The Comptroller and Auditor General Report no. 32 of 2014 has taken the list of Chartered Accountants who have signed tax Audit cases under Income tax Act of more than 400 during FY 2012-13 and there are 22 people in the list.
Detailed article is attached.
A Tree Says...
My strength is trust. I know nothing about my fathers, I know nothing about the thousand children that every year spring out of me. I live out the secret of my seed to the very end, and I care for nothing else. I trust that God is in me. I trust that my labor is holy. Out of this trust I live.
Trees are sanctuaries. Whoever knows how to speak to them, whoever knows how to listen to them, can learn the truth. They do not preach learning and precepts, they preach, undeterred by particulars, (they speak) the ancient law of life.
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The Oldest Tree in Estonia
Photograph by Abrget47j on Wikimedia Comoons
Seen here is the famous Tamme-Lauri oak, the thickest and oldest tree in Estonia, located in Urvaste Parish, Võru County. The height of the tree is 17 metres (56 ft) with a circumference of 831 centimetres (327 in). According to researchers the tree was planted around 1326. [source]
Tamme-Lauri oak is depicted on the back side of the Estonian ten kroon banknote and the land where the tree is located was bought by the Estonian Ministry of the Environment in 2006. The oak has been under protection since 1939. [source]
The oak has been hit repeatedly by lighting, damaging the branches, and the center has become empty as a result of the multiple strikes. Before the center cavity was filled with 8 tonnes (18,000 lb) of reinforced concrete, seven people could stand inside the cavity. [source]
This photo was taken last September and was a finalist for the 2013 Wikimedia Commons Picture of the Year.
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How to Rewire Your Brain for Success
The latest neuroscience suggests you can literally "edit" your memory. Here's what this big breakthrough means for you.
The most recent edition of The New Yorker magazine contains an article about neuroscientists who study the way the brain retrieves memories. What they've found out is probably the most important breakthrough of all time in the field of successtraining.
How the Brain Remembers
Most people think about human memory as a videotape or computer memory. When you remember something, you're playing back the memory, which is vivid or vague depending on how good you are at remembering things.
It turns out that human memory isn't like that at all. When you remember something, your brain is "rewiring" the connections between neurons, literally changing the structure of your brain.
Rather than video playback, human memory is more like video editing. When you remember something you are recreating, changing, and re-memorizing. The memory is subject to change every time you remember it.
According to the latest research, it's possible to intentionally edit bad memories to remove the bad feelings associated with those memories. This new memory therapy is being used treat to PTSD sufferers.
What This Means to You
Your attitude and behavior--the two things that make you successful--are heavily influenced by your memories.
For example, if you've experienced a painful failure in the past, you're more likely to avoid taking risks, even when they're smart risks.
Similarly, if you've had successes in the past, you're more likely to take actions to repeat those successes, if you have vivid positive memories about them.
The reason that this research is so important is that we now know that you can:
- Edit your bad memories so that they don't hold you back.
- Edit your good memories so that they propel you forward.
In other words, you can literally rewire your brain to make you more successful.
How to Weaken Your Bad Memories
The method described in the article is almost exactly the same as a method that author and motivational speaker Anthony Robbins (of all people) has been training people to use for the past two decades.
To extract the poisonous fangs (as it were) of your bad memories, bring the memory into your mind, and then imagine it getting smaller and dimmer, like you're watching a tiny black-and-white TV.
Now add details that scramble the memory. For instance, if you're remembering a time when you flubbed a presentation, turn the audience (the little bitty audience in the little bitty screen) so that they're all wearing clown suits.
Do this five or 10 times and you'll discover that the bad memory simply doesn't sting any longer. If anything, the memory of that presentation will make you chuckle, because you have literally and physically rewired your brain.
How to Strengthen Your Good Memories
To make your good memories more powerful and motivating, you do the same thing in reverse. You call the memory up as vividly as you can, on a huge IMAX, surround-sound screen. Make it bright and loud.
Most importantly, insert or increase the wonderful feelings that you experienced in that situation.
Do this five or 10 times and you'll discover that what was once just a happy memory is now a driving motivation. The more you experience the memory, the more you'll want to make it real again.
I've been using this method on and off for years, without really understanding why it works. Now that I know the neuroscience behind it, I'm going to make editing and improving my memories into a daily habit.
Proposed Insurance Laws (Amendment) Ordinance, 2014: Key Aspects
Insurance Laws (Amendment) Ordinance, 2014 to Make Amendments to the Insurance Act, 1938, the General Insurance Business (Nationalization) Act, 1972 and the Insurance Regulatory and Development Authority Act, 1999
The Union Cabinet had approved the promulgation of the Insurance Laws (Amendment) Ordinance 2014 to amend the Insurance Act, 1938, the General Insurance Business (Nationalisation) Act, 1972 and the Insurance Regulatory and Development Authority Act, 1999, in accordance with the Insurance Laws (Amendment) Bill 2008 as reported by the Select Committee of the Rajya Sabha, and for suitably introducing it in the Parliament in the next session for consideration and passing.
The Ordinance has now been signed by the Hon'ble President of India.
2. The proposed step is also for furtherance of the broad objective of deepening the reform process in the economy in general and the Insurance sector in particular. This is of paramount importance to create an investor friendly environment in the country to achieve the various goals related to enhanced investment, economic growth and job creation in the economy.
3. The promulgation of the Ordinance would achieve the above critical objectives through specific provisions proposed to be introduced in the Insurance Laws through it. Some of these key aspects incorporated in the proposed Ordinance are as follows:
(a) The Ordinance is aimed at amending the Insurance Act, 1938, the General Insurance Business (Nationalization) Act, 1972 and the Insurance Regulatory and Development Authority Act, 1999 to remove archaic and redundant provisions in the Insurance Laws, empower IRDA to enable more effective regulation and enhance the foreign equity investment cap in an Indian Insurance Company from 26 to 49% with the safeguard of Indian ownership and control.
(b) Insurance penetration in India is very low compared to the global average. The sector is in need of capital to expand and ensure better access to insurance services, especially in rural areas and for economically weaker sections. Enhancement of the foreign equity cap from 26% to 49% with the safeguard of Indian Ownership and Control is a critical aspect of the Ordinance, which will potentially enhance capital availability.
(c) Towards these ends, the content of the Ordinance is aimed also at allowing insurance companies to raise capital through new and innovative instruments, which would help capital intensive insurance industry to garner resources for business growth;
(d) The Ordinance will also enable empowering IRDA to regulate key aspects of Insurance Company operations in areas like solvency, investments, expenses and commissions, which is in keeping with global best practices of regulation. The absence of such empowerment for IRDA potentially undermines faith in our regulatory framework and discourages investment in the sector.
(e) The Ordinance will also substantially enhance penalty provisions to ensure compliance with Insurance Laws by companies, which is essential to uphold the consumer interest.
Even if, growing of mushroom necessarily involve use of some soil, it could not by itself amount to carrying on a primary agricultural operation in the sense of cultivation of the soil. The assessee has failed to explain as to how it can be claimed that basic agricultural operations were carried out in mushroom production and how expenditure is incurred on primary operations i.e. planting of mushroom etc.
PFA Detailed judgment
Income from growing of mushrooms cannot be treated as an agricultural income
Chander Mohan v. ITO (ITAT Chandigarh), ITA No. 389, 377/Chd/2012 ,Date of Pronouncement 28.10.2014
Agriculture can be performed only on land and which involve basic operations like tilling of land, sowing of the seeds, planting and similar operations on the land. In case before us no tilling or planting has been done. Admittedly there is no land on which tilling operations etc. is carried out. As stated by the Assessing Officer the entire activity is carried on as a business in residential area and mushrooms are grown under controlled conditions. The basic operations which are required by an agriculturist on the land are missing in the assessee's case. Even if, growing of mushroom necessarily involve use of some soil, it could not by itself amount to carrying on a primary agricultural operation in the sense of cultivation of the soil. The assessee has failed to explain as to how it can be claimed that basic agricultural operations were carried out in mushroom production and how expenditure is incurred on primary operations i.e. planting of mushroom etc. and in the secondary operations for preserving it and making it marketable. In the light of these facts in our considered view, the Assessing officer has rightly treated the income from growing of mushroom as non-agricultural income.
Apart from above there is a further condition that such land should be assessed to land revenue which has also not been fulfilled by the assessee. There is yet another condition that such land should not be situated within Municipal limits whereas the Assessing Officer has given a clear-cut finding that the shed in which mushrooms were grown by the assessee, is located within the residential area of Jagadhari which is situated within Municipal limits. Therefore in view of these facts also the income earned by the assessee from growing of mushrooms cannot be treated as agricultural income. In view of this legal position we uphold the order of the learned Commissioner (Appeals).
Books of accounts cannot be treated as defective without pointing out the defects
The first issue relates to rejection of books of account and estimation of profit. The assessee is a private limited company and it has got its account audited under the provisions of Companies Act, 1956. The assessee has stated that it was following cash system of accounting. However the AO took the view that the assessee, being a private limited company, is required to follow mercantile system of accounting in accordance with Companies Act. Since the assessee had followed cash system of accounting and since the same is against the mandate of provision of Companies Act, the AO took the view that the books of accounts of the assessee are not reliable. Further, citing some more reasons, the rejected the books of account and estimated the net profit of the assessee @ 15% of the turnover of the assessee company.
In the appellate proceedings, the assessee submitted before the ld. CIT(A) the profit declared by it including the amount of depreciation works out to 10% of the turnover during the year under consideration and also in the immediately preceding year. It was also submitted that the assessee is following consistently cash system of accounting and since there is no change in it, the AO was not justified in rejecting the books of account maintained by the assessee, more particularly, in view of the fact that the AO did not find any defect or fault in the books of accounts. The ld.CIT(A) was convinced with the contentions of the assessee and accordingly set aside the decision of the AO relating to rejection of the books of account and consequently the estimation of income also. The relevant observations made by the ld. CIT(A) in this regard are extracted below, for the sake of convenience:
"5.3 I have considered rival submission and finding of the A.O carefully. I find that A.O. has wrongly rejected the veracity of books of accounts on the basis of his presumption which is not at all justifiable. The AO has rejected the books of accounts on the basis of five grounds and it is found that none of the ground is maintainable. Contrary to the presumption of the AO, it is found from the record itself that AO has not properly analysed the veracity of the books of accounts nor has properly appreciated the various facts. It is wrong to believe that the assessee has not shown security deposit of Rs.3,70.50,000/-. This issue shall be further discussed in respect of individual grounds of appeal based on this addition. As regards sub point No.2 of para 9 of the assessment order, it is worthwhile to mention that if there is any defect in audit report that does not mean that books of accounts of the appellant is defective. The logic of Assessing Officer is baseless, similarly interest income has been properly shown in the accounts of Mr. A.K. Chamaria, proprietor of J.P. Dental. It appears that AO has not properly scrutinized the record. Similarly an amount of Rs.1,26,90,000/-, it appears that AO has not properly scrutinized records of both the companies duly assessed by him viz. M/s Royal Dental Clinic Pvt. Ltd. and Royal Health Care Pvt. Ltd. This finding further gets support while deciding the individual grounds of appeal. Similarly, I do not find any merit in sub point 5 of para 9. Only on the basis of debit of depreciation in profit & loss account, veracity of books of accounts cannot be challenged. The arguments of AO is found to be baseless.
I have gone through the rival submissions and am of the opinion that as per Income Tax Law, assessee can maintain its books of accounts on Cash Basis or Mercantile basis. It is not the case of A.O. that assessee has maintained its books on hybrid system which has been done away with, by the Income Tax Act 1961. Further, assessee has not changed its method of accounting since inception. Therefore, this is no ground for rejection of books of account. In any event, even after rejecting of the books of accounts A.O. could not have assessed net profit @15% on turnover without any verifiable evidence in possession. There is no basis for the same. As a matter of fact, if any assessee company invests and expands its business, the depreciation would increase and if a fixed net profit is assessed, the entire provisions of allowing depreciation would become meaningless. I am therefore of the opinion that the amount of Rs.20,41 ,386/- added by Assessing Officer to assesses higher income, on this ground being unsubstantiated, is deleted"
We have carefully considered the reasoning given by the First Appellate Authority. The First Appellate Authority has held that the assessee, under the provisions of Income Tax Law, can maintain its books of accounts either on Cash Basis or Mercantile basis. He has further held that the AO has not properly analyzed the veracity of books of account nor has he properly appreciated various facts. The Ld CIT(A) has also held that the various other reasons given by the AO in support of his decision to reject the books of account are, in fact, trivial in nature, which does not warrant such a decision. Accordingly, the ld. CIT(A) has came to the conclusion that the rejection of books of account of the assessee and consequently estimation of net profit is not justified. Thus, we notice that the ld. CIT(A) has properly analyzed the facts prevailing in the instance case and has taken conscious decision on this matter. Further, it is seen that the AO has not found any defect in the books of account. At the time of hearing, the ld. DR could not file any material to controvert the findings given by the ld. CIT(A). Hence, we do not find any reason to interfere with the decision arrived at by the ld. CIT(A) on this issue. The grounds relating to this issue are rejected.
PFA
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