The Finance Bill, 2010 was earlier passed by the Lok Sabha followed by its
passage by the Rajya Sabha. The Finance Bill, 2010 has been assented to by
the Hon'ble President on 8-5-2010 as Act No. 14 of 2010. With this, the
Budgetary exercise is over for the F.Y. 2010-2011
Highlight of Amendment to Finance Bill 2010
Æ Service tax relief to construction sector: Abatement hiked from 67% to
75% + exemption granted to travel by air from North-Eastern sector +
exemption to modular skill development bodies under 'vocational institute'
service
Æ FM reduces excise duty on hand-rolled cheroot (bidis) + excise duty
exemption given to paper and paper board materials + excise duty on waste
paper reduced to 4% + MRP scheme extended to excavators, rollers and tunnel
boring machines + BCD reduced to 5% for 11 basic drugs and exempt them from
excise duty
Æ Conversion into LLP: Transfer of shares exempted from capital gains tax
Æ FM says he has written letters to 65 countries for amendment in DTAAs for
exchange of tax information; Switzerland, Bahamas and Bermuda agreed to do
needful
Æ FM hikes export duty on raw cotton from Rs 2500 to Rs 10,000 per tonne
Æ FM extends Sec 35AD benefits to hospitals of at least 100 beds anywhere
in India and housing scheme for slum re-development
Æ Budget passage is preponed; FM moves amendments; Lok Sabha all set to
vote this evening
Insurance Premium paid by partnership firm on Keyman Insurance Policy is
allowed as expenditure of the firm: Bombay HC
MUMBAI, APR 23, 2010: CIT(A) allowing the Insurance Premium paid on Keyman
Insurance Policy as expenditure. The ITAT had held that the expenditure
incurred by the assessee, who is a partnership firm, in paying the premium
for a Keyman Insurance Policy obtained by the firm on the life of its
partner must be regarded as expenditure incurred wholly and exclusively for
the business of the firm.
Keyman Insurance Policy". The Explanation to Clause 10D defines what is
meant by a Keyman Insurance Policy thus :
Keyman Insurance Policy" means a life insurance policy taken by a person on
the life of another person who is or was the employee of the first mentioned
person or is or was connected in any manner whatsoever with the business of
the first mentioned person."
Keyman Insurance Policy forms a part of the total income and is liable to be
offered to tax. For the purposes of Clause 10D , a Keyman Insurance Policy
is a life insurance policy taken by a person on the life of another person
who is or was the employee of the person who subscribes to the policy of
insurance or is or was connected in any manner whatsoever with the business
of the subscriber to the policy. In other words, a Keyman Insurance Policy
for Clause 10D is not confined to a policy taken by a person on the life of
an employee, but also extends to an insurance policy taken with respect to
the life of another who is connected in any manner whatsoever with the
business of the subscriber.
Keyman Insurance Policy is allowable as business expenditure.
Keyman Insurance Policy is to protect the business against a financial
setback which may occur, as a result of a premature death, to the business
or professional organization. There is no rational basis to confine the
allowability of the expenditure incurred on the premium paid towards such a
policy only to a situation where the policy is in respect of the life of an
employee. A Keyman Insurance Policy is obtained on the life of a partner to
safeguard the firm against a disruption of the business that may result due
to the premature death of a partner. Therefore, the expenditure which is
laid out for the payment of premium on such a policy is incurred wholly and
exclusively for the purposes of business.
High Powered Committee Set up by The ICAI
Apr 30, 2010 ICAI
The Government has informed the Parliament that the Institute of Chartered
Accountants of India (ICAI) in terms of Section 17(2) of the Chartered
Accountants Act, 1949 constituted a fact finding Committee called High
Powered Committee to look into the entire gamut of financial reporting,
accounting, auditing aspects with regard to Satyam fiasco and suggest
changes wherever required for the purpose of making appropriate
recommendations to Government, SEBI and other regulators. Giving this
information in reply to a question in the Lok Sabha, the Minsiter for
Corporate Affairs, Shri Salman Khurshid told the House that the fact finding
process is on.
Shri Khurshid also informed that ICAI has sought following details from
around 150 firms of Chartered Accountants registered with it on the
following:
i. Agreement/contract with the multinational entity.
ii. Terms and conditions for usage of name of multinational entity.
iii. Arrangement for sharing of fees/profit with other Indian CA firms with
similar/identical name and with the multinational entity.
iv. Arrangement for sharing of human resources and infrastructure with other
Indian CA firms with similar/identical name and with the multinational
entity.
v. Details of remittances made to and received from the multinational
entity.
vi. Copy of Partnership deed of the CA firms registered with ICAI with
similar/identical name, as in vogue in the last five years.
vii. Income-tax assessment orders for the last 3 years in respect of the CA
firms registered with ICAI with similar/identical name. If assessment orders
have not been received, then to submit computation of income and copies of
returns.
viii. Copies of letterheads and visiting cards generally used.
At present, the aforementioned details are not available on the database of
the ICAI, since these have not been called for in the past. These details
have now been called for as the Committee has felt that the same would
enable it to reach an appropriate conclusion.
CA.RAJU SHAH
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