T..: 2011

Saturday, August 6, 2011

Announcements - Definition of Relative in Chapter-IV of the Council General Guidelines, 2008 - (29-07-2011)

ANNOUNCEMENT

No. ICAI/ESB//2011/02

All the members of the Institute of Chartered Accountants of India (ICAI) are
hereby informed that in terms of its decision taken at the 299th Meeting of the
Council held on 27th – 28th October, 2010, it has been decided that the term
“relative” for the purpose of Chapter-IV of Council General Guidelines, 2008
(Opinion on Financial Statements when there is substantial interest)
will have the same meaning as assigned to it in AS-18..

Announcements - Amendment in Council General Guidelines , 2008 - (29-07-2011)

ANNOUNCEMENT

No. ICAI/ESB/2011/01

All the members of Institute of Chartered Accountants of India (ICAI) are hereby informed that in terms of the Council decision taken at its 306th Meeting held on 7th - 8th June, 2011, the Chapter-XII (Minimum Audit Fee in respect of Audit) of the Council General Guidelines, 2008 appended to the ICAI publication titled “ The Chartered Accountants Act, 1949” has been repealed with effect from 7th June, 2011

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Announcement of KYC Norms -ICAI

No. ICAI/ESB/2011/03

Announcement of KYC Norms

All the members of Institute of Chartered Accountants of India (ICAI), who are in practice, are hereby informed that the Council has formulated the following Know Your Client Norms (KYC norms) at it’s 307 th Meeting held on 13thJuly,2011, which shall be recommendatory in nature, and apply only in case of attest function.

ITAT case:HUF is a “relative” for gifts exemption u/s 56(2)(v),(vi) & (vii)

CASE OF: Vineetkumar Raghavjibhai Bhalodia vs. ITO (ITAT Rajkot)

The assessee received a gift of Rs.60 lakhs from his HUF. The AO & CIT(A) held that as HUF was not covered by the definition of “relative”, the gift was chargeable to tax u/s 56(2)(v). The alternate submission that gift was exempt u/s 10(2)was rejected on the basis that s. 10(2) applied only to amounts received “out of income of the estate” on partial or total partition of the HUF. On appeal by the assessee, HELD allowing the appeal:

(i) S. 56(2)(v) exempts gifts from a “relative”. Though the definition of the term “relative” does not specifically include a Hindu Undivided Family, a ‘HUF” constitutes all persons lineally descended from a common ancestor and includes their mothers, wives or widows and unmarried daughters. As all these persons fall in the definition of “relative”, an HUF is ‘a group of relatives’. As a gift from a “relative” is exempt, a gift from a ‘group of relatives’ is also exempt since the singular will include the plural;

(ii) The gift was also exempt u/s 10(2) because the two conditions required to be satisfied for relief viz (1) that the assessee is a member of the HUF and (2) that he receives the sum out of the income of such HUF (may be of an earlier Year) were satisfied.

Registration Of Lawyers For Service Tax Stayed By Madras High Court

The Revenue Bar Association, Madras, filed a Writ Petition in the Madras High Court challenging the validity of levy of service-tax on “legal consultancy services”. The Court has passed an order of interim injunction dated 24.06.2011 restraining the Ministry of Finance from compelling the members of the Petitioner from registering themselves with the service tax authorities andcollecting service-tax from them until further orders.

Click here to download Madras HC order dated 24.06.11 staying service-tax on lawyers:

http://dhavaldesaisays.files.wordpress.com/2011/06/service_tax_registration_stay.pdf

Details regarding stay orders passed by other High courts-

AP High Court-Pursuant to a Writ Petition challenging the imposition of service tax on lawyers and the prayer seeking interim relief by way of “restraining the Respondents from giving effect to directly or indirectly or acting upon the impugned provisions or collecting any service tax on the assistance provided as an officer of the Court by an advocate“, the Andhra Pradesh High Court vide order dated 18.5.2011 has ordered “Since it is represented that the other High Courts have already granted stay in similar circumstances, there shall be interim stay, until further orders”

Delhi High Court-The Delhi Bar Association has filed a Writ Petition in the Delhi High Court being WP No. 2792 of 2011 to challenge the levy of service-tax on “Legal Consultancy Services”. The High Court has today (29th April 2011) issued notice on the Writ Petition and stayed the application of the impugned provision till the next date of hearing being 23rd May 2011.

Gauahati High Court-The Bar Association of Gauhati has filed a Writ Petition in the Gauhati High Court to challenge the levy of service-tax on “Legal Consultancy Services”. The High Court has on 29th April 2011 said the matter requires in-depth scrutiny and directed that service-tax would not be recovered till the next date of hearing being 25th May 2011.

New services at NSDL website

Two new services started at NSDL website

PAN view - Taxpayer view for TDS/TCS credit (from F. Y. 2005-06 onwards) at https://onlineservices.tin.nsdl.com/TIN/JSP/form16A/LinkToUnauthorizedPanView.jsp

To know whether your deductor/collector has filed quarterly TDS/TCS statement and provided your PAN, provide details as below.

PAN of the Deductee:
TAN of the Deductor:
Financial Year:

Verification of Forma16A generated by TIN website by Tax Payer at https://onlineservices.tin.nsdl.com/TIN/JSP/form16A/LinkToUnauthorizedView.jsp

verification of Form 16A generated from TIN website issued by Deductor to the deductee.

Financial Year:
Quarter:
TAN of the Deductor:
PAN of the Deductee:
Certificate Number:
Total Amount Deducted:

Extension in date of Package scheme of incentives-2007 to 31/08/2011

Forwarded MSG attached.

Dear Friends

The PCI(Maharashtra) 2007 has extended upto 31/08/2011 the GR is attached

Click here to download the GR passed:http://dhavaldesaisays.files.wordpress.com/2011/06/20110630125414001.pdf

Tuesday, June 28, 2011

AIR Related scrutiny assessments should be limited to info in AIR

FORWARDED MSG ATTACHED OF MR. Hiten Gada

Dear All,

Please go through the letter from CBDT in this behalf addressed to all the
CCITs and DGITs.
The assessment for AY 2009-10 are now taken up for hearing. Please make use
of this letter to convey to officer that scope of inquiry should be
restricted to matter reported in AIR If he is extending the scope in its
questionnaire they send, you may reply against the same asking for a copy of
AIR info and please ask him to restrict his scope.
I believe before submitting details as per lengthy questionnaire, it would
be advisable to obtain the copy of AIR info and submitt only the relevant
details.

To read that letter click here:https://docs.google.com/viewer?a=v&pid=explorer&chrome=true&srcid=0Bz0INWeiJAEQNWExNmY3YzYtZDExMi00YmQxLTk4M2MtMzY5NWYyMzEwNjFk&hl=en_US

Saturday, June 18, 2011

High Court stay for Service tax on bar attached hotels

FORWARDED EMAIL IS ATTACHED

"It is understood from reliable sources that Kerala High Court has granted stay for two months on service tax on Bar attahced hotels.

Service tax on Air conditioned Restaurent (Bar attached hotel) service was made taxable from 1.5.2011

The order is awaited. will share the copy of the order at the earliest.

This is for your information

With Warm Regards,

CA. TONY.M.P
THRISSUR,KERALAMobile: 094470 80631.

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Shareholding of promoter / promoter group to be in dematerialized mode

CIRCULAR

Cir/ISD/ 3/2011 June 17, 2011

To,
All Stock Exchanges

Dear Sir / Madam,

Sub: Shareholding of promoter / promoter group to be in dematerialized mode

1) SEBI had vide SEBI/Cir/ISD/1/2010 dated September 02, 2010 issued a circular on “trading rules and shareholding in dematerialized mode”. The said circular was issued in order to moderate sharp and destabilizing price movements in shares of companies, to encourage better price discovery and to increase transparency in securities market. The aforesaid circular inter-alia mandated securities of companies to be traded in normal segment, if and only if, the company has achieved atleast 50% non-promoter shareholding in dematerialized form and maintained the same on a continuous basis.

2) In order to further promote dematerialization of securities, encourage orderly development of the securities market and to improve transparency in the dealings of shares by promoters including pledge / usage as collateral, SEBI in consultation with Stock Exchanges, has decided that the securities of companies shall be traded in the normal segment of the exchange if and only if, the company has achieved 100% of promoter’s and promoter group’s shareholding in dematerialized form latest by the quarter ended September 2011 as reported to the stock exchanges.

3) In all cases, wherein the companies do not satisfy the above criteria, the trading in securities of such companies shall take place in trade for trade segment.

4) For the above purpose the exchanges shall take the latest shareholding pattern as required to be submitted by the listed companies with exchanges in pursuance to the Listing agreement as of the preceding quarter or of any subsequent date.

5) The Stock Exchanges are advised to:

a) put in place the adequate systems and issue the necessary guidelines for implementing the above decision.

b) make necessary amendments to the relevant bye-laws, rules and regulations as applicable for the implementation of the above decision immediately.

c) bring the provisions of this circular to the notice of the listed companies/issuers and member brokers of the Exchange and also to disseminate the same on the website.

d) communicate to SEBI, the status of the implementation of the provisions of this circular in the Monthly Development Report.

6) This circular is issued in exercise of powers conferred by sub-section (1) of Section 11 of the Securities and Exchange Board of India Act, 1992, to protect the interests of investors in securities and to promote the development of, and to regulate the securities market.

7) This circular is available on SEBI website athttp://www.sebi.gov.in/ under the head ‘legal framework’.

Yours faithfully,

S. Ramann

Officer on Special Duty

Integrated Surveillance Department

022-26441450

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Saturday, May 21, 2011

NEW DIRECTOR'S RELATIVE (OFFICE OR PLACE OF PROFIT) RULES, 2011

Director's Relative (Office or Place of Profit) Rules, 2011

NOTIFICATION NO. G.S.R. 357(E), DATED 2-5-2011

In exercise of the powers conferred by clause (b) of sub-section (1) of section 642, read with sub-section (1B) of section 314 of the Companies Act, 1956, the Central Government hereby makes the following Rules in supersession of the earlier Notification No. GS.R. 89(E), dated 5-2-2003, namely:—

1. (1) Short Title and Commencement: (1) These rules may be called Director's Relative (Office or Place of Profit) Rules, 2011.

(2) They shall come into force on the date of their publication in the Official Gazette.

2. Applicability : These rules shall apply to all companies registered under the Companies Act, 1956 except as provided in these rules.

3. Approval of the Central Government in case of Appointment of Relatives, etc. of Directors : No appointment for an office, or place of profit in a company shall take effect unless approved by the Central Government on an application, in respect of:—

(a) Partner of film or relative of a Director or Manager; or

(b) Firm in which such Director, or Manager of relative of either is a partner; or

(c) Private Company of which such Director or Manager or relative of either is a Director, or member, which carries a monthly remuneration exceeding, Rs. 2,50,000 p.m.

(d) An individual who is a relative of a Director, or Manager and is appointed as an Advisor or Consultant and paid remuneration including commission on periodical basis.

4. Selection of Relatives of Directors and Directors to Hold a Place of Office/Profit:—

(a) The selection and appointment of a relative of a Director for holding office or place of profit in the company with a salary exceeding Rs. 2,50,000 per month shall be approved by adopting the same procedure applicable to non-relatives and approved by a Selection Committee.

Explanation : For the purpose of the sub-rule, in the case of listed public companies, the expression "Selection Committee" means a committee, consisting at least three members, the majority of which shall be independent Directors and an outside Expert:

Provided that in case of unlisted companies, independent Directors are not necessary but outside experts should be there in the Selection Committee:

Provided further that in the case of private companies, Selection Committee is not necessary.

5. Procedure for Examination of Application : The application under rule 3 shall be examined with respect to the following, in addition to all other requirements under the Companies Act, 1956:—

(a) In the case of individual appointee, an undertaking from him that he/she will be in the exclusive employment of the company and will hold a place of profit in any other company.

(b) The monetary value of all allowances and perquisites and of total remuneration package (monthly/annually proposed to be paid to the appointee and details of the services that will be rendered by him to the company.

(c) Details of shareholding pattern particularly the shareholding of the directors along with his/her/their relatives, the public holding, institutional holding (each institution separately) and the quantum of dividend paid by the company during the last three preceding financial years.

(d) Details of the educational qualification/experience, pay scale, allowances and other benefits of similarly placed executives.

(e) In case of the appointment of a relative, an undertaking from the Director/Company Secretary of the company that the similarly placed employees are getting the comparable salary.

(f) List and particulars of the employees who are in receipt of remuneration of Rs. 2,50,000 or more per month.

(g) The total number of relatives of all the Directors either appointed as Manager/Whole time Director, Manager or in any other position in the company, the total remuneration paid to all of them altogether as a percentage of profit as calculated for the purpose of section 198 of the Companies Act, 1956.

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Friday, January 14, 2011

Supreme Court stays Delhi High Court's service tax order on rent

January, 13th 2011

The Supreme Court has stayed an order of the Delhi High Court, which stopped the Centre from recovering service tax on renting of immovable property for commercial use, including shops and malls, from some firms.

A Supreme Court bench comprising Justices Mukundakam Sharma and A R Dave stayed the interim order passed by the Delhi High Court on May 18, 2010. The Centre has challenged the order.

"There shall be an interim stay of the operation of the impugned judgement till the next date," said the apex court, directing that the matter be listed for next hearing on January 20.

The High court, allowing the appeal of around 20 firms including Home Solutions Retail, had stayed the amendments made by the government in the Budget, 2010-11.

In the Finance Act, 2010, the government had amended taxing entry of "Renting of Immovable Property service", with retrospective effect, from June 1, 2007

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