Monday, September 30, 2013

[aaykarbhavan] Updates that Matter (UTM# 1)



Dear All,

Please find below the "Updates that Matter (UTM # 1)",

Ø  VAT – SC Upholds K.Raheja  Works Contract Judgement–

Ø  ST :- Service Tax Due Date – 25th Oct.

Ø  Cenvat Credit Rules Amended

 

a)    VAT :- In its landmark judgement (and much awaited) in case of L&T, Larger Bench of Hon'ble Supreme Court on 26th September, 2013 has held that ratios decided by two member bench of the Hon'ble Supreme Court has laid correct legal position and has approved the same.  Further, also held that consequential amendments in law by Maharashtra VAT in regard to explanation (b)(ii) to Section 2(24) of MVAT are constitutional and held valid .

The same can expectedly surge the drive of the VAT Departments across the states to enforce the issue and render such contracts as liable to state vat tax.

Please find the link for the complete text of the Judgements... http://goo.gl/TCTv76

b)    ST: The Service Tax Return (ST-3) for the period April -September' 13 is now available in ACES for e-filing by the assesses in both offline and online version. The last date of filing the ST-3 return for the said period is 25th October, 2013.

 

c)     CENVAT :- The cenvat Credit Rules, 2004 amended - If the capital goods are cleared as waste and scrap, the manufacturer shall pay an amount equal to the duty leviable on transaction value. Hence No Link with initial cenvat availed. Link to the Original Notification.

 

Regards,

CA.Ankit Gulgulia (Jain)|B.COM(H), C.A, C.IFRS, C.B.V

Indirect Taxation| Transfer Pricing | Valuation | Corporate Laws | STPI

Direct|+9811653975 |011-27356431|011-23642055|

Email| ankit@gravita.in

 

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[aaykarbhavan] S. 40(a)(ia) TDS: High Court Disapproves Special Bench Law



Dear Subscriber,

 

The following important judgement is available for download at itatonline.org.

CIT vs. Rajinder Kumar/ Naresh Kumar (Delhi High Court)

S. 40(a)(ia) TDS: Amendment by Finance Act 2010 permitting TDS payment till due date of ROI is retrospective. Bharati Shipyard 132 ITD 53 (Mum)(SB) disapproved

In 2007-2008 the assessee made professional payments for which TDS had not been paid by 31.3.2007 though it was paid before the due date for filing the return of income. The AO & CIT(A) disallowed the expenditure u/s 40(a)(ia) though the Tribunal deleted it by relying on Virgin Creations (Cal) which held that the proviso to s. 40(a)(ia) amended by the Finance Act 2010 has retrospective effect. On appeal by the department to the High Court HELD dismissing the appeal:

The intention behind s. 40(a)(ia) is to ensure that TDS is deducted and paid. The object of introduction of s. 40(a)(ia) is to ensure that TDS provisions are scrupulously implemented without default in order to augment recoveries. It is not to penalise an assessee when payment has been made within the time stated. Failure to deduct TDS or deposit TDS results in loss of revenue and may deprive the Government of the tax due and payable. The provision should be interpreted in a fair, just and equitable manner. It should not be interpreted in a manner which results in injustice and creates tax liabilities when TDS has been deposited/ paid and the respondent who is following cash system of accountancy has made actual payment to the third party for services rendered. Also, s. 40(a)(ia), prior to the insertion of the proviso by the Finance Act 2010, was not free from interpretative difficulties and problems. The amended provisions are clear and free from any ambiguity and doubt and will help curtail litigation. The amended provision clearly support the view that the expression "said due date" used in clause A of proviso to the un-amended section refers to the time specified in s. 139(1) of the Act. The amended s. 40(a)(ia) expands and further liberalises the statue when it stipulates that deductions made in the first eleven months of the previous year but paid before the due date of filing of the return, will constitute sufficient compliance. Consequently, the proviso to s. 40(a)(ia) must be treated as retrospective in operation (Virgin Creations referred/ followed; Bharati Shipyard 132 ITD 53 (Mum)(SB) disapproved)


(Click Here To Read More)

 

Regards,

 

Editor,

 

itatonline.org

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

Latest:

CBDT Order Extending Due Date For Filing ROI For Assessees In Gujarat




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[aaykarbhavan] ICSI press release and Business standard news updates 1-10-2013




 

http://www.icsi.edu/WebModules/Linksofweeks/ICSI%20seminar%20%20Indian%20Financial%20Code.pdf

PRESS RELEASE

September 30, 2013

CHIEF OF BUREAU

ICSI National Seminar on "Indian Financial Code" at Chennai

.


CS S. N. Ananthasubramanian, President, Council of The ICSI In order to facilitate healthy debate on the recommendations of the FSLRC (Financial Sector Legislative Reforms Commission) , including the Indian Financial Code, among  the people who matter in the financial markets and to sensitise the various professionals,  including Company Secretaries, about the likely reforms path in the financial legislations, The  Institute of Company Secretaries of India ( ICSI) is organising a series of seminars and  workshops throughout the country. It has already organised four hugely successful national  seminars–one in Hyderabad, second one in Mumbai, third one in New Delhi and the fourth one in  Patna. One Such Seminar was organised on 30th September 2013 at Taj Coromandel, Chennai.

Shri P. Chidambaram, Hon'ble Union Minister of Finance, inaugurated the Seminar. In his Inaugural  Address, he said that multiplicity of institutions and regulators which had come up from time to time to  meet newly-perceived requirements, had potentially created regulatory overlaps, gaps and ambiguity on account of lack of role clarity.

This, he said, created inefficiencies in addressing critical emerging issues in an increasingly dynamic, complex and interconnected financial world."The present arrangements have a number of gap areas, where no regulators are unambiguously incharge, such as issue of regulatory oversight over diverse Ponzi schemes that we have discovered  recently. These are cleverly designed to be out of the purview of regulatory agencies," he said.

Referring to the set of financial rules, regulations and Acts that have been passed in the last 80 years, Mr. Chidambaram pointed out that these have left lapses and gaps between regulators, the legal system and  conflicting policies.

The current legislative framework, he said, addressed only temporary pressure and not critical key issues.

Besides, there were multiplicity of laws, institutions and regulators that created ambiguity.

The present financial architecture, the Finance Minister said "has evolved over the years with a sequence  of piecemeal measures and legislations responding to immediate pressures from time to time. It is not  specifically comprehensively designed to meet some key objectives".

Mr. Chidambaram also highlighted the challenges that lie ahead with regard to legislative changes, capacity building and in handling the complexity of transition from the present to the proposed code. He  maintained that a careful analysis of the existing laws in bringing legislative reforms for the financial sector was required and pointed out that the IFC had sought to advocate a non-sectoral and principlebased approach.

"Alongside, very careful analysis of every sentence of the existing laws and every section of proposed  code will need to be taken up before we agree upon large scale repeals of legislation. The requirements  on this new arrangement will be understood and attempts made to adopt necessary changes," he said.

In its report, the FSLRC had recommended that financial sector regulators such as Securities and  Exchange Board of India (SEBI) (for capital market) and Insurance and Regulatory Development  Authority (IRDA) (for insurance) be merged into a Unified Financial Agency (UFA) and the role of the Reserve Bank of India (RBI) should be restricted to regulating banks and managing the country's  monetary policy. Pointing to the challenges ahead in this regard, Mr. Chidambaram said: "I am not sure

how much this law will go through in the same fashion when it finally goes to Parliament ...[but it] will be a  major milestone in Indian financial sector reforms".

He observed that since many of the elements of the FSLRC- recommended legal processes were not  unacceptable to the present laws, "therefore, I suggest the Ministry of Finance and the regulatory  agencies may look seriously at operationalising some of these elements at the earliest even within the  scope of the present laws".

A Financial consumer is comfortable to participate in a regulated market where there are no sharks.

These should be an assurance that she would be protected if she gets into problems. However, exploiting  the limitations of the regulatory architecture, ingenious financial engineers come up with innovative  products outside the regulatory jurisdiction and deprive the consumers of such products of regulatory  protection.

We need to completely remove unreguted space. A recent attempt in this direction is the ordinance dated  July 18, 2013, re-promulgated on September 16, 2013, which considers any raising of resources by  whatever means, if no regulated otherwise, as collective investment scheme. Our endeavour is to  eliminate unregulated space.

Justice Mr. B.N. Srikrishna, Former Judge, Supreme Court of India and Chairman of the FSLRC  delivered the Key Note Address. While addressing the major concerns in the minds of various  stakeholders and doubts surrounding the recommendations of FSLRC, Justice Srikrishna emphasized  that change in the mindset and taking a bold step forward is necessary to accept the reforms envisaged  which would enable the country to attune itself while paving the way to compete with the world leaders.

However, he opined that all these reforms should be carried out not during the times of crisis but in times  of 'peace'.

 Ms. Chitra Ramakrishna, Managing Director and CEO, National Stock Exchange Limited in her Address complimented the FLSRC for the clear, concise and comprehensive set of recommendations. 

She said that the first steps in financial sector legislative reforms were enabled with the SEBI Act and in the last two decades, markets have progressed to global standards. Explaining the relevance of FSLRC 

she said that whenever big changes were required it was inevitable to change laws and many new areas of global relevance which have emerged in the last two decades needed to be reflected in the legal framework. She identified some of the issues which needed to be focussed for implementing the report; 

for institutional transformation technology needed to be leveraged which can avoid duplication of cost and efforts. She also emphasized on the need for training and capacity building, to create a cadre to deal with the new paradigm.

CS S. N. Ananthasubramanian, President, Council of The ICSI in his Presidential Address, stated that ICSI's endeavour is not only to promote good corporate governance but also promote that market governance is fostered in an even-handed manner so as to ensure seamless relationship between the two. He pointed out that the FSLRC Report was timely as there was a felt need that the institutional structure of the financial sector in India needed a review and to be recast in tune with the contemporary  requirements of the sector.

The seminars witnessed a galaxy of other speakers and Distinguished experts from government, 

regulators, industry and academia deliberated the recommendations of the FSLRC during the technical 

sessions:

□ Core Finance : Micro-Prudential Regulations, Consumer 

Protection, Resolution, Financial Inclusion and 

Market Development.

□ Regulatory Regime : Architecture, Governance and Approaches, 

Foundations of Contracts and Property.

□ Macro Finance : Monetary Policy, Capital Controls, Systemic Risk

And Debt Management.

The interactive seminar left the gathering enriched wanting for more and recharged with reformed  thoughts. The speakers at the conference are Prof. J. R. Varma, IIMA,formerly Member, FS LRC, Ms. Aarati Krishnan, Deputy Editor, HBL, Dr. Susan Thomas, Professor, IGIDR ,Ramesh Abhishek, Chairman, FMC , Ravi Narain, Vice Chairman, NSEIL, Dr. C. K. G. Nair, Adviser, MoF and formerly Secretary, FSLRC , Dr. K. P. Krishnan, Additional Secretary, MoF,R. K. Nair, Whole Time Member, IRDA, Dr. Ajay Shah, Professor, NIPFP.

Dr. Amita Ahuja)

Senior Director

(Corporate Communication)

The Institute of Company Secretaries of India

ICSI House, 22 Institutional Area

Lodi Road, New Delhi- 110 003

Telefax- 011 -24604756,

Email: dprpp1@icsi.edu

  

Sebi asks Goyal to sell 6% more in Jet


SAMIE MODAK & ANEESH PHADNIS

Mumbai, 30 September

Market regulator Securities and Exchange Board of India ( Sebi) wants Naresh Goyal to sell another 6 per cent stake in Jet Airways before the company makes its proposed 24 per cent preferential allotment to the Abu Dhabi- based Etihad Airways.

Though public shareholding in Jet is already down to the mandated 25 per cent, the regulator wants its promoters to pare their stake further to ensure better corporate governance and broad- based shareholding.

If Jet promoters sell 6 per cent in the company, the holding will fall to 69 per cent and after the allotment of 27 million equity shares is made to Etihad it will further fall to 51 per cent. In June, the company's promoters had sold 5 per cent stake through an offer for sale (OFS) to meet the minimum public shareholding requirement. To meet Sebi's directive, the promoters may have to go for another OFS.

"Naresh Goyal has committed to maintain his holding at 51 per cent. To ensure disbursed public shareholding, we have asked that the 6 per cent dilution be made before the preferential allotment," said a senior Sebi official.

Jet Airways did not respond to an email query on the issue.

Though the Abu Dhabi- based airline will be treated a public shareholder, Sebi does not want the combined shareholding of Jet and Etihad to go beyond 75 per cent. Sebi has also taken a view that under the revised deal structure, Etihad will not be required to make an open offer to Jet's shareholders and the two airlines won't be treated as persons acting in concert ( PAC).

Turn to Page 22 >

Wants stake sale before Jet makes allotment to Etihad HEADWINDS TO TAILWINDS

Shareholding pattern in Jet Airways

Current Ahead of allotment After allotment Sebi's fresh views

Prima facie JetEtihad deal won't trigger open offer Jet, Etihad not persons acting in concert ( PAC) Jet, Etihad will be treated as PAC if other govt agencies take a decision that the deal affects change in control Asks Jet promoters to sell 6% before preferential allotment to Etihad


Click here to read more...Turn t

Click: Article continued from…Sebi asks Goyal to


Sebi asks Goyal to sell...


Last week, Sebi wrote to the department of economic affairs ( DEA) stating, "... the rights proposed to be acquired by Etihad do not, prima facie, appear to result in change in control. Consequently, Etihad would not be deemed as PAC with the current promoter group of Jet." The regulator

 

--
 
CS A Rengarajan
9381011200

CS Benevolent Fund is a collective effort towards extending the much needed financial support to the community of Company Secretaries in times of distress  Let us lend support and join for noble cause.



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[aaykarbhavan] Judgment



Allowability of sponsorship expenses in the absence of comment of AO in the original order

Posted on 30 September 2013 by Diganta Paul

Court

INCOME TAX APPELLATE TRIBUNAL


Brief

On the facts and in the circumstances of the case, the ld.CIT(A) has erred in annulling the re-assessment proceedings u/s 147 on the basis of change of opinion by the AO on the issue of 'allowability of Sponsorship Expenses' even when the AO did not comment upon this issue either in the original order u/s 143(3) or in the Office Note appended thereto, the assessee's claim of 'Sponsorship Expenses' having being a reasons for reopening of the original assessment.


Citation

Deputy Commissioner of Income Tax,Central Circle-9,New Delhi.(Appellant) Vs. M/s SPA Enterprises Limited,303, D-2, Southern Park,District Centre Saket,New Delhi – 110 020.PAN: AACCS0628R.(Respondent)


Judgement

IN THE INCOME TAX APPELLATE TRIBUNAL
DELHI BENCH 'G': NEW DELHI
 
BEFORE SHRI G.D.AGRAWAL, VICE PRESIDENT AND
SHRI I.C.SUDHIR, JUDICIAL MEMBER
 
ITA No.496/Del/2010
Assessment Year: 2006-07
 
Deputy Commissioner of
Income Tax,
Central Circle-9,
New Delhi.
(Appellant)
 
Vs.
 
M/s SPA Enterprises Limited,
303, D-2, Southern Park,
District Centre Saket,
New Delhi – 110 020.
PAN: AACCS0628R.
(Respondent)
 
Appellant by: Shri Ramesh Chandra, CIT-DR.
Respondent by: Shri Ajay Wadhwa, Advocate.
 
ORDER
PER G.D.AGRAWAL, VP:
 
This appeal by the Revenue is directed against the order of learned CIT(A)-II, Delhi dated 23rd November, 2009 for the AY 2006-07.
 
2. The grounds raised by the Revenue read as under:-
 
"1.(a) On the facts and in the circumstances of the case, the ld.CIT(A) has erred in annulling the re-assessment proceedings u/s 147 on the basis of change of opinion by the AO on the issue of 'allowability of Sponsorship Expenses' even when the AO did not comment upon this issue either in the original order u/s 143(3) or in the Office Note appended thereto, the assessee's claim of 'Sponsorship Expenses' having being a reasons for reopening of the original assessment.
 
1(b) On the facts and in the circumstances of the case, the ld.CIT(A) has erred in annulling the re-assessment proceedings u/s 147 without going in to the merits of the additions including the addition of Rs.2.0 Crore on account of accommodation entries of Rs.2.00 Crore taken by the assessee from M/s B.T.Technet Ltd., admittedly an entry provider."
 
3. The facts of the case are that the original assessment under Section 143(3) was completed on 30th December, 2005 at the income of `3,58,02,994/-. Thereafter, the Assessing Officer issued notice under Section 148 on 24.07.2007 and reassessment was completed on 24.12.2008 at the total income of `5,84,46,500/-. The learned CIT(A) cancelled the reopening with the following finding:-
 
"4.9 Based on the above discussions and decisions, I agree with the contention of the appellant raised through these four grounds that in the instant case also where reopening of the assessment has been done purely based on the change of opinion and therefore reassessment proceedings have to be held to be invalid. The first four grounds are, therefore, decided in favour of the appellant."
 
4. The Revenue, aggrieved with the order of learned CIT(A), is in appeal before us.
 
5. At the time of hearing before us, it was pointed out by the assessee's counsel that the assessment has been reopened only on the ground that the sponsorship expenses incurred by the assessee were not for regular running of the business and should have been capitalized. That during the course of assessment proceedings under Section 143(3), the Assessing Officer has raised the query with regard to sponsorship expenses and the assessee has furnished the reply dated 6.10.2005. Thus, the assessment has been reopened merely on change of opinion. Apart from relying upon various decisions referred to in the order of learned CIT(A), he further relied upon the recent decision of Hon'ble Jurisdictional High Court dated 12th December, 2012 in the case of CIT Vs. Orient Craft Limited in ITA No.555/2012.
 
6. Learned DR, on the other hand, relied upon the order of the Assessing Officer.
 
7. We have heard both the sides and perused the material placed before us. The copy of reasons recorded for issue of notice under Section 148 is placed at page 29 of the assessee's paper book, the relevant portion of which reads as under:-
 
"Assessment in this case was completed u/s 143(3) at an income of Rs.35802994/- which was subsequently rectified at Rs.35602994/-.
 
Later on it was noticed that sponsorship expenses amounting to Rs.3554382/- allowed to the assessee were on account of payments made by the assessee on behalf of its candidates send abroad for higher studies. As the expenditure incurred was not for regular running of the business and has enduring benefits on the business of the assessee the same should have been capitalized and added back to the income of the assessee.
 
I have therefore, reason to believe that an amount of Rs.3554382/- has escaped assessment within the meaning of section 147(b) of the IT Act, 1961."
 
8. However, we find that during the course of assessment proceedings, the Assessing Officer had raised a query in this regard and the assessee had furnished the reply thereto on 6.10.2005. Therefore, the aspect of the sponsorship expenses was duly examined in original assessment proceedings. Even from the reasons recorded for reopening of assessment, it is evident that the Assessing Officer noticed about the sponsorship expenses from the material already on record taken during the original assessment proceedings. Therefore, clearly, the reopening of assessment is on the basis of change of opinion by the Assessing Officer. We find that in a recent decision, Hon'ble Jurisdictional High Court in the case of Orient Craft Limited (supra) held as under:-
 
"14. In the present case the reasons disclose that the Assessing Officer reached the belief that there was escapement of income "on going through the return of income" filed by the assessee after he accepted the return under Section 143(1) without scrutiny, and nothing more.
 
This is nothing but a review of the earlier proceedings and an abuse of power by the Assessing Officer, both strongly deprecated by the Supreme Court in CIT vs. Kelvinator (supra). The reasons recorded by the Assessing Officer in the present case do confirm our apprehension about the harm that a less strict interpretation of the words "reason to believe" vis-a-vis an intimation issued under section 143(1) can cause to the tax regime. There is no whisper in the reasons recorded, of any tangible material which came to the possession of the assessing officer subsequent to the issue of the intimation. It reflects an arbitrary exercise of the power conferred under section 147.
 
15. For the above reasons, we answer the substantial question of law framed by us in the affirmative, in favour of the assessee and against the Revenue. The appeal of the Revenue is accordingly dismissed. There shall be no order as to costs."
 
9. Thus, Hon'ble Jurisdictional High Court has held that even if there is no regular assessment, the review of the earlier proceedings is not possible. The case of the present assessee is much better because in its case, original assessment was completed under Section 143(3) and during the course of assessment proceedings, the Assessing Officer examined the aspect of sponsorship expenditure. In view of the above, we are of the opinion that the above decision of Hon'ble Jurisdictional High Court would be squarely applicable to the case of the assessee. Respectfully following the same, we uphold the order of learned CIT(A) and dismiss the appeal filed by the Revenue.
 
10. In the result, the appeal of the Revenue is dismissed.
 
Decision pronounced in the open Court on 2nd August, 2013.
 
Sd/- Sd/-
(I.C.SUDHIR) (G.D.AGRAWAL)
JUDICIAL MEMBER VICE PRESIDENT
 
Dated: 02.08.2013
VK.
 
Copy forwarded to:
 
1. Appellant: Deputy Commissioner of Income Tax, Central Circle-9, New Delhi.
2. Respondent: M/s SPA Enterprises Limited, 303, D-2, Southern Park, District Centre Saket, New Delhi – 110 020.
3. CIT
4. CIT (A)
5. DR, ITAT
 
 
Assistant Registrar


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[aaykarbhavan] Notice, Directors’ Report for FYE 31.03.13 for Pvt Co (not a Subsidiary of Public Co)



Hi,

Someone may please help me, if possible:

Query 1

I need format for NOTICE, DIRECTORS' REPORT FOR FYE 31.03.13, (in view of CA 2013, I request for the same).


Thanks in advance for your replies.

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[aaykarbhavan] Business Line,



Pilot bats for tax breaks on CSR spend

Our Bureau
The Corporate Affairs Ministry has backed the idea of providing tax breaks for companies spending on corporate social responsibility (CSR) initiatives.
The new Companies Act makes it mandatory for a category of companies, based on their size and profitability, to spend 2 per cent of their net profits towards CSR annually.
While admitting that companies should be given some tax concession for spending on CSR activities, Corporate Affairs Minister Sachin Pilot said it was eventually the Finance Ministerwho would decide on the issue.
Pilot clarified that the areas for CSR spend were left to the discretion of the companies concerned, but the disclosure of such spends was mandatory.

No SFIO report on Tata-Unitech so far, says Pilot

Our Bureau
The Corporate Affairs Minister Sachin Pilot said on Monday that his Ministry had so far not received any report on the probe by the Serious Fraud Investigation Office (SFIO) in the Tata-Unitech matter.
"'The Ministry has so far not received any such report," Pilot told reporters, when asked about the SFIO probe. He was speaking to reporters on the sidelines of a CII event on corporate social responsibility.
Separately, a Ministry official said that the SFIO probe has been complete and the report was expected within a fortnight.
The Mumbai unit of the SFIO had reportedly conveyed to the Ministry in April that the Rs 1,700 crore given by the Tata Group to Unitech Group was meant to enable the latter purchase telecom licences in January 2008. This SFIO finding is part of a larger probe initiated against Vaishnavi Corporate Communications.
On the NSEL issue, Pilot said the Registrar Of Companies was looking into the alleged violations of the Companies Act by Financial Technologies (India) Ltd and its group companies.
When asked about the allegations made by the SFIO, a Tata Sons spokesperson said, "The Tata group has comprehensively addressed questions from all Government agencies and fully cooperated with all authorities in their investigations, including the SFIO. The group has not seen any SFIO report so far; as such, we are not in a position to address any specific questions relating to any such report. We stress that our group is committed to the highest standards of ethics and business conduct."

Unitech denies allegations

Unitech said that the Tata-Unitech transaction was a legitimate and bona fide business transaction between two real estate companies. "In fact, contrary to what is being alleged, Tata Realty is in advance stage of completing a real estate development on the captioned land which is being marketed as "Tata Primanti"," said Unitech spokesperson.
The Tata-Unitech transaction has been extensively investigated by several agencies including the CBI, and no irregularity has been found in this transaction according to the CBI presentation before the JPC quoted by the media, it added. "None of our companies are/ have been under any investigation by the SFIO. This fact can be independently corroborated from the list of companies under investigation and companies already investigated by the SFIO during the last 3 years, as provided by Sachin Pilot before the Rajya Sabha," Unitech said.
(This article was published on September 30, 2013)

Stretch your willpower…

Bharat Savur
Please savour exercising as a special experience — the stretching, the twisting, the poetic rhythm, the 'aha!' feeling… Talk about how it has benefited you, your fitness, your self-confidence. Hail it as an event, as your saviour. Praise and be raised.
"Why?" you may ask. Why not? If you can admire a work of art, why not admire a work of heart? There are far too many people having a negative perception of their body. To exercise seems a "waste of time", insinuate these wet blankets. They are so busy criticising their body, so rapt in responding to compliments on their toned look with a "Oh, but I haven't lost any weight", that they literally think themselves out of exercising. In fact, most often, it's not the body that lets you down, it's the mind.
Don't you see? Wrong thinking, not savouring, actually erodes trust and good intentions that are so vital to the experience of exercising. When you don't trust, your mind fills with grey negative formations. And you find yourself literally yawning and wishing you were elsewhere while working out. No, don't turn a beautiful stress-busting exercise into a boring stress-filled activity. Get a grip on your mind. Trust the process of working out as a healing one, trust your body, trust the biological laws, trust your sense of discrimination to know what's truly good for you. When trust soaks your spirit, stress topples over, meaning enters, your sense of purpose strengthens.
If you've led a sedentary lifestyle all along, it's easier to sit than stand up and exercise. And when you do work out, the old tendencies resist. To engrave the new habit of exercising in the brain, use the etching tool of savouring. If you enjoy the activity, the brain willingly grooves it in its circuit.
Yes, after a long break from exercising you may have to force yourself. That's okay. Forcing yourself powers your self-regulatory sinew, your will. To empower your will, follow this research-tested method: In an exercise-journal, write the date and 'My goals for this week'. Write down everything. If you plan to walk this week, write down the time, distance, destination, all kinds of details. For example: "I'll walk to the next bus-stop. I'll start 10 minutes early. I'll pack my office-footwear, medication… I'll do a few warm-ups with music. That's my starting cue. I'll switch off my mobile so that I don't get distracted. I'll take the stairs for a bit of extra cardio and sprint through the back gate to avoid small talk with neighbours…"
Journaling serves a dual purpose: *In stating your intentions, you strengthen them and get motivated. *In taking measures against being distracted, you nimbly skip over the humps where the temptation to not exercise lurks. Writing helps turn your promises into plans — you think ahead and effectively find ways to keep moving.
It helps to promise yourself a reward after you've acted on your plan. Say, a tasty, sugar-free energy bar or a nice, low-fat smoothie. More on savouring:
Observe how good you feel after exercising and discuss it at length.
Bask in the sense of accomplishment of seeing yourself through a beautiful cardio session.
Enjoy the reward - it's the icing on the cake.
It's also an effective savouring practice to build up your anticipation: Anticipate getting into an outfit two sizes smaller. Anticipate how sleek you'll look. Such anticipations aren't just temptation-busters, they are powerful enough to actually form a habit of exercising.
Alongside, journal the positive differences in you: Eating with more discrimination and, so, feeling healthier; being more productive due to increased stamina; feeling calmer in tense situations; exhibiting patience with colleagues and relatives; reaching out for credit cards or cigarettes less often…
In fact, exercise is referred to as a 'keystone habit' — meaning, its positive effects spill over to bring on other good habits. There's no doubt in my mind that exercise is a transformative force. I'm not claiming to be perfect because I exercise, but I am definitely better in every way — physically, mentally, spiritually. I still get the occasional sore-throated cough but I have this deep trust in the biological law that "this too shall pass". And it does.
Each of us has two sides to our personality — the loner and the social dude. So, create two habits: One, exercise at home when you need solitude and silence; and two, join a gym/ class where the people are friendly and there's healthy synergy. I know that human connection is more healing than a state-of-the-art treadmill. When exercising satisfies a social need, when your savouring factor gets a boost, you just cannot not exercise.
Most importantly, please conserve your willpower energy. For example, don't fritter it on stuff like answering every email, taking every call with a whiner on the other end, arguing, fuming, and so on. Savour your exercising life, don't squash it.
The writer is co-author of the book 'Fitness for Life'.
(This article was published on September 26, 2013)

CAs to manually file 2 million audit reports in 5 days

K. R. Srivats
Unable to sort e-filing muddle, taxman loads burden at 11th hour
Unable to solve software glitches in its e-filing system, the Central Board of Direct Taxes has asked assessees to manually file tax audit reports by September 30. The new requirement of manual filing of tax audit reports came through a CBDT notification on September 26.
This means chartered accountants, who do a bulk of the preparation and filing of such reports on behalf of clients, have only five days to comply, failing which tax officials are empowered to levy penalties, which can run into lakhs of rupees in many cases.
The scope of e-filing was expanded this year (assessment year 2013-14) with the law mandating that all tax audit reports be filed electronically.

Corporates unaffected

Indian tax authorities get about 2 million tax audit reports every financial year, a bulk of which are usually filed just before the deadline. Of this, about 5 lakhrelate to corporates, and the remaining relating to individuals, partnership firms.
The latest problem is going to mostly affect the small and medium assessees. Large corporates will not be affected as they are required to file returns by November 30. Strangely, the CBDT on the same day (September 26) extended the last date for electronic filing by a month from September 30 to October 31, even while mandating manual filing by September 30.

Much trouble

Income tax assessees were facing difficulties on uploading due to the frequent changes in the e-filing utility.
In September alone, the utility was changed on three occasions .
The CA fraternity is anguished as most of the tax audit work in the country is done by them — whether it is for corporates, individuals other non-corporate categories.
This is because tax audit reports, from the current assessment year onwards, were required to be filed only electronically and there was no procedure for manual filing for assessment year 2013-14.
"We are requesting CBDT not to stipulate manual filing of tax audit reports.
The electronic filing of the tax audit reports will be done by the extended time of October 31", Subodh Kumar Agarwal, President of the Institute of Chartered Accountants of India (ICAI) told Business Line.
Manual filing is not required by either income tax law or the income tax rules — so, why insist on it through a notification, he asked.
ICAI has therefore approached CBDT seeking withdrawal of the latest directive .
With civil disturbances in Andhra Pradesh and natural calamities in Gujarat and Uttarakhand, as well as massive power blackouts in many other regions hampering work, it is difficult to ensure manual filing of the tax audit reports in a span of four days, it has been submitted.

SBI chairman summoned to court on last day in office

Vinson Kurian
Contempt petition filed by officers' union for withdrawing 'check-off' facility
The Madras High Court has issued a notice to Pratip Chaudhuri, Chairman of State Bank of India, to present himself in court on Monday, his last day in office.
Chaudhuri and Ranjit Goswami, Chief General Manager (Human Rsources) of the bank, have been summoned in a contempt petition filed by the SBI Officers' Association and State Bank Officers' Federation.
A notice has been sent to Chaudhuri in his personal name as well, D. Thomas Franco Rajendra Dev, General Secretary of the Officers' Union, Chennai circle, informed Business Line.
The contempt petition was invoked against breach of an interim stay on a contentious circular issued by the bank withdrawing the 'check-off' facility provided to the association.
This facility provided a lifeline to the association in the form of individual subscriptions from salary accounts of member-officers routed to its account by the bank.

LIFELINE

The management ensured that subscriptions ranging from Rs 100 to Rs 200 per employee went into the association's account on the 25{+t}{+h} of every month, the salary payment day.
The convention has been that, at the time of joining, every employee gives a standing instruction in writing authorising the bank to deduct the sum from his/her salary account.
The management has sought to withdraw the facility suggesting to members of the unions that they pay up their subscriptions individually, Rajendra Dev said.
Earlier last week, the court had allowed a petition seeking an interim stay on the management's circular withdrawing the 'check-off' facility.
While grating the interim stay, Justice N. Kirubakaran had observed that the facility was in operation right from 1975.
It is sought to be withdrawn, and in fact given effect on September 17, 2013, at a time when a similarly placed union (staff union) is enjoying the same benefit.

ORDER IGNORED

"This amounts to discrimination," Justice Kirubakaran said in his order, copy of which is available with Business Line. But the management chose to ignore the stay order and went ahead to pay the salary on September 25 without effecting the check-off facility to members of the circle associations.
This is what forced the unions to file a contempt of court petition, Rajendra Dev said. SBI officers and clerical staff unions have a combined membership of more than two lakh.

Tax wrangle: I-T Dept freezes Nokia's immovable assets

Our Bureau
Nokia India's assets have been frozen by the Tax Department even as the handset maker is in the process of completing its $7.2-billion deal with Microsoft.
The Indian tax authorities froze Nokia's mobile phone manufacturing plant in Chennai, certain other buildings and bank accounts last week. Following the Tax Department's action, Nokia moved the Delhi High Court which lifted the sanction on the company's bank accounts, but its immovable assets remain frozen.
The move has been taken by the Tax Department after the handset maker disputed a Rs 4,000-crore tax notice. The Department sought to ensure that the company had sufficient funds to pay the amount before assets are sold to Microsoft.
Nokia said that it welcomed the High Court's order and is now working closely with the tax authorities to find a solution to the remaining issues. "Nokia has sufficient assets in India to meet its tax obligations, details of which will be shared with the tax authorities to allay any concerns they may have."
"Nokia reiterates that it operates with transparency in its business transactions, and is committed to resolving its outstanding issues with Indian tax authorities in accordance with all applicable laws, while also ready to defend ourselves vigorously as needed," it added.
Nokia's Global CEO Stephen Elop had rushed to India to meet top Government functionaries soon after announcing the deal with Microsoft, in a bid to resolve the tax issue.
Nokia India had been slapped with a tax demand notice for the five years beginning 2006-07. The demand concerns the tax treatment of payments made for software supplied by Nokia's parent company for devices produced in India. Indian tax authorities consider the payments as royalties that are subject to taxation in India.
thomas.thomas@thehindu.co.in

NSEL, a case of bad book-keeping

MOHAN R. LAVI
 
  
No one knew of those empty godowns.
No one knew of those empty godowns.
Adoption of global accounting norms would have thrown up the inventory problem.
There's a Malayalam proverb, "adi thettiyaal aaneyum veezhum", which translates as, "Even an elephant will fall with a wrong step".
The National Spot Exchange Limited, which was considered to be an elephant for the commodity community not so long ago, is today on life support.
What started as a payment crisis at the NSEL has turned into a mind-boggling affair with everyone who had anything to do with the exchange — promoters, management, borrowers, stockbrokers — all seemingly having a role to play.
Not surprisingly, the auditors have joined in now, with the body that governs the profession — the Institute of Chartered Accountants of India — on the verge of asking auditors the right questions on what they did wrong.

NSEL Crisis

With easy money from banks consigned to history now, the dramatis personae in the NSEL crisis thought of an innovative way out — why not convert the exchange itself into a bank?
The clients of NSEL brokers had taken positions on longer-term forward contracts when the exchange was only permitted spot contracts in commodities.
Worse, the NSEL permitted 25- to 45-day forward contracts without verifying that the commodities had actually been deposited in the warehouses.
Funding may not have been restricted by the traders and processors to the core business activity.
It is eminently possible that money raised at the NSEL may have been directed to other popular investment channels such as real estate or gold.
But with both these markets depressed, it proved difficult to quickly liquidate assets and return the money — hence the default.
It is widely believed that the registered warehouses of the NSEL do not have the required amount of goods to clear the dues of investors.
The two ingredients that are apparent in any crisis or scam — sheer greed coupled with lax regulatory oversight — stand out glaringly in the NSEL saga.

A solution

It is not often that accounting standards can assist in minimising scams. And, unravelling financial crises is not the stated objective of accounting standards. However, the International Accounting Standard 2 (IAS 2) on Inventories has a solution to the situation that NSEL and its entourage find themselves in.
It states that commodity broker-traders who measure their inventories at fair value less costs to sell. Changes in fair value less costs to sell are recognised in profit or loss in the period of the change. Broker-traders are those who buy or sell commodities for others or on their own account.
The inventories they deal in are principally acquired with the purpose of selling in the near future and generating a profit from fluctuations in price.
The Indian equivalent of IAS-2 does not have this paragraph on inventory of commodity brokers, though the IFRS-equivalent has it.
Had this clause been part of our accounting standards, users of financial statements could at least have known that the borrowers in the NSEL crisis did not have any commodities as collateral to back the money they traded in.
In case they did have commodity stock and had traded in them, the gain/loss on these transactions would have been reflected in their financial statements — which could have provided indicators that they were dealing with unsustainable volumes.

Move over to IFRS

The powers that be have been pussyfooting on the adoption of International Financial Reporting Standards (IFRS) for years now. It is time the Government announces IFRS adoption — in a phased manner as was envisaged in the roadmap. This should not be stretched to eternity but should be reasonable — asking all entities to transition within a period of three years seems fair.
With their laser-like focus on fair value as the default measurement option, financial reporting and disclosures, IFRS standards could be one of the ways in which we could expect less scams.
Like the US' GAAP and IFRS, the Ministry of Corporate Affairs should ensure that introducing 'prior period' items in financial statements, reflecting earlier omissions and errors, is considered a serious error.
Both, the entity that prepared them and the auditor who signed them should be called into question. Blaming changes in the financial statements on subsequent events will simply not wash.
(The author is Director, Finance, Ellucian.)
(This article was published on September 30, 2013)

Oct 31 deadline for e-filing audit reports of tax returns

PTI
The government today extended the last date for uploading audit reports of income tax returns by a month to October 31.
The due date, which was earlier September 30, has been extended in the wake of difficulty in uploading the report of audit electronically as prescribed under the sub—rule (2) of Rule 12 of the IT rules for the assessment year 2013—14.
"It has come to the notice of the CBDT (Central Board of Direct Taxes) that many assessees who are required to file their income tax returns by September 30, 2013 are finding it difficult to upload the report of audit electronically.
"Therefore, the CBDT has decided to extend the time for furnishing the report of audit electronically till October 31, 2013," the finance ministry said in a statement.
The statement, however added that, the assessees are required to file the report of audit manually with the jurisdictional Assessing Officer by September 30, 2013.
As per the Central Board of Direct Taxes (CBDT), there has been an unprecedented surge in number of returns being e—filed.
(This article was published on September 26, 2013)

Mumbai police files FIR against NSEL promoters, directors, defaulters

PTI
The Economic Offence Wing of the Mumbai police today searched the offices and residences of promoters, directors and defaulting brokers of the crippled National Spot Exchange (NSEL) and filed an FIR against them in connection with Rs 5,600 crore payment crisis.
The NSEL, promoted by Jignesh Shah-led Financial Technologies, has been facing problems in settling Rs 5,600 crore dues of 148 members/brokers, representing 13,000 investor-clients, after it suspended trade on July 31 on the government's direction.
"An FIR was registered today against the NSEL promoters, directors and defaulters on charges of cheating, forgery and breach of trust among others," an official at Economic Offence Wing of the Mumbai Police told PTI.
Swinging into action following the Mayaram committee report that implicated the exchange and its promoters, the authorities conducted searches at 184 locations across 16 States, including Mumbai residences of Jignesh Shah, Chairman and Managing Director of Financial Technologies, and Joseph Massey, Managing Director and CEO of MCX Stock Exchange.
While Shah could not be reached for comments, Massey, denied any raid at his residence.
"While I clarify that there was no raid at my house, I want to say that I am willing to cooperate fully with the police in the investigations," Massey told PTI.
A special investigating team had been formed to conduct a preliminary inquiry after complaints from a couple of investors against NSEL, the EOW official said.
The inquiry concluded that it was a criminal offence following which the FIR was registered, the official added.
The SIT conducted its inquiry after receiving crucial inputs from the commodity market regulator Forward Markets Commission and Registrar of Companies, the official said.
BJP leader and Investors Grievances Forum president Kirit Somaiya had also recently filed a PIL in the Bombay High Court stating that NSEL forged/manipulated documents regarding stocks and liquidity and allowed some of the companies to pledge the same stock with more than one financial institution.
Somaiya has also alleged that government officials and politicians connived with NSEL to cheat investors.
There are 24 buyers/members who have to pay Rs 5,600 crore to the spot exchange for settling dues of the investors.
(This article was published on September 30, 2013)

No impact of crisis on MCX AGM

Our Bureau
Unlike the ruckus at the Financial Technologies Annual General Meeting in Chennai last week, it was a smooth sailing for the Multi Commodity Exchange (MCX) directors at the shareholders' meeting held in Mumbai on Monday.
Jignesh Shah, Promoter of MCX, was conspicuous by his absence at the meeting, which was chaired by the Forward Markets Commission nominated independent director R.M. Pravinkumar.
Investors were concerned over the impact of the National Spot Exchange fiasco, and the related discussions dominated the proceedings for the better part of the meeting. Pravinkumar explained in great detail that the crisis in NSEL would not have any impact on the MCX, and added that the latter was a tightly regulated exchange and had risk management practices in place.
"Except for the fact that MCX and NSEL share the same parentage in Financial Technologies, there is no link between both the exchanges," he added.
Investors also insisted that the exchange should consider distributing Rs 1,000 crore reserves in its exchange books as dividend to shareholders. Pravinkumar said the exchange would use the reserves to launch new products, once the FCRA Act is amended.
The exchange also dismissed reports that estranged Managing Director of NSEL Anjani Sinha or his close relatives have any trading position on the MCX.
(This article was published on September 30, 2013)

Penalising cos: Suspension should be last step, says SEBI

Our Bureau
SEBI has mandated a four-step procedure for stock exchanges to take action against companies that do not comply with listing agreement norms culminating in the suspension of the scrip.
The aim is to protect the interest of non-promoters, as the exit route is closed for such investors after suspension of trading.
The market regulator has prescribed a standard operating procedure for consistency and uniformity of approach for taking such action for non-compliance regarding timely submission of annual reports, shareholding pattern, financial results and compliance of corporate governance.
Corporates would first be fined on a daily basis.
After two quarters of non-compliance, the company would be shifted to 'Z' Category, where the trades would be settled on a trade-to-trade basis.
Continued non-compliance would lead to freezing of shares of the promoters and promoter group.
This would be done before suspension of trading in shares of the company.
To provide an exit window for the non-promoters, after 15 days of suspension, trading in the shares of a non-compliant entity will be available on the 'trade-for-trade' basis, on the first trading day of every week for six months.


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