Wednesday, 29 February 2012

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In terms of regulation 46 (2) of  The Company Secretaries Regulations, 1982, as in force, a candidate can seek ‘Verification of Marks’ in any subject(s) of  December , 2011 examination within one month from the date of  declaration of results.  The application for verification of marks should be made by interested candidates in the prescribed form given below, in candidate’s own handwriting together with  requisite fee @ Rs.100/- per subject within one month from the date of  declaration of results, i.e., upto and including 26th March, 2012 (25th    March, 2012 being Holiday).   
            The application for verification of marks duly completed in all respects should reach on or before the last date,  addressed to The Joint Director (Exams.), The Institute of Company Secretaries of India, C-37, Institutional Area, Sector 62, NOIDA – 201309 (U.P.). Candidates are advised not to club any other query/matter or remittance of fees along with his/her request for Verification of Marks to facilitate an early reply. 
            The response time to candidates’ requests for verification of marks is normally  3-4 weeks from the date of receipt of their applications in the Examination Deptt. of the Institute. After completion of verification process, outcome of the verification of marks is hosted on the Institute’s website: and the candidate concerned by entering his/her Roll No. or Student Registration Number can enquire about the status/outcome of his/her application. The candidates concerned are also individually informed about the outcome of their requests by post.  However, if a candidate does not receive any communication by 10th May , 2012, he/she should write to the Joint Director (Exams.) giving relevant details – (i) his/her name; (ii) student registration number and Roll Number; (iii) stage and module(s) of examination (iv) name of the subject(s) in which verification of marks was sought; (v) date of application and mode of  its dispatch;  (vi) amount of verification fee and mode of its remittance, viz., Bank Draft No., date of issue of Bank Draft, Name of drawee bank; (vii) complete postal address along with PIN Code;  (viii) e-mail id; and (ix) Mobile/ Telephone Number.

Tuesday, 28 February 2012

Income Tax Case Laws for the year 2011

Income Tax Case Laws for the year 2011

1. Geetanjali University Trust V. Chief Commissioner of Income Tax – High Court
Exemption under 12A - Trust providing Education - Admission was not on merit basis and entrance exam - Held That:- The purpose of education would not be served, if the education is for students who have been illegally admitted. The purpose of education as contemplated in the section would be served only if the students have been legally admitted and not otherwise. The spending of funds on education of students who have been admitted illegally will not amount to application of income for the purpose of education. In the Trust's case, neither the condition regarding existence for the purpose of education nor the application of funds for the objects, are being fulfilled. Decided against assessee. 

2. Director of Income-tax Versus Ericsson A.B. - High Court 

Foreign company – engaged in supply of hardware and software which is used in the business of rendering telecommunication services – validity of notice issued u/s 142 - viability of charging of interest u/s 234A and 234B on the ground that the revenues were liable for tax deduction at source - Revenue contention, assessee having business connection in India and has a permanent establishment in the form of a dependent agent establishment – income from licensing of software amounted to receipt of royalty – Held that:- Finance Act, 2006, the Legislature has added proviso in Section 142 (i) of the Act. The effect thereof is that an assessment framed pursuant to a notice issued under Section 142 after the end of the assessment year would also be valid. Regarding levy of interest charged u/s 234B it is held that levy of interest was not justified, inasmuch as the assessee had no obligation to pay any advance tax as tax was deductible at source on its income that was chargeable to tax in India.

The place of negotiation, the place of signing of agreement, or formal acceptance thereof or overall responsibility of the assessee is irrelevant circumstances. Since the transaction relates to the sale of goods, the relevant factor and determinative factor would be as to where the property in the goods passes. In the present case, the goods were manufactured outside India and even the sale has taken place outside India. Thereby, no part of the income accrued to the assessee in India. The terms of the contract make it clear that the acceptance test is not a material event for the passing of the title and risk in the equipment supplied. It is further held that payment received by the assessee was towards the title and GSM system of which software was an inseparable parts incapable of independent use and it was a contract for supply of goods. Therefore, no part of the payment therefore can be classified as payment towardsroyalty.

The assessee together with supply of hardware and software has to over-see installation thereof to ensure that it was carried out to the satisfaction of Indian buyer in accordance with the terms of the contract. It is clear that under the Supply Contract, the assessee has not earned any income in India through or from any business connection. Because the installation contractor is a subsidiary of the assessee holding company would not, by itself, give rise to a business connection. Therefore, assessee did not have any business connection in India. In view of this, it is not necessary to go into the issue whether the assessee had any Permanent Establishment in India or not during the relevant period in India or not.- Decided in favor of assessee.


Profits chargeable to tax - advances not repaid for long time held as cessation of liability – liability to the creditors continues to be shown in the assessee’s books of accounts - Held that:- Unpaid liabilities cannot be added as the assessee’s income under Section 41(1) merely because they remained unpaid for a sufficiently long time and that it is required of the revenue authorities to show that the liability to pay the creditors has ceased or has been remitted by the creditors. -Decided in favor of assessee.


Addition on account of non-genuine creditors u/s 41(1) - scope of section 41(1) - remission or cessation of a trading liability. - outstanding amount for more than 4 years - held that:- In CIT v. Sugauli Sugar Works (P) Ltd. (1999 -TMI - 5715 - SUPREME Court), honorable apex court ruled that a unilateral action cannot bring about a cessation or remission of the liability because a remission can be granted only by the creditor and a cessation of the liability can only occur either by reason of operation of law or the debtor unequivocally declaring his intention not to honour his liability when payment is demanded by the creditor, or by a contract between the parties, or by discharge of the debt. - Decided in favor of assessee.

Difference between scope of section 28(iv) and 41(1) - benefit enjoyed by the assessee by utilizing the amounts payable to the sundry creditors in its own business - held that:- It is a well settled rule of interpretation of statutes that a construction that reduces one of the two provisions in a statute to a useless lumber or a dead letter would not amount to a harmonious construction and that a familiar approach in such cases is to find out which one of the two provisions is a special provision made to govern a certain situation and to exclude that situation from the applicability of the general provision. If we apply this rule of interpretation to the case before us, we must necessarily hold that while Section 28(iv) would apply generally to all benefits or perquisites which arise to the assessee from the business carried on by him, the benefit which he obtains by way of remission or cessation of a trading liability in a later year, in respect of which he has obtained a deduction in an earlier year in computing the business income, should be governed by Section 41(1) which is the specific provision governing the factual situation and not by Section 28(iv). - Decided in favor of assessee.

5. CIT Versus EAGLE THEATRES - High Court 

Capital gains – cinema hall being sold - reduction of valuation of scrap - inclusion of amount paid to the tenant/licensee for vacation for computation capital gains - direction of remit on the question of payment made to employees on closure of the cinema hall – Held that:- In view of the fact that the A.O. did not himself make any factual analysis or study or state the basis for computing the scrap/salvage value, order passed by the tribunal for the reduction in such valuation is not interfered. Regarding payment to tenant/licensee for vacation of property, payment made by the assessee for vacancy of the property had a link with the sale of property and, therefore, was entitled for set off against sale consideration.In respect of payment to the employees, the order of remitting the file back to A.O. passed by the tribunal is justified.- Decided against the Revenue.

6. Nuclear Power Corporation of India Ltd., In re - Advance Ruling Authority 

Admission of application for advance ruling - Scope of section 44BBB - Offshore Supply Contracts with ASE - the equipments and materials were to be sold outside India and the payments were also made outside India. - No one connected with ASE who was present in India was involved in the activities associated with the offshore supply of such goods. - Held that:- Since the question whether the payment made under the transaction was chargeable to tax under the Act was pending before the authorities under the Act arising out of an assessment against ASE, before the applicant approached this Authority the allowing of this application under Section 245R(2) of the Act is barred. - Application rejected.

7. Shell Technology India (P.) Ltd., In re - Advance Ruling Authority 

Fees for technical services - Double Taxation Avoidance Convention (DTAC) between India and Netherlands - payment made to SSSABV for business support services. - The services include invoice processing, monitoring operational execution, SOX (Business Controls - Board) and goods receipts/invoice receipts and other services relating to accounts payable/receivable. It also includes general accounting and credit management - held that:- the consideration paid for the financial services received by the applicant is not in the nature of fees for technical services within the meaning of Article 12.5(b) of the DTAC between India and the Netherlands. Since there was no contention that SSSABV had a permanent establishment in India in terms of Article 5 of the DTAC between India and Netherlands, on question No. (ii) we rule that the payment received by SSSABV is not chargeable to tax in India. Since there is no liability to tax in India we rule on question No.(iii) that the applicant has no obligation to withhold tax under section 195 of the Income-tax Act.
8. Commissioner of Income-tax Versus Lovlesh Jain - High Court
Exemption u/s 10A/10B - conversion of standard gold into ornaments is "manufacture" or "production" of articles or things – Revenue contention -assessee had not "exported" gold ornaments as ownership does not lie with him - Held that:- Whether or not assessee's activity was manufacture or not, was independent of the question of ownership of the gold. In present case the primary gold was put to mechanical, physical and chemical process before it was converted into gold jewelery. Such conversion of standard gold into ornaments or jewelery undertaken by the assessee amounts to manufacture/production and qualifies for deduction under Section 10A/10B of the Act, if other conditions stipulated in the said Section are duly satisfied.

Mere ownership is not the sole criteria to determine whether a person is an importer or exporter. A person who holds himself out as an importer or exporter is also an importer or exporter. The activity undertaken i.e. export/import is important and the person involved and associated with the said activity is important/relevant. Further the expression 'exported' or 'imported' goods has reference to the nature of the goods as in the case of expressions 'import' or 'export', and not a person/owner.-Decided in favor of the assessee.

9. CIT Versus GALILEO INDIA PVT LTD - High Court 

Dis-allowance of expenditure u/s 14A of the Act - depreciation on computer software, peripherals @ 60% without considering whether assets were used for more than 180 days- Held that:- Rule 8D has been held to be prospective in nature and applicable from assessment year 2008-09 by High Court in Maxopp Investment Ltd. v. CIT, New Delhi . However, in the said decision it has been observed that direct and indirect expenses have to be disallowed u/s 14A, when an assessee earns exempt income. In the present case no dis-allowance was made u/s 14A further, Assessing Officer had not examined whether the computer peripherals were used for more than 180 days or not. Under these observations A.O. is directed to pass fresh order. -Decided in favor of Revenue

10. Institute of Self Management Versus Commissioner of Income tax-I, Madurai - Tribunal 

Delay in filing of application for registration under section 12AA - charitable institution - held that:- The assessee society being an artificial juridical person, it cannot suo motu think or act. It thinks through its trustees. It is seen from the order of the Commissioner of Income-tax that the secretary of the assessee society himself is a lawyer. It is also seen that the assessee society is availing the services of chartered accountants. When this is the case, we are of the view that the theory of ignorance of law propounded by the assessee trust falls down. - the assessee is not entitled for retrospective registration. - Decided against the assessee.


Exemption u/s 10(23C) – Prescribed authority denied approval/ exemption - petitioner has to satisfy that it came within the expression “other educational institution” - Held that:- Merely on the ground that petitioner is not recognized by the UGC or any Board constituted by the Government of India for imparting formal education in the field of western music and that petitioner is not itself awarding any certificate or degree to the students, it cannot be said that it does not qualify to be an educational institution”. It is observed that the word education connotes the process of training and development of knowledge, skill, mind and character of students by normal schooling hence, petitioner meets the requirements of an educational institution within the meaning of Section 10(23)(c)(vi) of the Act. Therefore, the prescribed authority is guided to deal with the assessee’s application for approval afresh in accordance with law in the light of the observations made. The writ petition is accordingly allowed.


Dis-allowance of expenses incurred claimed by assessee for the purposes of the hotel business – part of property under agreement with hotelier being used as a hotel for consideration – consideration treated as business income - Held that:- Agreement between the parties did not contain a stipulation for the incurring of the expenditure by the assesse, moreover no evidence/material were placed on record in form of any communication or confirmation by Hotelier that assessee had incurred expenditure, which was relevant for maintenance and running of the said hotel. Further no evidence are produced to show that assessee had incurred any expenses to earn and for purpose of business. -Decided against the assessee. 


Deduction u/s 80HHC – setting off of aggregate brought forward losses of amalgamating company from both export and non-export activities in determining “profit of the business” for computing deduction – Held that:- Section 80AB makes it clear that the computation of income has to be in accordance with the provisions of the Act. Not only profits but also losses have to be taken into consideration. Expression “profit” occurring in Section 80HHC means a positive profit. To arrive at a net figure of positive profits, losses from export as well as non-export activities are to be taken into consideration. See IPCA Laboratories Ltd Vs. DCIT (2004 - TMI - 6141 - Supreme court). Decided against the assessee.


Dis-allowance of provision of liability made for expenditure to be incurred in removal of encroachments in and around the technical area of the Airport - capital expenditure or revenue expenditure - Treatment of the proforma invoices issued on government agencies for space provided in Airport as income – Mercantile system of accounting - Held that:- It is not in dispute that the land belongs to the assessee. In the schemes formulated by the Government for removal of these encroachers and rehabilitate them at other places, if the assessee had paid the amount that amount is not for acquisition of new assets. The payment was made to facilitate its smooth functioning of the business. Therefor, expenditure is revenue in nature. See Bikaner Gypsums Ltd vs CIT (1990 - TMI - 5308 - Supreme Court).-Decided in favor of assessee.

In respect of the Government Agencies on the application of “real income” theory and taking a realistic view, it is held that no income has accrued merely because proforma advices were raised, that too, at the instance of the CAG of India since these departments have their offices to facilitate the functioning of the assessee and they do not agree to pay any licence fee of the space occupied by them. The matter is restored back to A.O. determine the taxability of proforma invoices in respect of those parties who have been remitting part payments and have accepted their liability and not in respect of those Government Agencies who have never paid any amount.-Decided partly in favor of assessee.


TDS u/s 194J or 195 - global management services and VSAT uplinking - reimbursement of the expenses - held that:- The ITAT found that in respect of assessment years 2001-02 and 2003-04, similar appeal of the revenue had been dismissed holding that no such tax at source was deductible and the provisions of Section 40(a)(i) of the Act were not attracted. - this is the view already taken by this Court in the case of this very assessee affirming the earlier decision of the Tribunal (2008 -TMI - 65399 - ITAT DELHI-F) and we see no reason to deviate from the same. 


Voluntary Retirement Scheme (VRS) u/s 35DDA - assessee company had paid certain additional benefits also alongwith VRS - AO arrived at a conclusion that the scheme floated by the assessee was not in conformity with Rule 2BA of the Income Tax Rules and, therefore, benefit of Section 10(10C) was not available. Since Section 10(10C) was not available, the assessee was liable to deduct the tax at source on the payments made to the employees. - Held that:- The factual position which emerges from the aforesaid discussion is that (a) in the assessment orders passed in the case of employees, the Department accepted that the employees were entitled to the benefit of Section 10(10C) of the Act; (b) as per the judgment of Gujarat High Court in Arunkumar T. Makwana Versus Income-Tax Officer. (2006 -TMI - 9895 - GUJARAT High Court), merely because payment of more than Rs. 5 lakhs is made would not mean that the schemes are not in conformity with Rule 2BA and the provisions of Section 10(10A) of the Act; (c) wherever any payment is made in excess of Rs. 5 lakhs and payments made in regard to early bird incentives, the tax has been deducted by the company on such payments made and that tax is paid to the Government. - Assessee can not be treated as 'assessee-in-default' having regard to the principles laid down by this Court in Nestle India Pvt. Ltd. (2000 -TMI - 15273 - DELHI High Court)

17. Suresh Kumar D. Shah Versus Deputy Commissioner of Income-tax, Central Circle-2 - Tribunal 

Capital gains - Nature of land - agriculture land or not - held that:- There was no evidence regarding carrying out the agricultural operations in the impugned land. In the absence of evidence that it was put to agricultural use by the assessee and the land was actually cultivated till the sale of the land, we are not in a position to hold that the land is an agricultural land. In our opinion, the sale of the land for non agricultural purpose and the land was not subject to cultivation before sale, we have to draw conclusion that the sale of land cannot be considered as sale of agricultural land. In the circumstances, we have to hold that the sale of land is not sale of agricultural land and it is to be considered as capital asset and on that sale, capital gain is chargeable.

Whether land development agreement is transfer u/s 2(47) read with S.53A of the Transfer of Property Act, 1882 - held that:- the owners have entered into an agreement for development of the property and certain rights were assigned to the developer who in turn had made the substantial payment and consequently entered into the property and thereafter if the transferee has taken any steps in relation to construction of the flats, then it is to be considered as transfer u/s. 2(47)(v) of the I.T. Act. The fact that the legal ownership continued with the owners to be transferred to the developer at a future distant date really does not affect the applicability of s. 2(47)(v) - Matter restored to the file of CIT(A) to decide the same afresh in light the ratio laid down by the Hon'ble Bombay High Court in the case of Chaturbhuj Dwarkadas Kapadia v. CIT (2003 -TMI - 12097 - BOMBAY High Court)

18. SRL Ranbaxy Ltd. Versus Additional Commissioner of Income-tax, Range-9 - Tribunal 

TDS u/s 194H - Discount versus Commission or brokerage - the business working of the assessee is that it signs agreements with the Collection Centres, on a non-exclusive basis. It is under these agreements, that the Collection Centres avail the professional services of the assessee regarding testing of samples. These Centres operate as authorized Collectors for collecting the samples. - held that:- We hold that (i) there is no Principal-Agent relationship between the assessee and the Collection Centres and that being so, the provisions of section 194H of the Act have been wrongly invoked; (ii) The provisions of section 194H of the Act could, even otherwise, not have been met, since no payment has been shown to have been made by the assessee to the Collection Centres; (iii) The payment made to the assessee by the collection Centres was at the rates agreed to inter se between them; and (iv) The ld. CIT(A) erred in confirming the 'disallowance of Rs. 11,78,24,030 made u/s 40(a)(ia) of the Act for the alleged failure of TDS by the assessee u/s 194H of the Act. - Decided in favor of assessee.

19. Commissioner of Income Tax Versus Integrated Technologies Ltd. - High Court 

Claim for Depericiation - “passive use” of the assets? - Assessee case pending with BIFR , filed ROI and claimed depreciation, bad debts, raw material stock written off and administrative expenses. AO disallowed as no business was carried on during the P/Y year - he observed that since the plant and machinery was not actually used for the purpose of the assessee’s no depreciation was allowable - CIT(A) allowed allowed expenses other than depericiation he took the view that there is no material on record to show that the assessee had completely abandoned its business - Tribunal allowed in assessee favour - Revenue appealed Held That:- In view of - Capital Bus Service Pvt. Ltd. Vs. CIT (1980 - TMI - 36904 - DELHI High Court) and CIT Vs. Refrigeration and Allied Industries Ltd. (2000 -TMI - 14585 - DELHI High Court) it is not necessary that the plant and machinery owned by the assessee should be actually put to use in the relevant accounting year to justify the claim of depreciation and that even if the plant and machinery or other asset is kept ready for use in the assessee’s business, the assessee would be entitled to depreciation. The only condition is that the business should not have been closed down once for all and that the assessee should demonstrate that the hopes of the business being revived are alive and real. It is however not a matter that can turn entirely on the assessee’s hopes alone. - There should be evidence or material to show that the assessee took efforts to keep the business alive in the hope of reviving the same. Thus no substansial question of law arises. - Decided against the revenue.


Block assessment - Additions on account of undisclosed investment - rate of gross profit - held that:- The Assessing Officer had made addition of Rs. 7,53,953/- on account of investment made in purchase of undisclosed stock. For the assessment year 1996-97 the Assessing Officer observed that the assessee had purchased undisclosed stock of more than Rs.2.75 crores but the addition as noticed above was of Rs. 7,53,953/- only. For the same year the assessee as per regular books of accounts had made purchase of Rs. 30,83,342/- but the Assessing Officer had taken undisclosed investment for making regularly recorded purchases at Rs. 5,16,460/-. The difference is apparent. This discrepancy in the order of Assessing Officer cannot be explained. Further the Assessing Officer has accepted the stand of the respondent that the cassettes were supplied on credit and sales were made in cash, to reduce the element of investment. - With regard to the GP rate, the Assessing Officer in the assessment order had recorded that comparable GP in the similar trades was Rs.2.5%. It is noticeable that no details or particular other dealer were, stated. How the Assessing Officer got this figure is difficult to fathom. It is quite clear that respondent was not in a position to make heavy investments as the GP rate was very low. - Deletion of addition of Rs. 2,46,047/- justified.

21. The Commissioner of Income Tax Versus M/s.Prem Electric Conductors Pvt. Ltd. - High Court 

Deemed dividend – assessee received amount from its sister concern in oct 1997 claiming it to be business advance – advance to another sister concern transferred to assessee by book entry - assessee discontinued business from Oct 1997 – Held that:- On request of assessee the matter is remanded back to the CIT(A) with a direction to him to re-consider the matter afresh in the light of the Supreme Court decision in case of Commissioner of Income Tax Vs. Mukundray K. Shah (2007 -TMI - 6556 - SUPREME Court) and without in any way being influenced either by any observation made by him in the earlier order of revision or any observation made by court in this judgment and to pass appropriate orders in accordance with law.

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Wednesday, 22 February 2012

SEBI standardize lot size for IPO propose to list on SME exchange/platform and for secondary market trading on such exchange/platform

CIRCULAR No. CIR/MRD/DSA/06/2012 February 21, 2012
Managing Director / Chief Executive Officer of
Stock Exchanges and their Clearing Houses/Corporations
Dear Sir/Madam,

Sub: Standardized lot size for SME Exchange / Platform

1. SEBI vide circular dated May 18, 2010 prescribed the framework for setting up of a stock exchange/trading platform by a recognized stock exchange having nationwide trading terminals for Small and Medium Enterprises (SMEs).

2. In this regard it has been decided to standardize the lot size for Initial Public Offer proposing to list on SME exchange/platform and for the secondary market trading on such exchange/platform, as given under:

Price Band (in Rs)

           Lot Size (No of shares)
Upto 14
more than 14 upto 18
more than 18 upto 25
more than 25 upto 35
more than 35 upto 50
more than 50 upto 70
more than 70 upto 90
more than 90 upto 120
more than 120 upto 150
more than 150 upto 180
more than 180 upto 250
more than 250 upto 350
more than 350 upto 500
more than 500 upto 600
more than 600 upto 750
More than 750 upto 1000
above 1000

3. At the Initial Public Offer stage the Registrar to Issue in consultation with Merchant Banker/s, Issuer and the Stock Exchange shall ensure to finalize the basis of allotment in minimum lots and in multiples of minimum lot size, as per the above given table. The secondary market trading lot size shall be the same, as shall be the IPO Lot Size at the application/allotment stage, facilitating secondary market trading.

4. At the Initial Public Offering stage if the price band decided, falls within two different price bands than the minimum application lot size shall be decided based on the price band in which the higher price falls into. For example: if the proposed price band is at 24-28 than the Lot size shall be 4000 shares.

5. The lot size shall not be reduced by the exchange to below the initial lot size if the trading price is below the IPO issue price.

6. The Stock Exchanges can review the lot size once in every 6 months / wherever warranted, by giving an advance notice of at least one month to the market. However, as far as possible the stock exchange shall ensure that odd lots are not created.

7. Further, the stock exchanges shall ensure that the lot size shall be the same for a securities traded across the Exchanges.

8. In case of oversubscription, if the option to retain ten percent of the net offer to public for the purpose of making allotment in minimum lots is exercised, then it shall be ensured by the Issuer/Stock Exchanges/ Merchant Bankers that the post issue paid up capital of the issuer does not go beyond Rs.25 crore.

9. All the Stock Exchanges are advised to :
i. make necessary amendments, if any, to the relevant bye laws, rules and regulations for the implementation of the above decision;
ii. disseminate the same on their website for easy access to the issuers and other market participants;
iii. communicate to SEBI, the status of implementation of the provisions of this circular in the Monthly Development Report.

10. This Circular is issued in exercise of the powers conferred under Section 11 (1) of the Securities and Exchange Board of India Act, 1992, read with Section 10 of the Securities Contracts (Regulation) Act, 1956 to protect the interests of investors in securities and to promote the development of, and to regulate the securities market and shall come into effect immediately.

Tuesday, 21 February 2012

SEBI (Issue of Capital and Disclosure Requirements) (Second Amendment) Regulations, 2012 – Amendment in regulations 53, 70 and 93

NOTIFICATION F.No. LAD-NRO/GN/2011-12/35/3186, dated 7-2-2012

In exercise of the powers conferred by section 30 of the Securities and Exchange Board of India Act, 1992 (15 of 1992), the Board hereby makes the following Regulations to further amend the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009, namely:-

1. These Regulations may be called the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) (Second Amendment) Regulations, 2012.
2. They shall come into force on the date of their publication in the Official Gazette.
3. In the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009 -
(i)  in regulation 53,
(1)  in sub-regulation (1)-
 (I)  the words and symbol “if it has outstanding fully or partly convertible debt instruments at the time of making rights issue,” shall be omitted;
(II)  the word “such” shall be omitted;
(III)  after the words “the holders of outstanding” and before the words “convertible debt instruments”, the word “compulsorily” shall be inserted;
(IV)  after the words “convertible debt instruments” and before the words “in proportion to the” the symbols and words “, if any,” shall be inserted;
(2)  in sub-regulation (2)-
 (I)  after the words “The equity shares” and before the words “reserved for the holders”, the word “so” shall be inserted;
 (II) after the words “fully or partially” and before the words “convertible debt instruments”, the word “compulsorily” shall be inserted;
(III)  the word “on” appearing after the words “on the same terms” and before the words “which the equity shares offered”, shall be substituted with the word “at”;
(ii)  in regulation 70, after sub-regulation (3) a new sub-regulation (4) shall be inserted, namely:-
“(4) The provisions of sub-regulation (2) of regulation 72 and sub-regulation (6) of regulation 78 shall not apply to a preferential issue of specified securities where the proposed allottee is a Mutual Fund registered with the Board or Insurance Company registered with Insurance Regulatory and Development Authority. “
(iii)  in regulation 93,
(1)  in sub-regulation (1)-
 (I)  the words and symbol “if it has outstanding fully or partly convertible debt instruments at the time of making the bonus issue,” shall be omitted;
(II)  the word “such” shall be omitted;
(III)  after the words “the holders of outstanding” and before the words “convertible debt instruments”, the word “compulsorily” shall be inserted;
(IV)  after the words “convertible debt instruments” and before the words “in proportion to the” the symbols and words “, if any,” shall be inserted;
(2)  in sub-regulation (2)-
 (I)  after the words “The equity shares” and before the words “reserved for the holders”, the word “so” shall be inserted;
(II)  after the words “fully or partly” and before the words “convertible debt instruments”, the word “compulsorily” shall be inserted;
(III)  the word “on” appearing after the words “or same proportion” and before the words “which the bonus shares”, shall be substituted with the word “at”;

Monday, 20 February 2012

CBDT exempts return-filing for salaried having total income upto Rs 5 lakh

CBDT exempts return-filing for salaried having total income upto Rs 5 lakh

NOTIFICATION NO 9/2012, Dated: February 17, 2012

In exercise of the power conferred by sub-section (IC) of section 139 of the Income-tax Act, 1961 (43 of 1961), the Central Government hereby exempts the following class of persons, subject to the conditions specified hereinafter, from the requirement of furnishing a return of income under sub-section (1) of section 139 for the assessment year 2012-13, namely:-

1. Class of persons.- An Individual whose total income for the relevant assessment year does not exceed five lakh rupees and consists of only income chargeable to income-tax under the following head,-
(A) “Salaries”;
(B) “Income from other sources”, by way of interest from a saving account in a bank, not exceeding ten thousand rupees.
2. Conditions,- The individual referred to in para 1,-
i) has reported to his employer his permanent Account Number (PAN);
ii) has reported to his employer, the incomes mentioned in sub-para (B) of para I and the employer has deducted the tax thereon;
iii) has received a certificate to of tax deduction in Form 16 from his employer which mentions the PAN, details of income and the tax deducted at source and deposited to the credit of the Central Government;
iv) has discharged his total tax liability for the assessment year through tax deduction at source and its deposit by the employer to the Central Government;
v) has no claim of refund of taxes due to him for the income of the assessment year, and
vi) has received salary from only one employer for the assessment year.
3. The exemption from the requirement of furnishing a return of income tax shall not be available where a notice under section 142 (1) or section 148 or section 153A or section 153C of the incometax Act has been issued for filing a return of income for the relevant assessment year.
4. This notification shall come into force from the date its publication in the Official Gazette.
 F.No.225/283/2011-ITA (II)

(Ajay Goyal)
Director (ITA-II)

Friday, 17 February 2012


Date   .........................
Shri    ...........................

Dear Sir,

We hereby give you notice that in bona tide exercise of the power and authority vested in us by virtue of clause ............................... of the Deed of Partnership dated the ................ day of ......................, 2000, we the undersigned being the majority of the partners hereby determine the partnership heretofore subsisting between us and yourself as from the             ................ day of ................ so far as you are concerned and expel you therefrom on the ground that ...............………….

Yours faithfully,

A practical insight to XBRL Efiling

Introduction to XBRL
XBRL (Extensible Business Reporting Language) is another advanced reporting language of the XML family. XBRL ensures that the figures reported to government authorities and other organisation does not remain dormant piece of printed papers but these figures can be used in data analysis.
ICAI took initiative in 2001 for implementation of XBRL as a first step towards Digital data Reporting. Knowing the fact that it would take some time before it gets approval from the ministry. It took 10 yrs for the ministry of corporate affairs to release mandate for filing of annual accounts in XBRL format.
Though this fact must be iterated that the Reserve bank of India has already started  this reporting method for the Indian banks reporting , but nonetheless it was at very miniscule level.
What is MCA Mandate?
The  companies whose  Balance  Sheet  date  is  31.03.2011  or  onwards,  need  to  file  their  financial statements in XBRL provided they qualify the criteria laid as per Ministry’s general Circular 37/2011 dated  07.06.2011.The  following  class  of  companies  have  to  file  the  Financial  Statements  in  XBRL Form from the year 2010-2011:-
  • All  companies  listed  in  India  and  their  subsidiaries  (Subsidiary  of  listed  company  are required to file in XBRL format, irrespective of its paid up capital)
(Note : If A ltd is Listed Company , B (P) Ltd is A’s Subsidiary and C (P) Ltd is B’s Subsidiary , then as per FAQ by MCA all three i.e. A Ltd , B (P) Ltd & C (P) Ltd have to file in XBRL Format only)
  • All companies having a paid up capital of Rs. 5 Crore and above or a Turnover of Rs 100 crores or above. I.e. about 28,000 companies have to file in XBRL format.
There shall be a separate set of Form 23AC (Form for  filing Balance Sheet and other documents with the Registrar)  and  Form  23ACA  (Form  for  filing  Profit  &  Loss  Account  and  other  documents  with  Registrar) available on the MCA portal for filing in XBRL form. Existing Form 23AC and 23ACA shall continue to be there for filing by companies to which XBRL filing is not applicable; and for filing of earlier year’s documents.
Theoretical Aspects of XBRL – To be known before Filing
XBRL can be broadly understood in two separate aspects
  • Taxonomy
  • Instance Document
Taxonomy: In Simplest of words possible, I can define taxonomy as dictionary of accounting elements. This taxonomy is ideal set of elements available with the ministry against which the data of the filer has to be tagged. Revised Taxonomy as released by MCA contains precisely 3,174 elements.
Tagging mechanism will be a process in which the data on physical financial documents will be converted as per available taxonomy. For the purpose of this tagging, XBRL softwares are available in the market. Details can also be obtained from XBRL portal of MCA.
(Note: Taxonomy as released by MCA as of today is compliant with Indian AS and Existing Schedule VI to Companies Act, 1956. As and when IND – AS and Revised Schedule VI comes applicable, the same will be revised and hosted on MCA Portal)
Instance Document: Once the tagging process is complete, the document that will be generated will be a machine readable XBRL document , this document is called as Instance Document.
MCA Taxonomy
MCA Taxonomy contains majorly the following Parts :
  • Elements and their characteristics like the nature of field (text, numeric etc ) , the nature of their balances, period type etc . In totality there are 3,174 elements.
  • Extended Link Base – Extended link base are further groupings of elements and are in totality 57 in number.
  • Presentation Link Base – Detailing of Extended Link Base.
  • Calculations
  • Labels
Mapping Process – A Lucid step by Step process
Step 1
Map or tag the company’s financial statements to the published taxonomy. This can be done by following methods.
  • Certain  ERP systems may have inbuilt feature to tag the financials to the published taxonomy of MCA
  • XBRL Softwares.
Detailed list of software vendors can be obtained from
It must be noted that MCA does not recommends/associates with these vendors. It has been hosted just for public Convenience.
This is by far the most important and technical step of the process and nearly constitutes 70 – 80 % of filing process. The Correctness of this mapping must be reviewed. Errors that creep in must be removed by professional judgement.
Step 2
Based on the Mapping above , create a instance document.
Separate Instance document must be created for :
  • Standalone Balance sheet
  • Standalone profit and loss account
  • Consolidated Balance sheet
  • Consolidated Profit and Loss Account
Step 3
Validate the created instance document.
The Validation tool of MCA will be shortly available on the MCA portal. This tool is to be downloaded.
Just as FVU validation or others, the instance document created should be validated from this validation tool.
Checks performed by this validation tool are as below :
  • Correct version of taxonomy used ?
  • Taxonomy elements fully recuperated ?
  • Compliance with Business Rules ?
  • Vis a Vis MCA – 21 Database ?
A Secure key lock will be put on Instance Document once the Validation is done correctly.
Step 4
File the Instance Document.
Instance document created and validated as above shall be attached to Form 23AC and Form 23ACA ( Seperate class of XBRL forms will be hosted by MCA for XBRL purpose.)
Instance Document is not required to be digitally signed. Only E-form 23AC and 23ACA are required to be digitally signed by practicing professional.
For any other Query/ Opinion:
About the Author
The Author Mr. Ankit Jain (Gulgulia) is a Practising Chartered Accountant in New Delhi. Specialising in Indirect Taxes, Corporate Laws & Assurance. You Can Contact him at Or +919811653975.

Thursday, 16 February 2012

Company Secretaries June, 2012 Examination -Applicability of the latest Finance Act and other changes


Applicability of the latest Finance Act and other changes for Company Secretaries June, 2012 Examination.


All students may note that for the June 2012 Examination Session in respect of Direct Taxes the applicable Assessment Year shall be 2012-13 (Previous Year 2011-12). Thus, they will have to study Finance Act, 2011 for June 2012 Examination. Further as per the Syllabus, (of Executive Programme and Professional Programme) students are required to update themselves about all the Circulars, Clarifications, Notifications, etc., issued by the CBDT & Central Government, which come into effect on or before six months prior to the date of the respective examinations.
Gift Tax Act has been excluded from the scope of the examination from June 1999 session onwards unless otherwise informed.


Students appearing in the ‘Tax Laws’ (Indirect Tax Portion to the extent of topics covered in the syllabus, of ‘Executive Programme’) and Advanced Tax Laws and Practice (Professional Programme) respectively may take note of the following changes applicable for June 2012 Examination.
1. All changes made by the Finance Act, 2011.
2. All Circulars, Clarifications/Notifications issued by CBEC / Central Government which became effective six months prior to the date of examination.