Monday, October 5, 2015

Company law-UPDATE

Update DG 21:

MCA Update on Deposit From Relative By Private Limited Company:

Deposits rules are quickly getting aligned with old 58A exempted rules to private limited company.

Without any upper limit of amount, now a private company can  accept unsecured loans apart from director even from a relative (as per definition) of a director of the company with simple declaration saying the relative has not borrowed same from others. The relative need not be a shareholder of the company.


Saturday, October 3, 2015

What is rapo and reverse rapo rate

Santa: I have heard recently that Mr. Rajan has reduced Repo Rate by 50 basis points and everyone is saying that this is good for the market. Loan EMI may also come down. What is this rate cut means actually? I want to understand this.

Banta: To understand this you first need to know, how does a bank function.

Santa: Why?

Banta: Because all these are inter-related. Tell me – what does a bank do?

Santa: Bank takes money from depositors and gives loan to earn interest. That way they keep everyone happy and make a profit also.

Banta: Correct, but there are more to it. Let me explain this in a very simplistic way. Bank needs money. Bank can get money from depositors like you and me and also from RBI. But bank also needs to pay certain interest to us and also to RBI.

Santa: Ok.

Banta: Let us try to understand first – what happens when we deposit, say, Rs. 100 with a bank.

Santa: I know that. Bank gives that Rs. 100 to someone who needs a loan.

Banta: No, it is not that simple. Remember, though bank can earn interest by giving away loans, but it is also very risky. There are many cases of loan defaults. This way banks can put all our money into high risk areas. It has to be protected.

Santa: How?

Banta: Ok, RBI has made it mandatory that upon receiving, say, Rs. 100 – banks first have to deposit Rs. 4 with RBI. RBI keeps this Rs. 4 in its current a/c and hence banks do not receive any interest on this money. This is known as Cash Reserve Ratio or CRR, which is currently at 4%.

Santa: Hmmm, then?

Banta: RBI has also made it mandatory that upon receiving, say, Rs. 100 – banks need to compulsorily buy central and state govt. securities of Rs. 21.50. Of course banks will earn some interest income here. This is known as Statutory Liquidity Ratio (SLR), which is currently at 21.50%.

Santa: Ok, so you mean to say that upon receiving Rs. 100, banks can spend only Rs. 74.50 at its own will.

Banta: Correct. 100 – (4 + 21.50) = 100 – 25.50 = 74.50

Santa: But you were saying that banks can also borrow from RBI. What interest banks pay to RBI?

Banta: Before 30th September, banks were paying 8.25% interest to RBI when it borrows money from RBI. Now this rate has been reduced by 50 basis points. So banks now need to pay interest to RBI, if it borrows from RBI, at the rate of 7.75%. This is known as Repo Rate.

Santa: Can fixed deposit rate be affected by reduction of Repo Rate?

Banta: Of course. If banks get money from RBI @7.75%, why will banks pay higher interest to you and me? One year FD rate is already revised by many banks and it is equal to or very close to 7.75%.

Santa: But as now banks are getting money at a cheaper rate, then they should reduce the loan interest rate i.e. passing on the benefits it receives.

Banta: Correct. They should. And on that hope market is cheering. If companies get loan at a cheaper rate, they will likely to expand their businesses. That will create more jobs, more income and boost the economy.

Santa: How is inflation linked to this?

Banta: See, when loan becomes cheaper, people tends to borrow more. That means people will have more money to spend. This will increase the demand for goods, and if supply does not increase to match this demand, then prices will increase.

Santa: So there is a chance, that inflation may rise also?

Banta: Well, yes. But inflation depends on many other factors as well, like production (industrial and agricultural), manufacturing, export – import, foreign currency movement etc. So inflation may increase or may not.

Santa: One last question. Like we deposit our money with banks, can banks also deposit their money with someone?

Banta: Yes, they can deposit with RBI and earn interest too. This interest is typically 1% less than the repo rate. This rate is known as Reverse Repo Rate.

Santa: Great! So now I understand CRR, SLR, Repo Rate, Reverse Repo Rate and their impact on deposit rate, loan interest rate and on inflation. Thanks.

Banta: Welcome!


18 Points for Annual filings to ROC

18 Points for Annual filings  to ROC

1. MGT-14 for Approval of Accounts & draft board report
a. Pvt Co. - Not Required
b. Public Co. - Required

2. New forms AOC-4 (earlier 23AC/23ACA) and MGT-7 (earlier 20B) are introduced for annual filings.

3. Board Report shall include various disclosures as per sec 134 & other section etc. and summary of annual report in MGT 9.

4. Auditor shall be appointed for a period of 5 years subject to ratification every year in AGM. However, ADT-1 shall be filed for appointment only (i.e. ADT-1, not to be filled for ratification). If GNL 2 had been validly filled for 5 years, no need to file ADT1 is to be filled for ratification.

5. Auditor or his A/R (qualified to be auditor shall be present in AGM, unless otherwise exempted by company (also mention in Minutes of the company) [Sec. 146]

6. All the attachments of E-form should be duly signed, Don't file SD copy.

7. MGT 7 i.e. Annual Return is now in e-form. No physical annual return like previous year in 20B is required. E-form shall be signed by Company Secretary of the company or if there is no Company Secretary then form shall be certified by Practicing Company Secretary or small companies by director

8. Companies have paid up capital of 10 cr or more or Turnover of 50 cr or more are required to get certificate in MGT-8 by any PCS.

9. Special Resolution passed in general meeting shall also be required to file in MGT-14 , irrespective of the company staus Private or Public.

10. Notice of AGM should include route map of venue of AGM(SS 1)

11. Minutes of Board Meeting and General Meeting shall be serially numbered after 1st July 2015(SS 1 and SS 2)

12. Don't forget to regularise/appoint additional director, as director.

13. Company can also pass special resolution u/s 42/62(1)c or any other SR also, if required.

14. Report of AGM to be filled in  MGT 15 within 30 days of conclusion of AGM(for listed co only).

15. If company have only associates & joint ventures(i.e. no subsidiary),no CFS is to be prepared.

16. Schedule III is to be followed for preparation of financial statement, otherwise penalty.

17. A statement in AOC1 is to be attached to FS for subsidiary, JV & associates.
AOC1 is to be attached , even if no CFS is prepared.

18. Problem of MGT 7 & SOLUTION: While filling point no IXB, sometimes, % is automatically fillied as zero, which can not be changed. Download new reform & fill again.


Wednesday, September 30, 2015

Fwd: Link of Rachnatmak Sankalp

---------- Forwarded message ----------
From: sankalp patrika <>
Date: 2015-09-30 12:14 GMT+05:30
Subject: Link of Rachnatmak Sankalp

"इंस्टीट्यूट ऑफ चार्टर्ड एकाउंटेंट्स की वेस्टर्न रीजन में सेंट्रल काउंसिल के लिए मनीष बक्षी की उम्मीदवारी न आने से पराग रावल का रास्ता और आसान हुआ लगता है" शीर्षक रिपोर्ट पढ़ने के लिए Please click the Link :

Tuesday, September 29, 2015

Imp CBDT Release Reg Extension Of Due Date For Filing ROI + Imp Verdicts Of Supreme Court And High Court


Dear Subscriber,

CBDT Press Release Reg Circulation of Fake order for extension of due date for filing of Audit report and return of Income for Assessment Year 2015-16

It is clarified the order is fraudulent. The Government has not extended the due date for filing of returns and audit report due by 30th September 2015. Tax payer and practitioners are advised not to give any credence to the fraudulent order purportedly signed by one Upmanyu Reddy

Shabina Abraham & Ors vs. Collector of Central Excise (Supreme Court)

Entire law on the taxation of deceased persons and their estate explained in the context of the Income-tax Act and the Central Excise Act

The individual assessee has ordinarily to be a living person and there can be no assessment on a dead person and the assessment is a charge in respect of the income of the previous year and not a charge in respect of the income of the year of assessment as measured by the income of the previous year. Wallace Brothers & Co. Ltd. v Commissioner of Income-tax. By section 24B of the Income-tax Act the legal representatives have, by fiction of law, become assessees as provided in that section but that fiction cannot be extended beyond the object for which it was enacted

Sri S. N. Wadiyar (Dead) Through LR vs. CWT (Supreme Court)

Important principles relating to valuation of property subject to the Land Ceiling Act explained in the context of the Wealth-tax Act

One has to assume that the property in question is saleable in the open market and estimate the price which the assumed willing purchaser would pay for such a property. When the asset is under the clutches of the Ceiling Act and in respect of the said asset/vacant land, the Competent Authority under the Ceiling Act had already determined the maximum compensation of Rs.2 lakhs, how much price such a property would fetch if sold in the open market? We have to keep in mind what a reasonably assumed buyer would pay for such a property if he were to buy the same. Such a property which is going to be taken over by the Government and is awaiting notification under Section 10 of the Act for this purpose, would not fetch more than Rs.2 lakhs as the assumed buyer knows that the moment this property is taken over by the Government, he will receive the compensation of Rs.2 lakhs only. We are not oblivious of those categories of buyers who may buy "disputed properties" by taking risks with the hope that legal proceedings may ultimately be decided in favour of the assessee and in such a eventuality they are going to get much higher value. However, as stated above, hypothetical presumptions of such sales are to be discarded as we have to keep in mind the conduct of a reasonable person and "ordinary way" of the presumptuous sale. When such a presumed buyer is not going to offer more than Rs.2 lakhs, obvious answer is that the estimated price which such asset would fetch if sold in the open market on the valuation date(s) would not be more than Rs.2 lakhs

CIT vs. Vijay Singh Kadan (Delhi High Court)

S. 2(14)(iii)(b): To determine whether the "agricultural land" is situated within 8 km of the municipal limits so as to constitute a "capital asset", the distance has to be measured in terms of the approach road and not by the straight line distance on horizontal plane or as per crow's flight

The Court is of the view that for the purposes of Section 2 (14) (iii) (b) of the Income-tax Act, the distance had to be measured from the agricultural land in question to the outer limit of the municipality by road and not by the straight line or the aerial route. The distance has to be measured from the land in question itself and not from the village in which the land is situated






P. Satyanarayana Murthy vs. Dist. Inspector of Police (Supreme Court)

Acche Din For Corrupt Babus: Mere possession and recovery of currency notes from an accused is not sufficient to establish an offense under the Prevention of Corruption Act. Proof of demand illegal gratification is essential. Its absence is fatal to the complaint


Fwd: Link of Rachnatmak Sankalp

---------- Forwarded message ----------
From: sankalp patrika <>
Date: 2015-09-28 12:22 GMT+05:30
Subject: Link of Rachnatmak Sankalp

"इंस्टीट्यूट ऑफ चार्टर्ड एकाउंटेंट्स के सेंट्रल काउंसिल के चुनाव में अनिल भंडारी कहीं दूसरे मितिल चोकसी तो साबित नहीं होंगे" शीर्षक रिपोर्ट पढ़ने के लिए Please click the Link :

Tuesday, September 22, 2015

Status of Tax Audit Date Extension Update with Different High Courts

Status of Tax Audit Date Extension Update with Different High Courts***



Notice issued to CBDT, Next Date of Hearing Fixed for 24th September 2015.



HC directed the department counsel to Seek instructions from the CBDT for extension of date.

Matter now fixed for 24th Sept. 2015.



Writ Filed. Listed on 22nd Spetember 2015.



Writ Filed.



Writ will be filed today.



High Court dismissed the Writ & asked to file PIL


With Best Regards,

CA Vikrant Kulkarni
(M) 9881880073/ 9561096073