Saturday, January 31, 2015

[aaykarbhavan] Business Standard

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Posted by: Dipak Shah <djshah1944@yahoo.com>

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[aaykarbhavan] Re: {Amresh's CA's} Re: {Amresh's CA's} Re: {Amresh's CA's} Re: [Thane CAs] RBI on Bank Auditors:If RBI inspectors can identify fraud,why banks' auditors not?:RBI Comments on Bank Auditors

Dear Sirs,

I do not agree with . I have worked with the Branch so efficiently , as a proprietor only, that work could be done within time frame work and found out fraud in Loans ......... We worked up to even late night!!!! with the Branch co-operation and co-ordination.

Proper Time and work allotment should be there.

I am sorry to comment about.

This is to be noted for ever and all.

Shah D J

On Saturday, 31 January 2015 10:01 AM, "gujratibk@yahoo.in [ICAI_CIRC_MEERUT_CA]" <ICAI_CIRC_MEERUT_CA@yahoogroups.com> wrote:

Sir all you are absolutely right, but in case of Statutory Branch Audit time is so scared and you have to audit 2-3 Branches with in 10-12 days , how it is possible if 70% or more branches audited by proprietary concern. RBI has also think this angle also.

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[aaykarbhavan] Re: {Amresh's CA's} Re: {Amresh's CA's} Re: {Amresh's CA's} Re: [Thane CAs] RBI on Bank Auditors:If RBI inspectors can identify fraud,why banks' auditors not?:RBI Comments on Bank Auditors

Dearest Shri Annaji,

Wi8th Due respect to you I submit that the Time duration and Fees are not and never comparable with and compensated to .

One should work diligently and with every care only.

If it is considered all the time then one should be out for commercially , or else should ask for more fees. Like Big 4... The come out with huge compensation , if report is turned out at any time.!!! May be compensated by Insurance Company.

If not done , there is no Professional Ethics, principles and all and everything.

Image of our profession would get diminished to 00000000000!!!!!!!!!!

Regards,

Shah D J

]

On Saturday, 31 January 2015 10:16 AM, "Ramachandran Mahadevan ramachandran.mahadevan@gmail.com [ICAI_CIRC_MEERUT_CA]" <ICAI_CIRC_MEERUT_CA@yahoogroups.com> wrote:

Yes.
Regular financial audit certification itself is
Becoming difficult.
Fraud identification cannot be done
Considering the payment and time.

Ramachandran M

Sent from my iPad

On Jan 31, 2015, at 19:50, "gujratibk@yahoo.in [ICAI_CIRC_MEERUT_CA]"<ICAI_CIRC_MEERUT_CA@yahoogroups.com> wrote:

Sir all you are absolutely right, but in case of Statutory Branch Audit time is so scared and you have to audit 2-3 Branches with in 10-12 days , how it is possible if 70% or more branches audited by proprietary concern. RBI has also think this angle also.

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Posted by: Dipak Shah <djshah1944@yahoo.com>

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[aaykarbhavan] Re: {Amresh's CA's} First Leasing: RBI, internal auditors did not flag any wrongdoing, says auditor | Business Line

Dear Annaji,

All goes together . Nobody can blame others. At every stage one should work as professionals. Unlike , just now said by R B I , on points of Bank Audits? C A are failed and R B I Investigators get success.

At every year Auditors should look for back years and also see the ways and means and way of working in every matter fully. For all these years it can not failed!!!!

It is 2000 to 2014!!!!

Take the case of Ratnamani Engineering Limited in 31.03.1994 !! The same Auditor Reported in Tax Audit Report the income shown as Real income and allowed Company to pay dividend out of mere book entry of profit !!! At the same time in Tax Audit Report the same mere book entry of profit was deleted as Profit Taxable under Income Tax !!!

In the same way in another Company well known big name cultured name benind, Rs 300 crore loss was wiped out by mere book entry of profit of Rs 325 Crores by transfer of assets Holding company to subsidiary company.!!!!!!!!!!!

Such bad practices will be out shortly when I will file a petition in CLB for Members as a Right to see and inspect the Tax Audit Report along with Published accounts are sent to shareholders and right to have Tax Audit report. This will restrict the Bad Practices by Companies.

The defense point taken is surprising !!!!

Regards,

Shah D J

On Thursday, 29 January 2015 4:05 AM, "Ramachandran Mahadevan ramachandran.mahadevan@gmail.com [ICAI_CIRC_MEERUT_CA]" <ICAI_CIRC_MEERUT_CA@yahoogroups.com> wrote:

http://www.thehindubusinessline.com/companies/first-leasing-auditors-blame-rbi/article6830485.ece

Sent from my iPad

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[aaykarbhavan] Judgments and Information [3 Attachments]

A Co. isn't entitled to deduction of interest under sec. 24(b) as it can't utilize properties for 'own residence'

January 30, 2015[2015] 53 taxmann.com 310 (Mumbai - Trib.)

IT: Even where assessee-company had paid interest on borrowed fund, deduction under section 24(b) could not be allowable as such provision is applicable only to self occupied properties

Trader has commenced its business when it got registration of shop, appointed employees and opened bank account

January 30, 2015[2015] 53 taxmann.com 289 (Delhi)/[2015] 228 Taxman 261 (Delhi)(MAG.)/[2014] 368 ITR 692 (Delhi)

IT: Where assessee-company had rented out office premises, opened bank account, appointed employees and got registered under Shop & Establishment Act, business of assessee could be said to have been set up and expenditure incurred thereafter were allowable as revenue expenditure

AO can make additions on issues not included in reasons recorded that come to his notice in course of reassessment

January 30, 2015[2014] 52 taxmann.com 51 (Punjab & Haryana)/[2014] 367 ITR 769 (Punjab & Haryana)

IT : In view of Explanation 3 to section 147, Assessing Officer is empowered to make addition even on ground on which reassessment notice might not have been issued

Confessional statement doesn't have evidentiary value in absence of incriminating material found during search

January 30, 2015[2015] 53 taxmann.com 306 (Andhra Pradesh)/[2014] 369 ITR 171 (Andhra Pradesh)

IT : Where in absence of any incriminating material etc., found from premises of assessee during course of search, statement of assessee recorded under section 132(4) would not have any evidentiary value;

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[aaykarbhavan] Re: {Amresh's CA's} Re: {Amresh's CA's} Re: [Thane CAs] RBI on Bank Auditors:If RBI inspectors can identify fraud,why banks' auditors not?:RBI Comments on Bank Auditors

Dear Annaji,

Thanks for Comments.

I would add something. During the course of our education , we were given Subject of Essay of any thing , During B Com Graduation also we were taught Audit Programs . What is that ? It give you a touch of midas inherently . You are given time to think properly. All backgrounds are being kept alive in your mind. That is what required at every step in out Audit field. Every day is a new day while and during conducting the Audit .

Every minute you are always student. You have to learn from all side .

This also reminds me of my First Audit of Bank Audit after Nationalization of Banks. We had to conduct three Branches . we started Auditing from a small Branch , to little high big branch and then Local head Branch where every segment of Banking transaction was covered. This raised to Audit each and every aspect of Bank Audit. It should be accepted as a challenge. If you do not know any thing ask the other person in the organization and learn how to take it in Audit Steps. You will be absolutely a master in that subject in the meantime.

How to apply our education and experience in life this is most important at every step.

God Bless You.

Regards,

Shah D J

On Saturday, 31 January 2015 4:07 AM, "Ramachandran Mahadevan ramachandran.mahadevan@gmail.com [ICAI_CIRC_MEERUT_CA]" <ICAI_CIRC_MEERUT_CA@yahoogroups.com> wrote:

The external auditor provides an opinion on a company's annual fi nancial statements and, in many cases, an opinion on the effectiveness of the entity's internal control over fi nancial reporting. External auditors are engaged by and report directly to the audit committee, but have regular contact with management across a company's operations. While not a component of a company's system of internal control over fi nancial reporting, the accumulated general knowledge external auditors bring from working across multiple organizations can be a resource for boards, management, and audit committees. Professional standards require the external auditor at a minimum to understand the company's system of internal control over fi nancial reporting as part of its risk assessment process during the planning of a fi nancial statement audit. This includes consideration of the company's tone at the top and corporate culture, and incentives or pressures that may drive an employee to commit fi nancial reporting fraud. When developing the audit plan, the auditor should consider such factors as management's philosophy and operating style (including the integrity and ethical values practiced by management), the nature of the board and audit committee's oversight, and the company's human resource policies and practices, with a particular focus on its compensation arrangements. Auditing standards require external auditors to exercise "professional skepticism," which means they need to be alert for information suggesting material misstatements of fi nancial statements, and to be critical when evaluating audit evidence. Auditing standards defi ne professional skepticism as "an attitude that includes a questioning mind and a critical assessment of audit evidence."3 External auditors must apply professional skepticism when considering the risk that management may override internal controls, and take that risk into account when formulating judgments about the nature, timing, and extent of audit testing. External auditors should also be aware of judgment biases that can affect the exercise of an effective level of professional skepticism in the conduct of the audit.

Source ANTI FRAUD COLLABORATION REPORT JANUARY 2015

On Fri, Jan 30, 2015 at 12:39 AM, Dipak Shah djshah1944@yahoo.com [ICAI_CIRC_MEERUT_CA] <ICAI_CIRC_MEERUT_CA@yahoogroups.com> wrote:

Dearest Shafi saab,
                           I have full respect to you.
I would say it depends upon the persons perceptions, intelligence, knowledge to grasp the situation , banking environment , Banking Experience and also skills .
This reminds me of my own experience in two Organization when I joined , on the same date within 1 hour or so I found fraud in the books of account!!!!!!!
I had never gone through the Books of account. It was only interrogation with the employees only!!!
In one case Cash embezzlement by Accountant , debtors realization was done well back 5 years, outstanding for years !!! The transaction wise in the Fisheries Market, like Matka Bazar etc. There is no gone a way by any merchant like bookie!! All the merchants pay the money on due date only. No delay in making payment !!!!
Second case was cash embezzlement for last more than one year. There were no transaction when actual cash was counted. Cashier was given sufficient time to adjust the Cash in the meantime. One week was given by indication of suspicion .!!
This fact was not known to the Higher Management at all for years !!!
Even it was handled during all the period of earlier with under the CA also!!!
When professional enters in the Filed he should be at least fully conversant as Professional only and fully.
With due all care if the things are taken with fully as professional and expert every thing is possible.
                This also reminds me of one case of End utilization of Banking funds. I went through Records of Physical Inventory , books , stock statement and all. Then I found the stock was submitted very over than it was. Machinery purchased was used for Stock Statement submission!!! There was a recovery of Rs 135000 for over drawal!!! Bank pays us the money , fees. It should always be a relevant but not measured correctly in terms of time and Fees equally. Fees were Rs 35000 / time I spent was Just Five days!!!! But should work as professionally , completely.
In the same way I found Fraud in accounts of Ratnamani Engineering Limited 31.03.1994 without going through the actual books of account!!! All You Know.
With due regards to Shafi Saab,
Shah D J

On Thursday, 29 January 2015 6:08 AM, "mohamed shafi shafi78647@yahoo.com [ICAI_CIRC_MEERUT_CA]" <ICAI_CIRC_MEERUT_CA@yahoogroups.com> wrote:

RBI Dy, Governor S s Mundra said....

" if RBI inspectors are able to identify these divergences in the limited time-frame  that they are on-site, why the banks' auditors are not able to do so…Is it a question of efficiency of the auditors or is there a much deeper issue - something to do with the transparency of the process itself?," he asked while addressing members of the Audit Committee of the Boards (ACB) of ICICI Bank subsidiaries & other bank employees."

What is the limited time frame for RBI inspectors ???

"limited time period" c is very vague term

Mohamed Shafi

From: "Nitesh More moreassociate@gmail.com [ThaneCAs]" <ThaneCAs@yahoogroups.com>
To: ThaneCAs@yahoogroups.com
Sent: Wednesday, 28 January 2015 10:03 AM
Subject: [Thane CAs] RBI on Bank Auditors:If RBI inspectors can identify fraud,why banks' auditors not?:RBI Comments on Bank Auditors [1 Attachment]

[Attachment(s) from Nitesh More moreassociate@gmail.com [ThaneCAs] included below]

If RBI inspectors identify fraud in limited time,why banks' auditors not?:RBI Comments on Bank Auditors

Pointing to the gaps in the auditors' work, the Reserve Bank of India (RBI) has asked banks to adopt a more stringent auditing process to ensure that review of financial results and identification of fraud is done more promptly.

RBI Deputy Governor S S Mundra said there is a greater need to take a closer look into the asset quality, instances of restructuring of advances, provisioning held, etc. to ensure that there was no divergence with regard to asset classifications and provisions held.

"The point I am trying to make is that
if RBI inspectors are able to identify these divergences in the limited time-frame that they are on-site, why the banks' auditors are not able to do so…Is it a question of efficiency of the auditors or is there a much deeper issue - something to do with the transparency of the process itself?," he asked while addressing members of the Audit Committee of the Boards (ACB) of ICICI Bank subsidiaries & other bank employees.

With regards to provisions, he told banks that adequate provisions should be made for post-retirement benefits like pension, gratuity and leave encashment, etc. and the auditors should ask more pertinent questions to the banks with regards to provisioning requirements

"It is important that the ACB asks the right questions to the management about various underlying assumptions that go into computation of the required provisions such as life expectancy, discount rate, expected return on investments, etc. I urge the ACBs to ask uncomfortable questions," he said in his speech.

In light of instances of know-your-customer (KYC) norms violation Mundra has urged auditors to be stricter with the process of background check. Last month, RBI had imposed penalties on ICICI Bank and Bank of Baroda for flouting KYC and anti money laundering norms.

"I believe that the absence of an appropriate punitive mechanism in the banks for lapses has also contributed to their recurrence. Therefore, our expectations from the ACBs would be to closely focus on reasons for such regulatory penalties/sanctions and seek a root-cause analysis for preventing recurrence," he added.

RBI has also been cautioning consumers against the rising case of credit card and other frauds. Mundra called upon greater sensitivity and increased focus from auditors with regards to having appropriate measures in place to prevent instances of fraud.

"In our recently concluded scrutiny into fixed deposit related frauds in some banks, it emerged that even the caution advices issued by RBI in respect of certain individuals had not percolated down to the branch officials quickly enough to enable appropriate preventive measures… I would say that ACBs should take upon themselves to monitor the trend of frauds, assimilate key learnings and ensure that mitigation measures are put in place by the management," he added.

Source: BS

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[aaykarbhavan] Judgments and Infomration [5 Attachments]

Disclosures of Shareholding and Control under SEBI (Substantial Acquisition of Shares and Takeovers) Regulations 2011-The intent behind the disclosure regime is not only to ensure that the target company is not taken by surprise but also to ensure that the price discovery in the market for the shares of the target company takes place in an informed manner

PFA

This Article contains the procedure for change in Object clause of the Company Under Companies Act, 2013 with detailed documentation required.

PFA

Audit of accounts of certain persons carrying on business or profession The purpose of Tax Audit is to ensure that books of Accounts have been maintained in accordance with the provisions of the Income Tax Act. Tax Audit also ensures that the Accounts are properly being presented to the Assessing Officers when called for. However […]

PFA

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[aaykarbhavan] Judgments and Infomration [3 Attachments]

Draft Scheme for Channelizing Black Money India needs Infrastructure development in a big way. Any amount of foreign investment will not be sufficient for the infrastructure development India need and that too in a rapid phase. No person is without tension in safeguarding the money earned through dubious means and 60 to 75% of the […]

PFA

Now, vide public notice no. 83, dated 30th Jan'15, it has been notified that the e-application for IEC shall be mandatory from 1st Feb'15. However, at the same time, DGFT has notified following banks with whom net banking facility needs to be accessed for online application of IEC: PUBLIC NOTICE NO. 83 (RE)2013/2009-14,

Online application for IEC Registration Mandatory from 1st Feb'15

Posted by CA Sandeep Kanoi

CA Sumit Grover

In Nov'14, vide public notice no. 76, DGFT had made e-application for IEC(Import Export Code) mandatory from 1st Jan'15 onwards. However, in Jan'15, vide public notice no. 80, the same was kept in abeyance till further notified date.

Now, vide public notice no. 83, dated 30th Jan'15, it has been notified that the e-application for IEC shall be mandatory from 1st Feb'15.

However, at the same time, DGFT has notified following banks with whom net banking facility needs to be accessed for online application of IEC:

HDFC Bank;
ICICI Bank;
Bank of India;
State Bank of India;
Central Bank of India;
Punjab National Bank;
IDBI;
Axis Bank;
Union Bank of India;
Oriental Bank of Commerce

The applicants, who don't have the net banking facility with any of the aforesaid banks may continue to apply IEC physically till any further date is notified for such category of applicants.

Related Public Notice is as follows :-

GOVERNMENT OF INDIA
MINISTRY OF COMMERCE & INDUSTRY
DEPARTMENT OF COMMERCE
DIRECTORATE GENERAL OF FOREIGN TRADE

PUBLIC NOTICE NO. 83 (RE)2013/2009-14,

Dated: January 30, 2015

Subject: Online IEC applications: Operationalisation of the Public Notice No. 76 dated 27/11/2014.

The operationalisation of the mandatory system of online applications for IEC with effect from 01/01/2015 was notified vide Public Notice 76 dated 27/11/2014. This was, however, kept in abeyance vide Public Notice No. 80 dated 6.1.2015.

2. Now, in exercise of powers conferred under paragraph 2.4 of the Foreign Trade Policy (2009-2014), the Director General of Foreign Trade hereby notifies operationalisation of the new system of applications for online IEC with effect from 01/02/2015. Applicants having access to net-banking facility with the following ten notified banks, namely, i) HDFC Bank; ii) ICICI Bank; iii) Bank of India; iv) State Bank of India; v) Central Bank of India; vi) Punjab National Bank; vii) IDBI; viii) Axis Bank; ix) Union Bank of India; x) Oriental Bank of Commerce, can apply online in the format notified vide Public Notice No. 76 (RE-2013), dated 27/11/2014 as per detailed guidelines laid down in Public Notice No.79 dated 31/12/2014.

3. Applicants who do not have access to net banking through the above banks can submit manual applications for IEC as before (existing prior to 01/02/2015), in physical form in the existing format (ANF-2A) and procedure with documents as prescribed therein, until further notice.

4. Effect of this Public Notice: The new system of online applications for IEC as per the Public Notice No. 76 (RE-2013)/2009-2014 dated the 27th November, 2014 will be operationalized with effect from 01/02/2015. The facility of submission of application in manual mode will, however, continue for those applicants who do not have access to net banking facility with the ten notified banks, as listed in Para 2 above. Applicants, applying for IEC in manual mode, may utilise the existing format (ANF 2A, as existing prior to 01/02/2015) and procedure to submit applications to RA's office with documents as prescribed therein.

[F.No.01/93/180/20/AM-13/ PC-2(B)]

(Pravir Kumar)
Director General of Foreign Trade

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The Project marks a major step in ensuring TDS compliance through the processing of TDS returns and comprehensive data processing of TDS statements using technology driven end-to-end processes. At present 15 Lakh deductors and 2.5 crore tax payers are using various e-enabled online services through the CPC (TDS).

Gold award for Income Tax Department under National Award on E-Governance 2014-15

Posted In DGFT, Income Tax | News | 2 Comments »

The Income Tax Department has been awarded GOLD by the Government of India under category "Cat-I-Excellence in Government Process Re-engineering" for National Award on e-governance 2014-15. The award has been conferred for "TDS Reconciliation Analysis & Correction Enabling System (TRACES)" project launched by the Department.

The award was presented today during the 18th National Conference on e-governance held at Mahatma Mandir, Gandhinagar, Gujarat.

This third award on e-governance to the Income Tax Department in the last 5 years speaks volumes about the commitment of the Department to e-governance and to move towards a non-adversarial and tax-payer friendly regime.

- See more at: http://taxguru.in/income-tax/gold-award-income-tax-department-national-award-egovernance-201415.html#sthash.lKOkrQig.dpuf

The Companies incorporated under the Indian Company Law are required to frame different Policies/ maintain systems/ plans and devise Codes of/ for the Company/ Board of Directors and Senior Management Personnel/ Directors and Employees etc. pursuant to the provisions of the Companies Act, 2013 and other corporate laws.

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