decisionto ensure the completeness
andcorrectness of the decision soshared.
• It is permissible for the electedrepresentatives of the ICAI
as wellas for general members to sharethe Institute’s
events/Pictures/CALogo and banners through SMS/emails /Websites,
including thesocial networking sites, withm e m b e r s / s t u d e
n t s / n o n -members/public. However, thestand alone use of image
of the ICAIEmblem is not permissible, exceptwhere it incidentally
forms part ofthe background while appearing ona picture/banner
etc.
• The permission granted under para1 to the elected
representatives ofICAI regarding use of thephotograph and mention
of the past/present designation(s) held in ICAIas well as the
permission to generalmembers regarding use ofphotographs , shall
extend to theeventualities mentioned in para 5also.
For the purposes of thisAnnouncement, the
electedrepresentative(s) of ICAI shallmean and include the
electedmembers of the Central Council,elected members of the
RegionalCouncils and of the ManagingCommittees of Branches
ofRegional Council. The abovedecisions shall come into forcewith
immediate effect.
(For details:
http://www.icai.org/new_post.html?post_id=11862&c_id=219)
Note:
-
Baroda Branch of WIRC of ICAI
9 If anyone doesn't agree with you, the truth is on your
side
2- Revised announcement-Mechanismto Monitor Tendering:
(24-08-2015) :
3 A Report on Audit Quality ReviewFindings (2012-15) -
(18-08-2015):
The Council at its 345th meeting heldfrom 14th to 16th August,
2015considered the concerns raised bymembers on the decision of the
Councilwith regard to mechanism to monitortendering hosted on the
website of theInstitute on 22nd July, 2015. After dueconsideration
of the same, the Councilat its aforementioned meeting hasreferred
this matter to the group alreadyconstituted under the convenorship
ofCA. Tarun Jamnadas Ghia, Member,Central Council for the
examination ofthe concerns so raised and the date ofapplicability
of the said announcement.The revised announcement along withits
applicability date will be announcedseparately. (Secretary,
ICAI)
(For details:
http://resource.cdn.icai.org/38929pdcrevisedann240158.pdf)
Government of India has, in exercise ofthe powers conferred
under Section28A of the Chartered Accountants Act,1949, constituted
a Quality ReviewBoard (the ‘Board’) to perform thefollowing
functions u/s 28B of theChartered Accountants Act, 1949:-
a) to make recommendations to theCouncil with regard to the
quality ofservices provided by the membersof the Institute;
b) to review the quality of servicesprovided by the members of
theInstitute including audit services;and
c) to guide the members of theInstitute to improve the quality
ofservices and adherence to thevarious statutory and
otherregulatory requirements.
The Board has brought out ‘AReport on Audit Quality
ReviewFindings (2012-15)’ providingana lys is and summar y ofobser
vat ions made by theTechnical Reviewers in reviewrepor ts completed
during thefinancial years 2012-15. The reportis accessible at the
weblinkh t t p : / / w w w. q r b c a . i n / w p -
content/uploads/2015/07/qrb28179.pdf. It is hoped the
variousstakeholders will find it useful and itwould go a long way
in improvingthe overall quality of auditing.
(For details
http://www.icai.org/new_post.html?post_id=11828&c_id=219)
In view of the low number of candidatesapplying for appearing in
the SpecialExamination for members of the foreignaccounting
bodies/Institutes withwhom ICAI had en te red in toMRA/MOUs, it has
been decided by theExamination Committee that the saidSpecial
Examination, will henceforth beheld once a year in the month of
Juneonly, as against the current practice ofholding them, twice a
year in themonth/s of June and January.
Accord ing ly, the next Specia lExamination for members of
foreignaccounting bodies/ Institutes withwhom ICAI had en te red in
toMRA/MOUs, will be held in June 2016.Candidates are requested to
take note oft he abovemen t i oned change -Examination
Department
(For details:
http://resource.cdn.icai.org/38932examannoumra250815.pdf)
Applications are invited from eligiblemembers of the Institute
and otherprofessionals including academiciansof reputed educational
institutions, taxand legal practitioners etc., having a flairfor
academic activities includingvaluation of answer books and willing
toundertake confidential assignments asa dedicated examiner;
The eligibility criteria for empanelment
4 Holding of Special Examination formembers of foreign
accountingbodies/ Institutes with whom theInstitute of Chartered
Accountants ofIndia (ICAI) had entered into MutualR e c o g n i t i
o n A g r e e m e n t s( M R A s ) / M e m o r a n d u m o fU n d e
r s t a n d i n g ( M O U s ) t o b econducted once a year in the
month ofJune only-: (24-08-2015)
B-Opportunities for Members to contributeto our own ICAI :
1 Invitation for empanelment asExaminers for Chartered
AccountantsExaminations - (19-08-2015)
as examiner are as follows:
• Chartered Accountants with aminimum of four years standing
inpractice or in service are eligible toapply.
• University Lecturers/Professorswith a minimum of five
yearsteaching experience are eligible toapply.
• Lawyers, IT Professionals, MBA(Finance) and other
professionalswith at least five years’ experience,either in
academic position or inpractice or in employment areeligible to
apply. Those with workexperience having direct relevanceto the
aforesaid subjects(s) ofexamination(s) will be preferred.
• Persons above 60 years of age arenot eligible for empanelment
asexaminer.
• Persons who are visually impairedor suffer from such other
physicallydisability that might necessitatetaking the assistance of
any otherperson for evaluation of answerbooks are not eligible to
apply.
• Persons who are undergoing anycourse of the Institute are
noteligible to seek empanelment asexaminers.
• Those whose applications wererejected earlier or
rested/removedfrom the panel are not eligible toapply again.
Intermediate(IPC) 1-6 Rs 85/-per paper
Intermediate(IPC) 7A/7BSectionalpaperscarrying50 markseach
Final examination 1-8 Rs 110/-per paper
Examination Paper Rate
Rs 55/-per paper
Scale of honorarium for evaluation of answer books
Format of the application for empanelment canbe downloaded from
www.icai.org . Duly filled inapplication forms with all required
enclosuresmay be sent by speed post or registered post tothe
following address: The Deputy Secretary(Exams), ICAI Bhawan,
Indraprastha Marg, NewDelhi 110 002
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Baroda Branch of WIRC of ICAI
If your love for another person doesn’t include loving yourself
then your love is incomplete 10
Important Due Dates for September, 2015 Complied by CA. Abhijit
J. Kotecha
DATES COMPLIANCE PERIOD
05-Sep-15 Payment of Service Tax - Monthly Cases / Excise Duty
(for SSI & Non - SSI) Aug.' 15
06-Sep-15 E-Payment of Service Tax - Monthly Cases / Excise Duty
(for SSI & Non - SSI) Aug.' 15
07-Sep-15 TDS payment / E-payment Aug.' 15
Income Tax Return / E-return (excluding Statutory Audit / Tax
Audit Cases and the Working partners of thePartnership firm / LLP)
- Extended Date
08-Sep-15 VAT / CST E-Return - Monthly - with April to June
Stock Statement (For VAT or CST > Rs. 5,000/-) June' 15
10-Sep-15 Excise Returns - ( Monthly Return by Large Units /
Return by EOU / Monthly return of receipt & consumption ofeach
of Principal Inputs, assessees required to submit ER-5 return)"
13-Sep-15 VAT / CST E-return - Quarterly cases (including
Lumpsum Tax payers) Q1 (Fin. Yr.: 2015-16)
15-Sep-15 Advance Income Tax payment / E-payment - All Assessees
Asst. Yr.: 2016-17
Return of Professional Tax and PF (for employees joining &
leaving service) Aug.' 15
Payment of Professional Tax / PF / ESIC (employees) Aug.' 15
21-Sep-15 ESIC Payment & Return Aug.' 15
22-Sep-15 VAT / CST - payment / E-payment- Monthly Cases
Aug.'15
25-Sep-15 PF Return Aug.' 15
29-Sep-15 "VAT / CST - E-Return - Monthly (For VAT or CST
-
PHOTOFLASH
Baroda Branch of WIRC of ICAI
11 What you spend years building may be destroyed overnight.
Build anyway
ICAI International Tax Convention (2 days)
CA. Hitesh Gajaria
CA. Prashant Kotecha
CA. Sushil Lakhani
CA. Milin Mehta
CA. Rohan Phatarphekar
CA. Nilesh Mody
CA. Sanjay Tolia
CA. Nilesh Patel
CA. Shefali Goradia
Orientation Programme for Newly Qualified Chartered Accountants
on 5th August, 2015
CA. Ankur Maheshwari
Study circle meeting on Preparationand appearing before the
first
Appellate Authority on 18 8 2015
Mr. Jitesh Poptani
CA. Kartik PandyaCA. Manish Baxi CA. Bharat Kanani CA. Rahul
Mathur
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Baroda Branch of WIRC of ICAI
DISCLAIMER : The ICAI and the Baroda Branch of WIRC of ICAI is
not in any way responsible for the result of any action taken on
the basis of the advertisement published in the Newsletter. The
members,however, may bear in mind the provisions of the Code of
Ethics while responding to the advertisements. The views and
opinion expressed or implied in the Newsletter are those of the
authors / contributors and donot necessarily reflect those of
Baroda Branch. Unsolicited matters are sent at the owner's risk and
the publisher accepts no liability for loss or damage. Material in
this publication may not be reproduced, whetherin part or in whole,
without the consent of Baroda Branch. Members are requested to
kindly send material of professional interest to The same may
bepublished in the newsletter subject to availability of space
& editorial editing.
[email protected]/[email protected]
If undelivered, please return to :
Baroda Branch of WIRC ofThe Institute of Chartered Accountants
of India
www.baroda-icai.org WIRC : www.wirc-icai.org ICAI: www.icai.orgl
l
Back Cover (4 color) 15,000 Inside Front/Back Cover (4 color)
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appointed for this purpose.
This Newsletter is circulated without any charges to its members
and other important categories of recipients as per ICAI Advisory
on Newsletters. Subscription rate is Rs. 20/- per issuefor
others.
CA. Yash N Bhatt on behalf of Baroda Branch of WIRC of ICAI.
“ICAI Bhawan”, Kalali-Tandalja Road, Atladra, Vadodara - 390
012
Multiprints, 30/B, Gandhi Oil Mill Compound, Near BIDC, Gorwa,
Vadodara - 390016. Ph.: 0265-2285592
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+91 265 2681115 / 2680593 8511077115Telefax : M:
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12The good you do today will be forgotten tomorrow. Do good
anyway
Flag Hoisting on 69th Independence Day of India
C O N G R A T U L A T I O N
Congratulations
for being appointed as Co-Opted member of
"Swachha Bharat Abhiyan"
committee of WIRC.
CA. Atul Parikh