Pages

Monday, November 28, 2011

AS 10 REVISION ICAI


---------- Forwarded message ----------
From: Ramachandran Mahadevan <ramachandran.mahadevan@gmail.com>


The following is the Exposure Draft of the limited revisions to
Accounting Standard (AS) 10, Accounting for Fixed Assets, which are
proposed primarily to (i) improve accounting for fixed assets during their
construction period; (ii) incorporate changes consequential to the
requirements contained in Accounting Standard 29, Provisions,
Contingent Liabilities and Contingent Assets, in respect of the provision
made for costs of dismantling and removing the items and restoring the
site on which an asset is located, the obligation for which an entity incurs
when the item is acquired or as a consequence of having used the item
during a particular period for purposes other than to produce inventories
during that period; (iii) improve accounting for spares with a view to
bring it in line with the improvements being made in IAS 16, Property,
Plant and Equipment at the suggestion made in this regard by the
Institute of Chartered Accountants of India to the International
Accounting Standards Board; and (iv) bring about consistency between
this standard and other Accounting Standards. As a consequence to the
change in the accounting for spares, the Guidance Note on Accounting
for Machinery Spares (RE: AS 2 and AS 10), would stand withdrawn
from the date the changes made in this regard come into effect.
The changes made in the standard are indicated in track-changes
mode.
The Board invites comments on any aspect of this Exposure Draft.
Comments are most helpful if they indicate the specific paragraph or
group of paragraphs to which they relate, contain a clear rationale and,
where applicable, provide a suggestion for alternative wording.
Comments should be submitted in writing to the Secretary,
Accounting Standards Board, The Institute of Chartered Accountants of
India, ICAI Bhawan, Post Box No. 7100, Indraprastha Marg, New Delhi
– 110 002, so as to be received not later than December 20, 2011.
Comments can also be sent by e-mail at edcommentsasb@icai.org or
asb@icai.org.
(This Accounting Standard includes paragraphs 18-4239 set in bold
italic type and paragraphs 1-17 set in plain type, which have equal
authority. Pa ra g ra p h s in b o ld ita lic typ e in d ica te th e
ma in p rin cip
les . Th is Accounting Standard should be read in the context of the
Preface to the Statements of Accounting Standards1 .)
In the initial years, this accounting standard will be recommendatory in
character. During

--

VARIOUS RBI CIRCULARS

RBI has issued circulars on the following subjects.

Deregulation of Savings Bank Deposit Interest Rate - Guidelines

OTC Foreign Exchange Derivatives – Foreign Currency – INR swaps

External Commercial Borrowings (ECB) Policy

ECB Policy – Parking of ECB proceeds

Interest Rates on Non-Resident (External) Rupee (NRE) Deposits and FCNR(B) Deposits

Interest Rates on Non-Resident (External) Rupee (NRE) Deposits and FCNR(B) Deposits

RBI/2011-12/275

DBOD.Dir.BC. 59/13.03.00/2011-12


November 23, 2011

All Scheduled Commercial Banks
(excluding RRBs)

Dear Sir/Madam

Interest Rates on Non-Resident (External) Rupee (NRE) Deposits and FCNR(B) Deposits

1. Interest Rates on Non-Resident (External) Rupee (NRE) Deposits

Please refer to paragraph 1 of our circular DBOD.No.Dir.BC.82/13.03.00/2008-09 dated November 15, 2008 on Interest Rates on Deposits held in Non-Resident (External) Rupee (NRE) Accounts. In view of the prevailing market conditions, it has been decided that until further notice and with effect from close of business in India as on November 23, 2011, the interest rates on Non- Resident (External) Rupee (NRE) Term Deposits will be as under:

Interest rates on fresh Non-Resident (External) Rupee (NRE) Term Deposits for one to three years maturity should not exceed the LIBOR/SWAP rates plus 275 basis points, as on the last working day of the previous month, for US dollar of corresponding maturities (as against LIBOR/SWAP rates plus 175 basis points effective from close of business on November 15, 2008). The interest rates as determined above for three year deposits will also be applicable in case the maturity period exceeds three years. The changes in interest rates will also apply to NRE deposits renewed after their present maturity period.

2. Interest Rates on FCNR(B) deposits

Please refer to paragraph 2 of our circular No.DBOD.Dir.BC.82/13.03.00/2008-09 dated November 15, 2008 on Interest Rates on Deposits held in FCNR(B) Accounts. It has also been decided that until further notice and with effect from the close of business in India as on November 23, 2011, the interest rates on FCNR(B) Deposits will be as under:

In respect of FCNR (B) deposits of all maturities contracted effective from the close of business in India as on November 23, 2011, interest shall be paid within the ceiling rate of LIBOR/SWAP rates plus 125 basis points for the respective currency/corresponding maturities (as against LIBOR/SWAP rates plus 100 basis points effective from close of business on November 15, 2008). On floating rate deposits, interest shall be paid within the ceiling of SWAP rates for the respective currency/maturity plus 125 basis points. For floating rate deposits, the interest reset period shall be six months.

3. All other instructions in this regard, as amended from time to time, will remain unchanged.


Yours faithfully,

(P.R.Ravi Mohan)
Chief General Manager

--------------------------------------------------------------------------------

DBOD.Dir.BC. 58 /13.03.00/2011-12

November 23, 2011

Interest Rates on Non-Resident (External) Rupee (NRE) Deposits and FCNR(B) Deposits

In exercise of the powers conferred by Section 35A of the Banking Regulation Act, 1949, and in modification of the directive DBOD.No.Dir.BC.81/13.03.00/2008-09 dated November 15, 2008 on Interest Rates on Deposits held in Non-Resident (External) (NRE) Accounts and FCNR(B) Accounts, the Reserve Bank of India being satisfied that it is necessary and expedient in the public interest so to do, hereby directs that Interest Rates on Non-Resident (External) Rupee (NRE) Deposits and FCNR(B) deposits shall be as under:

Interest Rates on Non-Resident (External) Rupee (NRE) Deposits

"With effect from close of business as on November 23, 2011, interest rates on fresh Non-Resident (External) Rupee (NRE) Term Deposits for one to three years maturity should not exceed the LIBOR/SWAP rates plus 275 basis points, as on the last working day of the previous month, for US dollar of corresponding maturities (as against LIBOR/SWAP rates plus 175 basis points effective from the close of business on November 15, 2008). The interest rates as determined above for three year deposits will also be applicable in case the maturity period exceeds three years. The changes in interest rates will also apply to NRE deposits renewed after their present maturity period."

Interest Rates on FCNR(B) deposits

"In respect of FCNR(B) deposits of all maturities contracted effective from the close of business in India as on November 23, 2011, interest shall be paid within the ceiling rate of LIBOR/SWAP rates plus 125 basis points for the respective currency/corresponding maturities (as against LIBOR/SWAP rates plus 100 basis points effective from the close of business on November 15, 2008). On floating rate deposits, interest shall be paid within the ceiling of SWAP rates for the respective currency/maturity plus 125 basis points. For floating rate deposits, the interest reset period shall be six months."

(B. Mahapatra)
Executive Director

Related Press Release

Nov 23, 2011




ECB Policy – Parking of ECB proceeds

RBI/2011-12/274
A.P. (DIR Series) Circular No. 52

November 23, 2011



To
All Authorised Dealer Category I Banks

Dear Madam / Sir,

External Commercial Borrowings (ECB) Policy – Parking of ECB proceeds

1.Attention of Authorized Dealer Category-I (AD Category-I) banks is invited to A.P. (DIR Series) Circular No. 26 dated October 22, 2008 relating to the External Commercial Borrowings (ECB).

2. At present, borrowers are permitted to either keep ECB proceeds abroad or remit these funds to India, pending utilization for permissible end-uses. ECB proceeds parked overseas can be invested in liquid assets, such as, deposits or Certificates of Deposit or other products offered by banks ( rated not less than AA (-) by Standard and Poor/Fitch IBCA or Aa3 by Moody's), Treasury bills and other monetary instruments of one year maturity having minimum rating as indicated above and deposits with overseas branches / subsidiaries of Indian banks abroad. The underlying principle is that funds should be invested in such a way that the investments can be liquidated as and when funds are required by the borrower. ECB funds may also be repatriated to India for credit to the borrowers Rupee accounts with AD Category I banks in India pending utilization for the permissible end-uses.

3. Based on a review of the current macro economic conditions, it has been decided that henceforth the proceeds of the ECB raised abroad meant for Rupee expenditure in India, such as, local sourcing of capital goods, on-lending to Self-Help Groups or for micro credit, payment for spectrum allocation, etc. should be brought immediately for credit to their Rupee accounts with AD Category I banks in India. In other words, ECB proceeds meant only for foreign currency expenditure can be retained abroad pending utilization. The rupee funds, however, will not be permitted to be used for investment in capital markets, real estate or for inter-corporate lending, as hitherto.

4. The amended ECB policy will come into force with immediate effect and is subject to review. All other aspects of ECB policy would remain unchanged.

5. AD Category - I banks may bring the contents of this circular to the notice of their constituents and customers.

6. The directions contained in this circular have been issued under sections 10(4) and 11(1) of the Foreign Exchange Management Act, 1999 (42 of 1999) and are without prejudice to permissions / approvals, if any, required under any other law.

Yours faithfully,

(Rashmi Fauzdar)
Chief General Manager


Related Press Release

Nov 23, 2011




ECB Policy

RBI/2011 -12/273
A. P. (DIR Series) Circular No. 51

November 23 , 2011

To,
All Category - I Authorised Dealer Banks

Dear Madam / Sir,

External Commercial Borrowings (ECB) Policy

1.Attention of Authorised Dealer Category-I (AD Category-I) banks is invited to A. P. (DIR Series) Circular No. 19 dated December 9, 2009 relating to the all-in-cost ceiling of External Commercial Borrowings ( ECB ).

2. On a review of developments in the global financial markets and the fact that borrowers are experiencing difficulties in raising ECBs within the existing all-in-cost ceiling, it has been decided to revise the all-in-cost ceiling for ECB as under:

Average Maturity Period

All-in-cost over 6 month LIBOR*
Existing
Revised
Threeyears and up to five years
300 bps
350 bps
Morethan five years
500 bps
500 bps ( no change)
* for the respective currency of borrowing or applicable benchmark


3. The enhancement in all-in-cost ceiling is applicable up to March 31, 2012 and subject to review thereafter. The change in the all-in-cost ceiling will come into force immediately. All other aspects of ECB policy remain unchanged.

4. AD Category-I banks may bring the contents of this circular to the notice of their constituents and customers concerned.

5. The directions contained in this circular have been issued under sections 10 (4) and 11 (1) of the Foreign Exchange Management Act, 1999 (42 of 1999) and are without prejudice to permissions / approvals, if any, required under any other law.


Yours faithfully,

(Rashmi Fauzdar)
Chief General Manager



Related Press Release

Nov 23, 2011

OTC Foreign Exchange Derivatives – Foreign Currency – INR swaps

RBI/2011-12/272

A. P. (DIR Series) Circular No. 50

November 23, 2011

To,
All Category - I Authorised Dealer Banks

Madam / Sir,

Comprehensive Guidelines on Over the Counter (OTC) Foreign Exchange Derivatives – Foreign Currency – INR swaps

1.Attention of the Authorised Dealer Category - I (AD Category - I) banks is invited to A.P. (DIR Series) Circular No. 32 dated December 28, 2010, which sets out the guidelines governing the foreign exchange derivative contracts. In terms of the sub-para (iv) (c) on Foreign Currency-INR swaps in para 1 of the Part B.I. of the Section B in the Annex to the A.P. (DIR Series) Circular No. 32 dated December 28, 2010 the extant instructions state that "Swap transactions may be undertaken by AD Category I banks as intermediaries by matching the requirements of corporate counterparties. While no limits are placed on the AD Category I banks for undertaking swaps to facilitate customers to hedge their foreign exchange exposures, a limit of USD 100 million is placed for net supply of foreign exchange in the market…."

2. On a review, it has been decided to remove the above limit of USD 100 million placed for these swap transactions.

3. AD Category - I banks may bring the contents of this circular to the notice of their constituents and customers concerned.

4. The directions contained in this circular have been issued under Sections 10(4) and 11(1) of the Foreign Exchange Management Act, 1999 (42 of 1999) and are without prejudice to permissions /approvals, if any, required under any other law.

Yours faithfully,

(Meena Hemchandra)
Chief General Manager-in-Charge

Deregulation of Savings Bank Deposit Interest Rate - Guidelines

RBI/2011-12/272

RPCD.CO.RRB.BC.No.33/ 03.05.33/2011-12
November 23, 2011

All Regional Rural Banks

Dear Sir,

Deregulation of Savings Bank Deposit Interest Rate - Guidelines


2. As indicated in the Second Quarter Review of Monetary Policy announced on October 25, 2011, it has been decided to deregulate the savings bank deposit interest rate with immediate effect. Accordingly, the following Guidelines will be effective from October 25, 2011:
  • Banks are free to determine their savings bank deposit interest rate, subject to the following two conditions:
  • First, each bank will have to offer a uniform interest rate on savings bank deposits up to Rs.1 lakh, irrespective of the amount in the account within this limit.
  • Second, for savings bank deposits over Rs.1 lakh, a bank may provide differential rates of interest, if it so chooses, subject to the condition that banks will not discriminate in the matter of interest paid on such deposits, between one deposit and another of similar amount, accepted on the same date, at any of its offices.
3. The above revised Guidelines would be applicable to savings bank deposits of resident Indians only.

4. Interest rate on Non-Resident (External) Accounts Scheme and Ordinary Non-Resident Deposit under savings account, which has been prescribed at 4 per cent per annum at present, will continue to be regulated until further review.

5. An amending directive RPCD.CO.RRB.BC.Dir.No.27/03.05.33/2011-12 dated October 25, 2011 is enclosed.

6. Please acknowledge receipt of this circular to the Regional Office concerned.

Yours faithfully,

(C.D.Srinivasan)
Chief General Manager

Encl: As above
--------------------------------------------------------------------------------
RPCD.CO.RRB.BC.Dir.No.27/03.05.33/2011-12

October 25, 2011

Deregulation of Savings Bank Deposit Interest Rate

In exercise of the powers conferred by Section 35 A of the Banking Regulation Act, 1949 and in partial modification of its directive RPCD.CO.RRB.BC.No.67/03.05.33/2010-11 dated May 3, 2011, the Reserve Bank of India, being satisfied that it is necessary and expedient in the public interest so to do, hereby directs that banks are free to determine their savings bank deposit interest rate for resident Indians only with immediate effect subject to two conditions. First, each bank will have to offer a uniform interest rate on savings bank deposits up to Rs.1 lakh, irrespective of the amount in the account within this limit. Second, for savings bank deposits over Rs.1 lakh, a bank may provide differential rates of interest, if it so chooses, subject to the condition that banks will not discriminate in the matter of interest paid on such deposits, between one deposit and another of similar amount, accepted on the same date, at any of its offices.

(V.K.Sharma)
Executive Director

Friday, November 18, 2011

"Set-off" of export receivables against import payables - Liberalization of Procedure

RBI/2011-12/264
A.P. (DIR Series) Circular No. 47
November 17, 2011

To
All Category – I Authorized Dealer Banks

Madam/Sir,

"Set-off" of export receivables against import payables-Liberalization of Procedure

Attention of Authorized Dealer Category – I (AD Category – I) banks is invited to the fact that the requests received from the exporters through their AD branches for set-off of export receivables against import payables are considered by the Reserve Bank of India. As a measure of further liberalization, it has been decided to delegate power to AD Category – I banks to deal with the cases of "set-off" of export receivables against import payables, subject to following terms and conditions:

a.The import is as per the Foreign Trade Policy in force.

b.Invoices/Bills of Lading/Airway Bills and Exchange Control copies of Bills of Entry for home consumption have been submitted by the importer to the Authorized Dealer bank.

c.Payment for the import is still outstanding in the books of the importer.

d.Both the transactions of sale and purchase may be reported separately in 'R' Returns.

e.The relative GR forms will be released by the AD bank only after the entire export proceeds are adjusted / received.

f.The " set-off" of export receivables against import payments should be in respect of the same overseas buyer and supplier and that consent for "set-off" has been obtained from him.

g.The export / import transactions with ACU countries should be kept outside the arrangement.

h.All the relevant documents are submitted to the concerned AD bank who should comply with all the regulatory requirements relating to the transactions.

2. AD Category – I banks may bring the contents of this circular to the notice of their constituents and customers concerned.

3. The directions contained in this circular have been issued under Sections 10(4) and 11(1) of the Foreign Exchange Management Act, 1999 (42 of 1999) and are without prejudice to permissions / approvals, if any, required under any other law.

Yours faithfully,

(Dr. Sujatha Elizabeth Prasad)
Chief General Manager

Wednesday, November 16, 2011

COUNCIL GUIDELINES FOR CONVERSION OF CA FIRMS INTO LLPS

COUNCIL GUIDELINES FOR
CONVERSION OF CA FIRMS INTO LLPS
(Guidelines No.1-CA (7)/03/2011, dated 4th November, 2011)

In terms of the Council decision dated 14 July, 2011, following guidelines for conversion of CA firms into LLPs and constitution of separate LLPs by the practicing Chartered Accountants have been finalized which are applicable for conversion of CA firms into LLPs or formation of new LLPs by the members in practice of the Institute subject to the provisions of the Limited Liability Partnership (LLP) Act, 2008 and Rules & Regulations framed there under:-

(A) Conversion of CA firms into LLPs

1. All existing CA firms who want to convert themselves into LLPs are required to follow the provisions of Chapter-X of the Limited Liability Partnership Act, 2008 read with Second Schedule to the said Act containing provisions of conversion from existing firms into LLP.

2. In terms of Rule 18(2) (xvi) of LLP Rules- 2009, if the proposed name of LLP includes the words `Chartered Accountant' or chartered Accountants, as the case may be, as part of the proposed name, the same shall be referred to the Institute of Chartered Accountants of India (ICAI) by the Registrar of LLP and it shall be allowed by the Registrar only if the Secretary, ICAI approves it.

3. If the proposed name of LLP of CA firm resemble with any other non-CA entity as per the naming Guidelines under LLP Act and its Rules, the proposed name of LLP of CA firms may include the word `Chartered Accountant' or `Chartered Accountants', as the case may be in the name of the LLP itself and the Registrar, LLP may allow the same name, subject to compliance to Rule 18(2) (xvi) of LLP Rules as referred above.

4. For the purpose of registration of LLP with ICAI under regulation 190 of the Chartered Accountants Regulations, 1988, the partners of the firm shall apply in ICAI Form No. '117' and the ICAI Form No. '18' along with copy of name registration received from the Registrar of LLP and submit the same with the concerned Regional office of the ICAI. These Forms shall contain all details of the officers and other particulars as called for together with the signatures of all partners or authorized partner of the proposed LLP.

5. The names of the CA firms registered with the ICAI shall remain reserved for the partners as one of the options for LLP names subject to the provisions of LLP Act, Rules and Regulations framed there under.

6. The following guidelines relating to seniority and other criteria shall be followed for registration of LLP with ICAI.

(i) Where two similar or identical or nearly similar firm names (whether the partners of such firms are same or not) have been registered by ICAI, under the purposed LLP, only one such firm name shall be approved and remaining firm registered with ICAI, either desires to convert into LLP or not, a change in the firm name shall be required.

(ii) The name of the LLP may be like `X & Co. LLP' or `X & Associates LLP' and no other suffix shall be approved and registered by ICAI.

(iii) The newly converted CA LLPs registered with ICAI shall be allowed to work only in terms of Section 2(2) of the Chartered Accountants Act, 1949 and the object of LLP to be incorporated in Form-2 and Form 17 of the LLP rules, 2009 or in LLP agreement, shall be in the nature of Professional Services allowed under Section 2(2) of the Chartered Accountants Act, 1949. LLP shall be subject to the same regulations, as if they were in partnership firm. Mere conversion into LLP does not give any privileges, which were not earlier with the CA firms.

(iv) Inter-se seniority among the firms shall be given to LLP as per existing policy of ICAI. In other words, LLPs shall carry the same seniority, as the firm shall otherwise have under the existing policy of ICAI. In case of merger of 2 LLPs, same rules as applicable to firms merging shall apply.

(v)The non converted firms shall also remain on the same position of seniority in relation to converted LLPs as the converted LLPs shall have the same inter-se seniority as the firms had earlier to conversion.

7. These guidelines of conversion of CA firms into LLP shall also be applicable to the conversion of proprietary firm into LLP subject to the provisions of LLP Act, Rules and Regulations framed there under. The conversion of proprietary firm shall be by way of incorporation of new LLPs.

8. The registration number (with minimum 6 numbers) of LLP with ICAI, shall remain the same Firm Registration Number (FRN) allotted to the firm before the conversion by ICAI with the Regional Code like `W' for Western, `E' for Eastern, `S' for Southern, `N' for Northern and `C' for Central Region as under:-

Region Code

FRN W 1 2 3 4 5 6

FRN S 2 0 0 0 0 0

FRN E 3 0 0 0 0 0

FRN C 4 0 0 0 0 0

FRN N 5 0 0 0 0 0

9. Introduction of LLP, shall not affect the existing regulations in force as regards the name allotment to chartered accountants firms.

10. In case there is a merger of a firm and conversion with LLP and vice-versa, seniority may be provided to the surviving entity as per policy as per Annexure 'A' attached herewith.

11. The provisions of CA Act, 1949, Chartered Accountants Regulations, 1988 and Code of Ethics issued by ICAI shall be applicable to all partners of the converted CA firms into LLP jointly and severally.

12.The following Guidelines are subject to the clarification from Ministry of Corporate Affiars (MCA), Govt. of India, New Delhi:

(i) Wherever the existing partnership firm have been appointed as statutory auditor of any company after following the due procedure under the Companies Act, 1956 and the said firm with the same partners is converted/formed into LLP, then the same FRN will continue and the Board of Directors of the Company may take on record the conversion/formation of the CA firms into LLP and the new LLP shall be deemed to be an Auditor of the said company for the said financial year in terms of Section 58(4) of the LLP Act, 2008.

(ii) Wherever more than one partnership firms with all the partners desire to convert/form only one LLP, in that case the name and FRN may be selected of only one of such firms for the purpose of registration with ICAI and;
(i) The other such firms shall stand dissolved.
(ii) Seniority shall be decided as per applicable rules of ICAI.
(iii) The Board of Directors of all the Companies who have appointed all the erstwhile firms as auditors, may take a declaration from the said LLP with all the partners of all the erstwhile firms on record and the appointment of auditors of all the erstwhile firms made under the Companies Act, 1956, shall be deemed to be in the name of the said LLP.

(B) Constitution of separate LLPs

13 All members of ICAI in practice who want to constitute separate LLPs are required to follow the provisions of the Limited Liability Partnership Act, 2008 read with the Rules framed there under.

14 In terms of Rule 18(2) (xvi) of LLP Rules- 2009, if the proposed name of LLP includes the words `Chartered Accountant' or chartered Accountants, as the case may be, as part of the proposed name, the same shall be referred to the ICAI by Registrar of LLP and it shall be allowed by the Registrar only if the Secretary, ICAI approves it.

15 For the purpose of registration of LLP with ICAI under regulation 190 of the Chartered Accountants Regulations, 1988, the partners of the firm shall apply in ICAI Form No. '117' and the ICAI Form No. '18' along with copy of name registration received from the Registrar of LLP and submit the same with the concerned Regional office of the ICAI. These Forms shall contain all details of the officers and other particulars as called for together with the signatures of all partners or authorized partner of the proposed LLP.

16. The following guidelines relating to seniority and other criteria shall be followed for registration of LLP with ICAI.

(i) Inter-se seniority among the firms shall be given to LLP as per existing policy of ICAI. In other words, LLPs shall carry the same seniority, as the firms shall otherwise have under the existing policy of ICAI. In case of merger of two LLPs, same rules, as applicable to firms merging, shall apply.

(ii) The name of the LLP may be like `X & Co. LLP' or `X & Associates LLP' and no other suffix shall be approved and registered by ICAI.

(iii) The newly constituted CA LLPs registered with ICAI shall be allowed to work only in terms of Section 2(2) of the Chartered Accountants Act, 1949 and the object of LLP to be incorporated in Form-2 and Form 17 of the LLP rules, 2009 or in LLP agreement, shall be in the nature of Professional Services allowed under Section 2(2) of the Chartered Accountants Act, 1949. LLP shall be subject to the same regulation, like the partnership firms. Mere conversion into LLP does not give any privileges, which were not earlier with the CA firms.

17. These guidelines of conversion of CA firms into LLP shall also be applicable to the conversion of proprietary firm into LLP subject to the provisions of LLP Act, Rules and Regulations framed there under. The conversion of proprietary firm shall be by way of incorporation of new LLPs.

18. The registration number (with minimum 6 numbers) of LLP with ICAI, shall be like the Firm Registration Number being allotted to the firms by ICAI with the Regional Code like `W' for Western, `E' for Eastern, `S' for Southern, `N' for Northern and `C' for Central Region .

19. Introduction of LLP, shall not affect the existing regulations in force as regards Name allotment to chartered accountants firms.

20. The provisions of CA Act, 1949, Chartered Accountants Regulations, 1988 and Code of Ethics issued by ICAI shall be applicable to all partners of the LLP jointly and severally.

21. In case of any dispute in respect of these guidelines, the same shall be referred to the committee of the Institute and the decision of that committee shall be final and binding on the members of the Institute.

22. For the purpose of any clarification regarding the approval and registration of proposed LLP with the ICAI, the requests can be sent at the following address:-

The Secretary
The Institute of Chartered Accountants of India
P.B No: 7100, "ICAI Bhavan", Indraprastha Marg
New Delhi – 110002

23. These Guidelines shall come into force w.e.f. 4th November, 2011.

ITR VOL 339 PART 1 AND ITR (TRIB) VOL 12 PART 5

INCOME TAX REPORTS (ITR)

Volume 339 : Part 1 (Issue dated 28-11-2011)

SUBJECT INDEX TO CASES REPORTED IN THIS PART

SUPREME COURT

Fundamental rights --Double taxation avoidance--Prohibition on disclosure of
documents--Scope of--Information relating to unaccounted monies held in
secret bank accounts outside India--How far to be divulged--Balance between
fundamental right of citizen to seek information and fundamental right of
privacy of account holder--Names of those where no presumption of wrongdoing
not to be divulged--Constitution of India, arts. 19, 21, 32--Double Taxation
Avoidance Agreement between India and Germany, art. 26-- Ram Jethmalani v.
Union of India . . . 107

HIGH COURTS

Appeal to High Court --Grounds not raised before Assessing Officer or
Tribunal cannot be raised for first time before High Court--Income-tax Act,
1961, s. 260A-- Alok Todi v. CIT (Cal) . . . 102

Bad debt --Leasing and money-lending business--Assessee standing guarantee
for loan--Default by creditor--Amount written off--Deductible--Deposit for
allotment of shares--Deposit earning interest--Shares not issued and deposit
not returned--Amount deductible as bad debt--Income-tax Act, 1961, s. 36--
CIT v. Tulip Star Hotels Ltd .

(Delhi) . . . 91

Business expenditure --Amortisation of preliminary expenses--Expenditure on
issue of shares--Matter remanded to find whether assessee was an industrial
undertaking--Income-tax Act, 1961, s. 35D-- CIT v. Tulip Star Hotels Ltd.
(Delhi) . . . 91

Business income --Remission or cessation of trading liability--Waiver of
loan taken for purchase of capital asset--Not in revenue field--Loan written
off in cash credit account--Taxable income--Income-tax Act, 1961, s. 41(1)--
Rollatainers Ltd . v. CIT

(Delhi) . . . 54

Depreciation --Goodwill--Valuation of--Assessee purchasing a loss-making
company--Assessing Officer holding 10 per cent. of purchase price represents
goodwill on trade name--Finding of Assessing Officer without any
basis--Assessing Officer not justified in deducting 10 per cent. towards
estimated value on goodwill--Income-tax Act, 1961-- CIT v. India Cements Ltd
. (Mad) . . . 31

Industrial undertaking --Special deduction--Interest received from trade
debtors--Entitled to deduction--Interest earned on fixed deposit
receipts--Not entitled to deduction--Assessee not entitled to set off
interest received against interest paid--Duty drawback and amount received
on sale of DEPB and QBAL licences--Not entitled to deduction--Income-tax
Act, 1961-- CIT v. Advance Detergents Ltd .

(Delhi) . . . 81

----Special deduction--Interest--Interest received on overdue payments for
goods supplied--Is income derived from business of industrial
undertaking--Entitled to deduction--Income-tax Act, 1961, s. 80-IA-- CIT v.
Advance Detergents Ltd .

(Delhi) . . . 81

Interest-tax --Charge of tax--Loan or advance--Tests--Intercorporate
deposits--Not in nature of loan or advances--Not chargeable to
tax--Interest-tax Act, 1974, ss. 2(7), 5-- CIT v. Visisth Chay Vypapar Ltd .
(Delhi) . . . 157

Interpretation of taxing statutes --Loan--Strict interpretation-- CIT v.
Visisth Chay Vypapar Ltd. (Delhi) . . . 157

New industrial undertaking --Special deduction under section 80HH--Unit
located at backward area, independent unit and profit making--Receipts on
job work done at unit qualify for deduction--Assessee entitled to special
deduction--Income-tax Act, 1961, s. 80HH-- Sundaram Fasteners Ltd . v. CIT
(Mad) . . . 40

Non-resident --Concessional rate of tax--Foreign exchange
asset--Definition--Interest earned on deposits of sums brought from
abroad--Not a foreign exchange asset--Interest on redeposited interest--Not
entitled to benefit under section 115H--Income-tax Act, 1961, ss. 115C,
115H-- Dr. M. Manohar v. Asst. CIT

(Mad) . . . 49

----Income deemed to accrue or arise in India--No part of research and
development activities carried out in India--Global profits attributed to
activities in India--No further setting off for research and development
activities--Income-tax Act, 1961-- Rolls Royce PLC v. Director of
Income-tax, International Taxation (Delhi) . . . 147

----Permanent establishment--Office in India rendering services--Office in
India a business connection--Finding that assessee's income chargeable to
tax in India under section 5(2) and business connection in India according
section 9(1)(i)--Assessee has permanent establishment in India--Double
Taxation Avoidance Agreement between India and the United
Kingdom--Income-tax Act, 1961, ss. 5(2), 9(1)(i)-- Rolls Royce PLC v.
Director of Income-tax, International Taxation

(Delhi) . . . 147

Reassessment --Transfer of case--No order of transfer--Assessment in
Kolkata--Notice for reassessment by Assessing Officer of Delhi--Not
valid--Income-tax Act, 1961, ss. 127, 148-- Smt. Smriti Kedia v. Union of
India (Cal) . . . 37

Rectification of mistakes --Condition precedent--Mistake should be apparent
on record--Failure to charge interest under sections 234B and 234C before
allowing credit for minimum alternate tax--Debatable question--Interest
could not be levied in rectification proceedings--Income-tax Act, 1961, ss.
154, 234B, 234C-- CIT v. Bilag Industries P. Ltd . (Guj) . . . 46

Revision --Commissioner--Industrial undertaking--Special deduction under
section 80-I--Small scale industrial undertaking--Notice of revision not
taking into account certificate granted by State Government--Not
valid--Income-tax Act, 1961, ss. 80-I, 263-- SJ and SP Family Trust, through
Trustee Ashokkumar Prahladbhai v. CIT

(Guj) . . . 34

Search and seizure --Block assessment--Return not submitted in response to
notice under section 158BC--Best judgment assessment valid--Income-tax Act,
1961, ss. 158BB, 158BC-- Alok Todi v. CIT (Cal) . . . 102

----Block assessment--Undisclosed income--Admission by assessee--Subsequent
death of assessee--Legal representatives could not retract
admission--Assessment based on admission--Justified--Income shown in return
filed after search--Not undisclosed income--No evidence of benami
purchase--Value of purchase not assessable--Material not found during
search--Additions based on such material--Not valid--Capital gains on sale
of shares--Not undisclosed income--Income-tax Act, 1961, ss. 158BC, 159--
CIT v. Late H. R. Basavaraj (Karn) . . . 63

Special deductions --Computation of special deductions--Effect of section
80A--Nil total income after setting off unabsorbed business losses--Special
deductions under sections 80-I, 80-IA, 80HH and 80HHD could not be
given--Income-tax Act, 1961, ss. 80A, 80B, 80HH, 80HHD, 80-I, 80-IA-- CIT v.
Arif Industries Ltd . (All) . . . 6

Unexplained investment --Difference between amount shown in sale deed and
that in agreement for sale--No evidence to show reduction in consideration
paid--Addition of difference justified--Findings of fact--Income-tax Act,
1961, s. 69-- Bela Juneja v. CIT (Delhi) . . . 144

Valuation of property --Cost of construction--Undervaluation of closing
stock of work-in-progress--Apportionment of cost not done by valid
method--Matter remanded--Income-tax Act, 1961-- CIT v. Lord Buildcons P. Ltd
.

(Delhi) . . . 1

Words and phrases --"Loan"--Meaning of-- CIT v. Visisth Chay Vypapar Ltd .

(Delhi) . . . 157

SECTIONWISE INDEX TO CASES REPORTED IN THIS PART

Constitution of India :

Arts. 19, 21, 32 --Fundamental rights--Double taxation
avoidance--Prohibition on disclosure of documents--Scope of--Information
relating to unaccounted monies held in secret bank accounts outside
India--How far to be divulged--Balance between fundamental right of citizen
to seek information and fundamental right of privacy of account
holder--Names of those where no presumption of wrongdoing not to be
divulged-- Ram Jethmalani v. Union of India (SC) . . . 107

Double Taxation Avoidance Agreement between India and Germany :

Art. 26 --Fundamental rights--Double taxation avoidance--Prohibition on
disclosure of documents--Scope of--Information relating to unaccounted
monies held in secret bank accounts outside India--How far to be
divulged--Balance between fundamental right of citizen to seek information
and fundamental right of privacy of account holder--Names of those where no
presumption of wrongdoing not to be divulged-- Ram Jethmalani v. Union of
India (SC) . . . 107

Income-tax Act, 1961 :

S. 5(2) --Non-resident--Permanent establishment--Office in India rendering
services--Office in India a business connection--Finding that assessee's
income chargeable to tax in India under section 5(2) and business connection
in India according section 9(1)(i)--Assessee has permanent establishment in
India--Double Taxation Avoidance Agreement between India and the United
Kingdom-- Rolls Royce PLC v. Director of Income-tax, International Taxation
(Delhi) . . . 147

S. 9(1)(i) --Non-resident--Permanent establishment--Office in India
rendering services--Office in India a business connection--Finding that
assessee's income chargeable to tax in India under section 5(2) and business
connection in India according section 9(1)(i)--Assessee has permanent
establishment in India--Double Taxation Avoidance Agreement between India
and the United Kingdom-- Rolls Royce PLC v. Director of Income-tax,
International Taxation (Delhi) . . . 147

S. 35D --Business expenditure--Amortisation of preliminary
expenses--Expenditure on issue of shares--Matter remanded to find whether
assessee was an industrial undertaking-- CIT v. Tulip Star Hotels Ltd.
(Delhi) . . . 91

S. 36 --Bad debt--Leasing and money-lending business--Assessee standing
guarantee for loan--Default by creditor--Amount written
off--Deductible--Deposit for allotment of shares--Deposit earning
interest--Shares not issued and deposit not returned--Amount deductible as
bad debt-- CIT v. Tulip Star Hotels Ltd .

(Delhi) . . . 91

S. 41(1) --Business income--Remission or cessation of trading
liability--Waiver of loan taken for purchase of capital asset--Not in
revenue field--Loan written off in cash credit account--Taxable income--
Rollatainers Ltd . v. CIT (Delhi) . . . 54

S. 69 --Unexplained investment--Difference between amount shown in sale deed
and that in agreement for sale--No evidence to show reduction in
consideration paid--Addition of difference justified--Findings of fact--
Bela Juneja v. CIT

(Delhi) . . . 144

S. 80A --Special deductions--Computation of special deductions--Effect of
section 80A--Nil total income after setting off unabsorbed business
losses--Special deductions under sections 80-I, 80-IA, 80HH and 80HHD could
not be given-- CIT v. Arif Industries Ltd . (All) . . . 6

S. 80B --Special deductions--Computation of special deductions--Effect of
section 80A--Nil total income after setting off unabsorbed business
losses--Special deductions under sections 80-I, 80-IA, 80HH and 80HHD could
not be given-- CIT v. Arif Industries Ltd . (All) . . . 6

S. 80HH --New industrial undertaking--Special deduction under section
80HH--Unit located at backward area, independent unit and profit
making--Receipts on job work done at unit qualify for deduction--Assessee
entitled to special deduction-- Sundaram Fasteners Ltd . v. CIT (Mad) . . .
40

----Special deductions--Computation of special deductions--Effect of section
80A--Nil total income after setting off unabsorbed business losses--Special
deductions under sections 80-I, 80-IA, 80HH and 80HHD could not be given--
CIT v. Arif Industries Ltd . (All) . . . 6

S. 80HHD --Special deductions--Computation of special deductions--Effect of
section 80A--Nil total income after setting off unabsorbed business
losses--Special deductions under sections 80-I, 80-IA, 80HH and 80HHD could
not be given-- CIT v. Arif Industries Ltd . (All) . . . 6

S. 80-I --Revision--Commissioner--Industrial undertaking--Special deduction
under section 80-I--Small scale industrial undertaking--Notice of revision
not taking into account certificate granted by State Government--Not valid--
SJ and SP Family Trust, through Trustee Ashokkumar Prahladbhai v. CIT (Guj)
. . . 34

----Special deductions--Computation of special deductions--Effect of section
80A--Nil total income after setting off unabsorbed business losses--Special
deductions under sections 80-I, 80-IA, 80HH and 80HHD could not be given--
CIT v. Arif Industries Ltd . (All) . . . 6

S. 80-IA --Industrial undertaking--Special deduction--Interest--Interest
received on overdue payments for goods supplied--Is income derived from
business of industrial undertaking--Entitled to deduction-- CIT v. Advance
Detergents Ltd .

(Delhi) . . . 81

----Special deductions--Computation of special deductions--Effect of section
80A--Nil total income after setting off unabsorbed business losses--Special
deductions under sections 80-I, 80-IA, 80HH and 80HHD could not be given--
CIT v. Arif Industries Ltd . (All) . . . 6

S. 115C --Non-resident--Concessional rate of tax--Foreign exchange
asset--Definition--Interest earned on deposits of sums brought from
abroad--Not a foreign exchange asset--Interest on redeposited interest--Not
entitled to benefit under section 115H-- Dr. M. Manohar v. Asst. CIT (Mad) .
. . 49

S. 115H --Non-resident--Concessional rate of tax--Foreign exchange
asset--Definition--Interest earned on deposits of sums brought from
abroad--Not a foreign exchange asset--Interest on redeposited interest--Not
entitled to benefit under section 115H-- Dr. M. Manohar v. Asst. CIT (Mad) .
. . 49

S. 127 --Reassessment--Transfer of case--No order of transfer--Assessment in
Kolkata--Notice for reassessment by Assessing Officer of Delhi--Not valid--
Smt. Smriti Kedia v. Union of India (Cal) . . . 37

S. 148 --Reassessment--Transfer of case--No order of transfer--Assessment in
Kolkata--Notice for reassessment by Assessing Officer of Delhi--Not valid--
Smt. Smriti Kedia v. Union of India (Cal) . . . 37

S. 154 --Rectification of mistakes--Condition precedent--Mistake should be
apparent on record--Failure to charge interest under sections 234B and 234C
before allowing credit for minimum alternate tax--Debatable
question--Interest could not be levied in rectification proceedings-- CIT v.
Bilag Industries P. Ltd . (Guj) . . . 46

S. 158BB --Search and seizure--Block assessment--Return not submitted in
response to notice under section 158BC--Best judgment assessment valid--
Alok Todi v. CIT (Cal) . . . 102

S. 158BC --Search and seizure--Block assessment--Return not submitted in
response to notice under section 158BC--Best judgment assessment valid--
Alok Todi v. CIT (Cal) . . . 102

----Search and seizure--Block assessment--Undisclosed income--Admission by
assessee--Subsequent death of assessee--Legal representatives could not
retract admission--Assessment based on admission--Justified--Income shown in
return filed after search--Not undisclosed income--No evidence of benami
purchase--Value of purchase not assessable--Material not found during
search--Additions based on such material--Not valid--Capital gains on sale
of shares--Not undisclosed income-- CIT v. Late H. R. Basavaraj (Karn) . . .
63

S. 159 --Search and seizure--Block assessment--Undisclosed income--Admission
by assessee--Subsequent death of assessee--Legal representatives could not
retract admission--Assessment based on admission--Justified--Income shown in
return filed after search--Not undisclosed income--No evidence of benami
purchase--Value of purchase not assessable--Material not found during
search--Additions based on such material--Not valid--Capital gains on sale
of shares--Not undisclosed income-- CIT v. Late H. R. Basavaraj (Karn) . . .
63

S. 234B --Rectification of mistakes--Condition precedent--Mistake should be
apparent on record--Failure to charge interest under sections 234B and 234C
before allowing credit for minimum alternate tax--Debatable
question--Interest could not be levied in rectification proceedings-- CIT v.
Bilag Industries P. Ltd . (Guj) . . . 46

S. 234C --Rectification of mistakes--Condition precedent--Mistake should be
apparent on record--Failure to charge interest under sections 234B and 234C
before allowing credit for minimum alternate tax--Debatable
question--Interest could not be levied in rectification proceedings-- CIT v.
Bilag Industries P. Ltd . (Guj) . . . 46

S. 260A --Appeal to High Court--Grounds not raised before Assessing Officer
or Tribunal cannot be raised for first time before High Court-- Alok Todi v.
CIT (Cal) . . . 102

S. 263 --Revision--Commissioner--Industrial undertaking--Special deduction
under section 80-I--Small scale industrial undertaking--Notice of revision
not taking into account certificate granted by State Government--Not valid--
SJ and SP Family Trust, through Trustee Ashokkumar Prahladbhai v. CIT (Guj)
. . . 34

Interest-tax Act, 1974 :

Ss. 2(7), 5 --Interest-tax--Charge of tax--Loan or
advance--Tests--Intercorporate deposits--Not in nature of loan or
advances--Not chargeable to tax-- CIT v. Visisth Chay Vypapar Ltd . (Delhi)
. . . 157

ITR'S TRIBUNAL TAX REPORTS (ITR (TRIB))

Volume 12 : Part 5 (Issue dated : 28-11-2011)

SUBJECT INDEX TO CASES REPORTED IN THIS PART

Business expenditure --Disallowance--Expenses on conveyance, tea, coffee,
etc.--Assessee producing vouchers--Vouchers containing details of
expenses--Expenditure to be allowed--Income-tax Act, 1961-- ITO v. Pragati
Fashions (Ahmedabad) . . . 444

----Disallowance--Interest paid more than net income of assessee--Receipt
and utilisation of deposits explained--Not to be disallowed--Income-tax Act,
1961, ss. 36(1) (iii), 40A(2)(b)-- ITO v. Pragati Fashions (Ahmedabad) . . .
444

----Interest on borrowed funds and legal and professional expenses--Expenses
incurred towards purchase of land to be developed over period of
time--Expenses to be treated as work-in-progress--Assessee not eligible for
deduction in current year--Income-tax Act, 1961-- M. B. Agritech P. Ltd. v.
Deputy CIT (Delhi) . . . 423

Business income --Deduction of tax at source--Difference between income
shown in TDS certificates and that credited in profit and loss
account--Difference duly reconciled by assessee--Deduction of tax at source
does not determine year of taxability of income shown in TDS
certificate--Addition rightly deleted by Commissioner (Appeals)--Income-tax
Act, 1961-- ITO v. Sikka International Freight Services P. Ltd. (Delhi) . .
. 476

Charitable purposes --Exemption--Commissioner (Appeals) not adjudicating
upon violations under sections 11, 13(1)(b) and (c)--Matter
remanded--Income-tax Act, 1961, ss. 11, 13(1)(b), (c)-- Deputy CIT
(Exemptions) v. Paramartha Bhooshanam Sri Nathella Sampathu Chetty Charities
(Chennai) . . . 457

Depreciation --Plant--Air terminal--Revision--Tribunal remitting matter to
Assessing Officer to determine whether terminal with all its assets as a
whole, plant--Assessee filing technical report with list of
assets--Assessing Officer on basis thereof deciding terminal is plant--Order
cannot be revised--Commissioner not entitled to call for further
report--Income-tax Act, 1961, s. 263-- Airports Authority of India v. CIT
(Delhi) . . . 482

Income from undisclosed sources --Addition based on suppression of gross
profit and job charges not credited to books of account--Consideration of
consumption of electricity, gas, coal and diesel in particular month for
holding suppression of production--Assessee engaged in processing of fabrics
which depends upon various factors and not mere usage of electricity
--Addition to be deleted--Income-tax Act, 1961-- ITO v. Pragati Fashions
(Ahmedabad) . . . 444

Penalty --Failure to comply with notice under section 143(2)--Assessee not
receiving notice due to change of address--Reasonable cause--Penalty to be
deleted--Income-tax Act, 1961, ss. 271(1)(b), 273B-- Balram Kumar Mahendra
v. ITO (Delhi) . . . 426

----Furnishing inaccurate particulars of income--Failure on part of
Assessing Officer to point out inaccuracy in particulars filed by assessee
in comparison with accurate particulars--Mere non acceptance of claim to
deduction of expenditure not an inference of false claim--Explanation 1(A)
to section 271(1)(c) not applicable--No records evidencing explanation not
bona fide and material fact undisclosed by assessee--Explanation 1(B) cannot
be invoked--No case for levy of penalty--Income-tax Act, 1961, s. 271(1)(c),
Expln. 1(B)-- Dholu Construction and Projects Ltd. v. ITO (Ahmedabad) . . .
438

Reassessment --Direction by Commissioner (Appeals) while allowing appeal
from block assessment to reopen assessments for years in question--Assessing
Officer making reassessment under direction of Commissioner
(Appeals)--Assessing Officer not fulfilling ingredients of section
147--Reassessment proceedings to be quashed--Income-tax Act, 1961, s. 147--
Asst. CIT v. Radheshyam Mohanlal Maheshwari (Ahmedabad) . . . 429

----Reason to believe--Difference between receipts as per TDS certificate
and receipts as per profit and loss account--Specific information for
formation of rational belief that income has escaped
assessment--Reassessment valid--Income-tax Act, 1961, ss. 147, 148-- ITO v.
Sikka International Freight Services P. Ltd. (Delhi) . . . 476

Revision --Exemption--Income from warehousing--Airports Authority of
India--Income from warehousing and cargo complexes--Direction of Tribunal to
re-examine matter applying appropriate law and determine whether assessee
was running or establishing "warehouses" or "cargo complexes"--Order of
Assessing Officer allowing exemption--Assessing Officer alive to facts and
law--Order not erroneous or prejudicial to Revenue--Not liable to
revision--Exempt--Income-tax Act, 1961, ss. 10(29), 263-- Airports Authority
of India v. CIT (Delhi) . . . 482

Search and seizure --Block assessment--Penalty--Undisclosed income--Failure
by assessee to file return--Penalty rightly imposed--Income-tax Act, 1961,
s. 158BFA(2)-- Smt. Madhuben R. Barot v. Asst. CIT (Ahmedabad) . . . 465

SECTIONWISE INDEX TO CASES REPORTED IN THIS PART

Income-tax Act, 1961 :

S. 10(29) --Revision--Exemption--Income from warehousing--Airports Authority
of India--Income from warehousing and cargo complexes--Direction of Tribunal
to re-examine matter applying appropriate law and determine whether assessee
was running or establishing "warehouses" or "cargo complexes"--Order of
Assessing Officer allowing exemption--Assessing Officer alive to facts and
law--Order not erroneous or prejudicial to Revenue--Not liable to
revision--Exempt-- Airports Authority of India v. CIT (Delhi) . . . 482

S. 11 --Charitable purposes--Exemption--Commissioner (Appeals) not
adjudicating upon violations under sections 11, 13(1)(b) and (c)--Matter
remanded-- Deputy CIT (Exemptions) v. Paramartha Bhooshanam Sri Nathella
Sampathu Chetty Charities (Chennai) . . . 457

S. 13(1)(b), (c) --Charitable purposes--Exemption--Commissioner (Appeals)
not adjudicating upon violations under sections 11, 13(1)(b) and (c)--Matter
remanded-- Deputy CIT (Exemptions) v. Paramartha Bhooshanam Sri Nathella
Sampathu Chetty Charities (Chennai) . . . 457

S. 36(1)(iii) --Business expenditure--Disallowance--Interest paid more than
net income of assessee--Receipt and utilisation of deposits explained--Not
to be disallowed -- ITO v. Pragati Fashions (Ahmedabad) . . . 444

S. 40A(2)(b) --Business expenditure--Disallowance--Interest paid more than
net income of assessee--Receipt and utilisation of deposits explained--Not
to be disallowed -- ITO v. Pragati Fashions (Ahmedabad) . . . 444

S. 147 --Reassessment--Direction by Commissioner (Appeals) while allowing
appeal from block assessment to reopen assessments for years in
question--Assessing Officer making reassessment under direction of
Commissioner (Appeals)--Assessing Officer not fulfilling ingredients of
section 147--Reassessment proceedings to be quashed-- Asst. CIT v.
Radheshyam Mohanlal Maheshwari (Ahmedabad) . . . 429

----Reassessment--Reason to believe--Difference between receipts as per TDS
certificate and receipts as per profit and loss account--Specific
information for formation of rational belief that income has escaped
assessment--Reassessment valid-- ITO v. Sikka International Freight Services
P. Ltd. (Delhi) . . . 476

S. 148 --Reassessment--Reason to believe--Difference between receipts as per
TDS certificate and receipts as per profit and loss account--Specific
information for formation of rational belief that income has escaped
assessment--Reassessment valid-- ITO v. Sikka International Freight Services
P. Ltd. (Delhi) . . . 476

S. 158BFA(2) --Search and seizure--Block assessment--Penalty--Undisclosed
income--Failure by assessee to file return--Penalty rightly imposed-- Smt.
Madhuben R. Barot v. Asst. CIT (Ahmedabad) . . . 465

S. 263 --Revision--Exemption--Income from warehousing--Airports Authority of
India--Income from warehousing and cargo complexes--Direction of Tribunal to
re-examine matter applying appropriate law and determine whether assessee
was running or establishing "warehouses" or "cargo complexes"--Order of
Assessing Officer allowing exemption--Assessing Officer alive to facts and
law--Order not erroneous or prejudicial to Revenue--Not liable to
revision--Exempt-- Airports Authority of India v. CIT (Delhi) . . . 482

-- --Depreciation--Plant--Air terminal--Revision--Tribunal remitting matter
to Assessing Officer to determine whether terminal with all its assets as a
whole, plant--Assessee filing technical report with list of
assets--Assessing Officer on basis thereof deciding terminal is plant--Order
cannot be revised--Commissioner not entitled to call for further report--
Airports Authority of India v. CIT (Delhi) . . . 482

----Revision--Exemption--Income from warehousing--Airports Authority of
India --Income from warehousing and cargo comp-lexes--Direction of Tribunal
to re-examine matter applying appropriate law and determine whether assessee
was running or establishing "warehouses" or "cargo complexes"--Order of
Assessing Officer allowing exemption--Assessing Officer alive to facts and
law--Order not erroneous or prejudicial to Revenue--Not liable to
revision--Exempt-- Airports Authority of India v. CIT (Delhi) . . . 482

S. 271(1)(b) --Penalty--Failure to comply with notice under section
143(2)--Assessee not receiving notice due to change of address--Reasonable
cause--Penalty to be deleted-- Balram Kumar Mahendra v. ITO (Delhi) . . .
426

S. 271(1)(c) , Expln. 1(B) --Penalty--Furnishing inaccurate particulars of
income--Failure on part of Assessing Officer to point out inaccuracy in
particulars filed by assessee in comparison with accurate particulars--Mere
non acceptance of claim to deduction of expenditure not an inference of
false claim--Explanation 1(A) to section 271(1)(c) not applicable--No
records evidencing explanation not bona fide and material fact undisclosed
by assessee--Explanation 1(B) cannot be invoked--No case for levy of
penalty-- Dholu Construction and Projects Ltd. v. ITO (Ahmedabad) . . . 438

S. 273B --Penalty--Failure to comply with notice under section
143(2)--Assessee not receiving notice due to change of address--Reasonable
cause--Penalty to be deleted-- Balram Kumar Mahendra v. ITO (Delhi) . . .
426

Wednesday, November 23, 2011

NSDL Return Preparation Utility (RPU) version 2.6 released.... dt 19 11 2011

---------- Forwarded message ----------
From: CA UMESH MALVADE <caumesh20@gmail.com>


NSDL Return Preparation Utility (RPU) version 2.6 released

Key features of NSDL Return Preparation Utility (RPU) version 2.6

  • Unmatched challan: On import of consolidated file in the NSDL RPU (version 2.6), an alert message "Statement contains unmatched challan. The same has been highlighted in red colour" will be provided if the consolidated file imported contains unmatched challan.
  • Deductee/ Salary details records with invalid PAN: On import of consolidated file in the NSDL RPU (version 2.6), an alert message will be provided "Statement contains invalid PANs. The same has been highlighted in red colour" if the statement contains invalid PAN in deductee/ salary detail records.
  • Challan pending amount: If the user attempts to over utilize the challan amount then the error message "Deductee deposit amount exceeds the Challan / transfer voucher amount for Challan Serial Number(s)" will be provided on validating the file and the file will not be validated.
  • Update of PAN: If for a given deductee / salary detail record. if the user attempts to update the PAN more than once then error message "Further update of PAN for the deductee record is not allowed. Update of deductee PAN (valid to valid) is allowed only once." will be provided.
--
Kindly get in touch with us in case of any query.
 

Monday, November 21, 2011

ITR (TRIB) VOL 12 PART 4



 

ITR'S TRIBUNAL TAX REPORTS (ITR (TRIB))

Volume 12 : Part 4 (Issue dated : 21-11-2011)

SUBJECT INDEX TO CASES REPORTED IN THIS PART

Bad debts --Writing off debit balances of creditors--Deduction allowable--Income-tax Act, 1961, s. 36-- FAG Bearing India Ltd. v. Deputy CIT (Ahmedabad) . . . 395

Business expenditure --Disallowance--Excessive payment of royalty--Disallowance on ground that no change in know-how provided and products manufactured--Not reason to enhance payment--Matter remanded--Income-tax Act, 1961, s. 40A(2)(b)-- FAG Bearing India Ltd. v. Deputy CIT (Ahmedabad) . . . 395

----Expenditure on foreign training of director's son--No evidence that expenditure for benefit of business of assessee-company--Expenditure not deductible--Income-tax Act, 1961, s. 37-- Vishesh Entertainment Ltd. v. Asst. CIT (Mumbai) . . . 337

----Repairs expenses to plant and machinery--No opportunity to furnish bills--Matter remanded--Income-tax Act, 1961-- FAG Bearing India Ltd. v. Deputy CIT (Ahmedabad) . . . 395

Capital or revenue expenditure --Expenditure on know-how for manufacture--Know-how not owned by assessee but by collaborator--Is revenue expenditure--Income-tax Act, 1961-- FAG Bearing India Ltd. v. Deputy CIT (Ahmedabad) . . . 395

----Expenditure on licence fee--Revenue expenditure--Income-tax Act, 1961-- FAG Bearing India Ltd. v. Deputy CIT (Ahmedabad) . . . 395

Charitable purpose --Education institution--Voluntary donations permissible--No proof that assessee collected capitation fee--Not violation of section 13(1)(c)--Assessee eligible for exemption under sections 11 and 12--Income-tax Act, 1961, ss. 11, 13(1)(c), 164(1)-- Saveetha Institute of Medical and Technical Sciences v. Asst. CIT (Chennai) . . . 376

Current repairs --Scope of section 31--Expenditure on repairs of building--Allowable as revenue expenditure--Income-tax Act, 1961, s. 31-- FAG Bearing India Ltd. v. Deputy CIT (Ahmedabad) . . . 395

Income from undisclosed sources --Document alleged to evidence sale of land by assessee--Proof of possession remaining with assessee, cancellation of transaction and return of advance--Addition to be deleted--Income-tax Act, 1961-- Mansi Builders Ltd. v. Asst. CIT (Ahmedabad) . . . 358

Industrial undertaking --Special deduction under section 80-IA--Computation--Electricity generated by assessee collects by Electricity Board and releases to assessee whenever required--Assessee neither selling nor buying as far as captive consumption of power is concerned--Assessee paid consumption of power more than contribution--Market value to be taken for computation--Income-tax Act, 1961, s. 80-IA-- Sri Velayudhaswamy Spinning Mills P. Ltd. v. Deputy CIT (Chennai) . . . 353

----Special deduction--Condition precedent--Assessee a private telephone exchange operating as agent of BSNL--Purely commercial venture not involving development of infrastructure--Not entitled to special deduction--Income-tax Act, 1961, s. 80-IA(4)(ii).-- ITO v. Smt. A. Jayalakshmi (Chennai) . . . 371

International transactions --Arm's length price--Transfer pricing--Import of coal made by assessee from its associate enterprise over-invoiced--Assessee not furnishing any comparable data--Addition proper--Income-tax Act, 1961, s. 92CA(3)-- Coastal Energy P. Ltd. v. Asst. CIT (Chennai) . . . 347

Penalty --Concealment of income--Claim for deduction under section 80-IB--Disallowance of certain expenses--Penalty on account of notional reallocation of expenditure between two units--Reallocation a debatable issue--Addition on account of interest from fixed deposit--Finding by Tribunal that amount incorrectly claimed by assessee --Not concealment of income--Penalty cannot be imposed--Income-tax Act, 1961, ss. 80-IB, 271(1)(c)-- ITO v. Shilpa Filaments P. Ltd. (Ahmedabad) . . . 324

----Concealment of income--Failure to deduct tax at source--Assessee disclosing amount in accounts--Not case of concealment of income--Penalty to be deleted--Income-tax Act, 1961, ss. 40(a)(ia), 271(1)(c)-- New Horizon India Ltd. v. Deputy CIT (Delhi) . . . 332

Refund --Interest on tax refund--To be taxed--Income-tax Act, 1961-- FAG Bearing India Ltd. v. Deputy CIT (Ahmedabad) . . . 395

Search and seizure --Assessment--Addition based on statement recorded under section 132(4)--Not proper--Addition to be deleted--Income-tax Act, 1961, s. 132(4)--Circular No. 286/2/2003-IT-- Saveetha Institute of Medical and Technical Sciences v. Asst. CIT (Chennai) . . . 376

----Seizure of cash--Cash established to be fees paid by students--Addition to be deleted--Income-tax Act, 1961-- Saveetha Institute of Medical and Technical Sciences v. Asst. CIT (Chennai) . . . 376

 

SECTIONWISE INDEX TO CASES REPORTED IN THIS PART

Income-tax Act, 1961 :

S. 11 --Charitable purpose--Education institution--Voluntary donations permissible--No proof that assessee collected capitation fee--Not violation of section 13(1)(c)--Assessee eligible for exemption under sections 11 and 12-- Saveetha Institute of Medical and Technical Sciences v. Asst. CIT (Chennai) . . . 376

S. 13(1)(c) --Charitable purpose--Education institution--Voluntary donations permissible--No proof that assessee collected capitation fee--Not violation of section 13(1)(c)--Assessee eligible for exemption under sections 11 and 12-- Saveetha Institute of Medical and Technical Sciences v. Asst. CIT (Chennai) . . . 376

S. 31 --Current repairs--Scope of section 31--Expenditure on repairs of building--Allowable as revenue expenditure-- FAG Bearing India Ltd. v. Deputy CIT (Ahmedabad) . . . 395

S. 36 --Bad debts--Writing off debit balances of creditors--Deduction allowable-- FAG Bearing India Ltd. v. Deputy CIT (Ahmedabad) . . . 395

S. 37 --Business expenditure--Expenditure on foreign training of director's son--No evidence that expenditure for benefit of business of assessee-company--Expenditure not deductible-- Vishesh Entertainment Ltd. v. Asst. CIT (Mumbai) . . . 337

S. 40(a)(ia) --Penalty--Concealment of income--Failure to deduct tax at source--Assessee disclosing amount in accounts--Not case of concealment of income--Penalty to be deleted-- New Horizon India Ltd. v. Deputy CIT (Delhi) . . . 332

S. 40A(2)(b) --Business expenditure--Disallowance--Excessive payment of royalty--Disallowance on ground that no change in know-how provided and products manufactured--Not reason to enhance payment--Matter remanded-- FAG Bearing India Ltd. v. Deputy CIT (Ahmedabad) . . . 395

S. 80-IA --Industrial undertaking--Special deduction under section 80-IA--Computation--Electricity generated by assessee collects by Electricity Board and releases to assessee whenever required--Assessee neither selling nor buying as far as captive consumption of power is concerned--Assessee paid consumption of power more than contribution--Market value to be taken for computation-- Sri Velayudhaswamy Spinning Mills P. Ltd. v. Deputy CIT (Chennai) . . . 353

S. 80-IA(4)(ii) --Industrial undertaking--Special deduction--Condition precedent--Assessee a private telephone exchange operating as agent of BSNL--Purely commercial venture not involving development of infrastructure--Not entitled to special deduction-- ITO v. Smt. A. Jayalakshmi (Chennai) . . . 371

S. 80-IB --Penalty--Concealment of income--Claim for deduction under section 80-IB--Disallowance of certain expenses--Penalty on account of notional reallocation of expenditure between two units--Reallocation a debatable issue--Addition on account of interest from fixed deposit--Finding by Tribunal that amount incorrectly claimed by assessee--Not concealment of income--Penalty cannot be imposed-- ITO v. Shilpa Filaments P. Ltd. (Ahmedabad) . . . 324

S. 92CA(3) --International transactions--Arm's length price--Transfer pricing--Import of coal made by assessee from its associate enterprise over-invoiced--Assessee not furnishing any comparable data--Addition proper-- Coastal Energy P. Ltd. v. Asst. CIT (Chennai) . . . 347

S. 132(4) --Search and seizure--Assessment--Addition based on statement recorded under section 132(4)--Not proper--Addition to be deleted--Circular No. 286/2/2003-IT -- Saveetha Institute of Medical and Technical Sciences v. Asst. CIT (Chennai) . . . 376

S. 164(1) --Charitable purpose--Education institution--Voluntary donations permissible--No proof that assessee collected capitation fee--Not violation of section 13(1)(c) --Assessee eligible for exemption under sections 11 and 12-- Saveetha Institute of Medical and Technical Sciences v. Asst. CIT (Chennai) . . . 376

S. 271(1)(c) --Penalty--Concealment of income--Claim for deduction under section 80-IB--Disallowance of certain expenses--Penalty on account of notional reallocation of expenditure between two units--Reallocation a debatable issue--Addition on account of interest from fixed deposit--Finding by Tribunal that amount incorrectly claimed by assessee--Not concealment of income--Penalty cannot be imposed-- ITO v. Shilpa Filaments P. Ltd. (Ahmedabad) . . . 324

----Penalty--Concealment of income--Failure to deduct tax at source--Assessee disclosing amount in accounts--Not case of concealment of income--Penalty to be deleted--New Horizon India Ltd. v. Deputy CIT (Delhi) . . . 332