November-December 2010 - Bangalore Branch of SIRC

Bangalore Branch of SIRCof the Institute of Chartered Accountants of IndiaNovember20102

CPE AND OTHER PROGRAMS - November-December 2010Date/Day Topic /Speaker Venue/Time CPE Credit03.11.10 Life in taxing world: A dilemma of tax collector Branch Premises 2 hrsWednesday and tax practitioner 06.00pm to 08.00pmDr. Sibichen K Mathew,IRS, Addl Commissioner of Income Tax10.11.10 Microfinance - The rising sector & professional Branch Premises 2 hrsWednesday opportunities for Chartered Accountants 06.00pm to 08.00pmCA. Sudha Suresh20.11.10 One day seminar on KVAT - Audit Branch Premises 6 hrsSaturday Delegate Fee: ` 700/- Details Page No: 8 10.00am to 05.30pm24.11.10 International Taxation - Estate tax planning - Branch Premises 2 hrsWednesday A new avenue for CAs 06.00pm to 08.00pmCA. Divakar Vijayasarathy01.12.10 An overview of IFRS & Challenges involved in Branch Premises 2 hrsWednesday first time adoptions 06.00pm to 08.00pmCA. Aditya Singhal04.12.10 Seminar on “Emerging Economic challenges The Lalit Ashok, Bangalore 6 hrsSaturday for Industry” 09.00am to 06.00pmDelegate Fee: ` 1,800/- Details Page No: 1608.12.10 Companies Bill 2009 & MCA Guidelines 2009 Branch Premises 2 hrsWednesday on Corporate Governance & CSR 06.00pm to 08.00pmCA. Vijay Raja11.12.10 Seminar on “Mergers and Aquisitions” 09.30am to 05.30pm 6 hrsSaturday Details Page No: 1715.12.10 Recent developments in Auditing Standards Branch Premises 2 hrsWednesday CA. D M Suresh 06.00pm to 08.00pm18.12.10 CPE Conference - Jnana Jyothi Convention Center, 12 hrsSaturday & “Jnanaarjana - Quest for Knowledge” Central College Campus,19.12.10 Delegate Fee : Members ` 1,800/- BangaloreSunday Non-Members: ` 2,000/- Details Page No: 17Note : High Tea at 5.30 pm for programmes at 6.00 pm at branch premises.Advertisement Tariff for the Branch NewsletterColour full pageInside Black & WhiteOutside back ` 30,000/- Full page ` 15,000/-Inside front ` 24,000/- Half page ` 8,000/-Inside back ` 24,000/- Quarter page ` 4,000/-Advt. material should reach us before 22nd of previous month.Editor : CA. Shambhu Sharma H.Sub Editor : CA. Prasad S.R.DISCLAIMER : The Bangalore Branch of ICAI is not in anyway responsible for the result of any action taken on the basisof the advertisement published in the newsletter. The members, however, bear in mind the provision of the code of ethics whileresponding to the advertisements. The views and opinions expressed or implied in the Branch Newsletter are those of the authorsand do not necessarily reflect those of Bangalore Branch of ICAI.3 November2010

Bangalore Branch of SIRCof the Institute of Chartered Accountants of IndiaTAX UPDATES SEPTEMBER 2010CA. Chythanya K.K., B.Com, FCA, LL.BVAT, CST, ENTRY TAX,PROFESSIONAL TAXPARTS DIGESTED:a) 2010-11(15) KCTJ Part 6b) 2010 69 Kar. L. J. Part 8 & 9c) 32 VST – Part 6d) 34 VST – Part 1 & 2Reference/Description2010 (69) Kar. L. J. (St.) 105 :Notification No. KSA/CR-60/2010-11, Bangalore, Dated: 05.8.2010 Thenotification specifies the procedure tofile the monthly VAT return in FormVAT 100, electronically as also thestipulation to submit hard copy of thesaid electronic document every 6months. The same reads as follows:In exercise of the powers under thefirst proviso to sub-section(1) of Section 35 of the KarnatakaValue Added Tax Act, 2003, it ishereby notified with immediate effectthat commencing from the monthending on 31st July, 2010, everydealer paying tax under Section 4 ofthe said Act may submit for everymonth, return in Form VAT 100electronically through internet on orbefore the 20th day of the succeedingmonth, in the following manner:(2) Every such dealer shall obtain his‘user name’ and ‘password’ from thejurisdictional Local VAT Officer(LVO) or VAT Sub-Officer (VSO), ifnot already communicated to him bythe jurisdictional LVO or VSO.(3) Every such dealer shall log on tothe website http://vat.kar.nic.in/ withthe ‘user name’ and ‘password’communicated to him by the LVO orVSO and proceed to submit the returnin Form VAT 100 electronically ,following the instructions andprocedure contained in the saidwebsite.(4) Every such dealer shall enter inthe website specified above theparticulars of any statutory formrequired to be filed along with anyreturn submitted in the websitespecified above and also file thestatutory form in the office of the LVOor VSO, following the instructionscontained in the website.(5) Every such dealer shall file to theLVO or VSO concerned, a dulysigned hard copy of the consolidatedstatement of all such electronicallysubmitted monthly returns for theperiod from April to September andOctober to March of every financialyear, downloaded from the websitehttp://vat.kar.nic.in/, within thirtydays after the close of thecorresponding period of six months.2010 (69) Kar. L.J. 97 (HC) :Nagarjuna Construction CompanyLtd., Bangalore v. State of Karnataka& Others In the instant case, steeland steel products were used as rawmaterial and incorporated into civilworks or other works contracts in thesame form, except that the same wasfashioned to suit the requirement,before the same merged into theworks which was thereafter identifiedas immovable property. In the saidcontext the High Court of Karnatakaheld that at the time of incorporation,steel and steel products did not loosetheir nature or form and thereforecould not be subjected to tax, as thesaid goods are already subjected to taxas declared goods under the CST Act.It may be noted that Explanationbelow Rule 3 of the KVAT Actprovides that any amount paid asadvance to a dealer as a part ofconsideration for transfer of propertyin goods (whether as goods or in someother form) involved in the executionof a works contract shall be includedin his total turnover in the month inwhich execution of such workscontract commences. The High Courtobserved that in the said case thedealer had to pay tax thereon, eventhough there was no transfer ofproperty in any goods involved. TheCourt therefore held that theExplanation certainly ran counter tothe tenor of the charging Section4(1)(c) and also ran counter to thedefinition of “taxable turnover”, ‘totalturnover’ and ‘turnover’ under theAct. It was also in direct conflict withArticle 366(29-A)(b) of theConstitution of India.Similarly, the High Court held thatSection 7 of the KVAT Act, whichcreates a legal fiction that atransaction of sale is completed forthe purposes of the Act when paymentis received as advance was akin tobringing to tax an agreement to sellgoods, even before the property in thegoods passes to the buyer. This wasplainly contrary to the very definitionof “sale” under the Act itself.Therefore the Court held that to thesaid extent, the said provisions wereunconstitutional.In the aforesaidwelcome decision, the honourableHigh Court put a brake on the attemptof the legislature to keep on addingimpractical fictions into the tax law.Quashing the aforesaid Explanationas well as section 7 which had theeffect of putting the cart before theNovember20104

horse is a welcome relief to theharassed Taxpayers.[2010] 69 Kar. L.J. 112 (SC) : Stateof Bihar & Others v. KalyanpurCements Ltd. In the instant case theApex Court noted that when a StateGovernment gives an assurance andundertaking in the form of a policythen in fact it allows certain person(s)/industries to enter into individualventures, invest money etc. The saidindustries etc. based on suchassurances contained in the policy,enter into contacts and agreements.Therefore the Apex Court held thatin such a circumstance it was notjustified on the part of the StateGovernment to later on withdraw thepolicy and the benefit flowing fromthe said policy. The facts of the instantcase was that the Respondent being asick-unit its proposal to obtainfinancial assistance from variousfinancial institutions was approved onthe pre-condition that the restructuringpackage would be available only onthe company obtaining a sales taxexemption for a period of 5 years fromthe State Government in terms ofIndustrial Policy, 1995. A Writ ofmandamus was filed before the HighCourt seeking direction to the State toissue necessary notification underclause 24 of the 1995 policy. The HighCourt had directed the StateGovernment of Bihar to issue followup notification to give effect to theprovisions of the Policy within onemonth and the said decision waschallenged by the appellant-Statewhich had been dismissed.In the aforesaid interesting decision,the Supreme Court issued amandamus to the State to issuenotification which was to be issuedin pursuance to policy declaration. Inthis interesting decision on doctrineof promissory estoppel, the SupremeCourt recognised the plight of thetaxpayers who had altered theirposition on the basis of the promisemade by the State. The State cannotissue the policy and refrain fromissuing any notification.[2010] 34 VST 1 (SC) :Commissioner of Trade Tax, U.P. v.Parikh Gramodyog Sansthan In theinstant case the Hon’ble SupremeCourt noting the distinction betweenelectronic and electrical goods held thatvoltage stabilizers are “electronicgoods” and not “electrical goods”,primarily because electrical goodsinvolve consumption of electricity,whereas an electronic device functionsthrough the creation of an electronvacuum in the semiconductor material.[2010] 34 VST 105 (Guj) : YashOrganics Ltd. v. State of Gujarat Inthe context of furnishing Form ‘C’ andavailing concessional rate of duty theGujarat High Court noted that a dealerwould not be entitled to the benefit ofthe concessional rate of tax if the ‘C’form submitted by him was defective.In the instant case the appellant’s casestood on a weaker footing inasmuch theTribunal had found that the C formssubmitted by the appellant were notgenuine. In the circumstances the Courtheld that the appellant could not bepermitted to avail the benefit ofconcessional rate of tax under theCentral Act. Further the Court observedthat even on basic principles, if the Cforms submitted by the appellant wereforged and the appellant had beenduped, at best the appellant might havea case against the purchasing dealer, butin no case could it be entitled to thebenefit of concessional rate based uponforged certificates.The aforesaid decision cautions thesellers against C form particularlywhen selling goods to new customers.Although it may not be possible tounearth if the C form is forged, it maybe necessary to carry out the duediligence particularly when dealingwith new customers for big orders.INCOME TAXPARTS DIGESTED:a) 326 ITR – Part 4 & 5b) 327 ITR – Part 1 & 2c) 192 Taxman – Part 4 & 5d) 193 Taxman – Part 1 & 2e) 125 ITD – Part 4f) 126 ITD – Part 2 & 3g) 128 TTJ – Part 1 & 2h) 132 TTJ – Part 1 & 3 to 5i) 42-A BCAJ – Part 6Reference/Description[2010] 327 ITR 19 (Bom) : CIT v.Shah Originals The instant case dealtwith export benefit under Section80HHC. The main contention wasthat the gains on account of foreigncurrency fluctuation had norelationship with the exports madeduring the year and that those receiptswere to be excluded from the exportturnover for the purpose ofcomputation of deduction underSection 80HHC. The Bombay HighCourt noted that the fluctuation in thepresent case was not on account ofthe sale proceeds or for that matter onaccount of a delayed realisation of thesale proceeds. The fluctuation hadarisen in the deposits maintained bythe assessee in the EEFC account inconvertible foreign exchange after thecompletion of the export transaction.Further it was observed that anassessee who was an exporter was notunder an obligation of law to maintainthe export proceeds in the EEFC5 November2010

Bangalore Branch of SIRCof the Institute of Chartered Accountants of Indiaaccount but it was a facility which wasmade available by the RBI. Thetransaction of export was complete inall respects upon the repatriation ofthe proceeds. The discretion to receivethe proceeds either in rupeeequivalent or in convertible foreignexchange was with the assessee. Theexchange fluctuation in the EEFCaccount arose after the completion ofthe export activity and did not bear aproximate and direct nexus with theexport transaction so as to fall withinthe expression “derived” as perSection 80HHC(1). Therefore it washeld that the said gains could not beregarded as business income butwould have to be categorised asincome from other sources.[2010] 327 ITR 278 (P&H) : CIT v.Gurnam Singh With reference to thededuction under Section 54B, thePunjab & Haryana High Court held thatwhere there was a sale of agriculturalland and the proceeds of the same wereused to invest in the purchase of newland which was registered under theassessee’s son’s name as co-owner andthe new land continued to be used foragricultural purpose, the assessee in thesaid case was held entitled to deductionunder Section 54B.[2010] 193 Taxman (BN-III) (Part-2) [2010] 6 taxmann.com 120(Bom.): Bhatia Nagar Premises CooperativeSociety Ltd. v. UOI In theinstant case it was held that Section50C was constitutionally valid. Whileholding so, it was observed that, thetwo contentions of the assesseenamely, (1) that Section 50C isbeyond the legislative competenceand (2) that it is violative of Article14 of the Constitution of India, weredevoid of merits.(2010) 128 TTJ (Mumbai) 32 :Maharashtra State RoadDevelopment Corpn. Ltd. v. Assist.CIT two In the instant case theassessee was engaged in the businessof providing infrastructure, namely,building flyover, roads, bridges,express highway, ROB etc. It wascarrying on its activities of developingand maintaining infrastructurefacilities by permitting vehicles to plyover those structures. The MumbaiTribunal in such a scenario noted thatthe said assets could not be consideredas merely the setting in which thebusiness was carried on. It was furthernoted that the said assets were toolsof trade and essential adjuncts to thebusiness. Therefore applying thefunctional test, it was held that thesame constituted plant and wereentitled to depreciation at 25 per cent.(2010) 128 TTJ (Chd) 116 : RakeshChauhan v. Dy. DIT (InternationalTaxation) In the instant case, theassessee made payment towardspurchase of land to a power ofattorney (PoA) holder, of 5 nonresidentco-owners, one Mr. P whowas a resident of India. Theagreement was entered into with P andthe Revenue did not dispute the factthat the payment had been made to Pas a representative nominated by thenon-residents. The rights in the landwere assigned to P by way of PoAexecuted by the co-owners. Thus, hewas not merely acting as an agent ofthe non-residents to receive moneybut had the right to alienate the landby virtue of the rights vested in himby the PoA. The Chandigarh Tribunalnoted that Section 195 applies onlyto payments which are made to nonresidents.In the instant case P towhom the payments were made wasa resident and therefore held thatSection 195 was not applicable in theinstant case and the assessee could notbe treated as an assessee in default.The aforesaid decision althoughfavourable runs counter to thedecision of jurisdictional tribunal inthe case of Mrs. Meena S. Patil vs.Assistant Commissioner of IncomeTax [2008] 113 TTJ (Bang) 863.(2010) 132 TTJ (Chd) (SB) 1 : Dy.CIT v. Quark Systems (P) Ltd. Theinstant case dealt with TransferPricing provisions and thecomputation of the arm’s length pricewhile selecting comparable cases. Inthe light of the said background theChandigarh Tribunal noted that abusiness organization with negativenet worth could not be treated at parwith a normal business organization.The turnover of one comparablecompany - Imercious was only Rs.1.47 crore, whereas no othercomparable had less than Rs. 5 croresturnover and the assessee had aturnover of Rs. 13.06 crores. TheTribunal noted that the filter of lowerturnover at Rs. 1 crore was withoutany reasonable basis and there was nofilter for higher turnover at all. Theapplication of turnover filter did notseem to have any rationale basis. TheTribunal went on to observe that itwas improper to proceed on the basisthat the turnover of Rs. 1 crore toinfinite was a reasonableclassification as turnover base. TheTribunal opined that merely becausea comparable was making loss, itcannot be excluded from the list ofcomparables for the purposes ofcomputation of ALP; Imercius was acase in which not only functional areawas different, but had a negative networth and also it had no comparisonwith the assessee company.The Tribunal took the view that ifImercius Technologies had sufferedheavy losses and, therefore, it was notNovember20106

treated as comparable by the taxauthorities, they also have to considerthat the Datamatics had earnedextraordinary profit and had a hugeturnover, besides differences in assetsand other characteristics and thereforethe same also had to be excluded as acomparable.(2010) 132 TTJ (Mumbai) 20 :Linklaters LLP v. ITO (InternationalTaxation) In the context of DTAAbetween India and UK and theprovisions of Article 7 dealing withBusiness Profits, the MumbaiTribunal observed that the said Articleprovides that if the enterprise carrieson business through a PE, the profitsof the enterprise may be taxed in theother State but only so much of themas was “directly or indirectlyattributable to that PE”. The Tribunalnoted that inclusion of ‘profitsindirectly attributable to PE’ clearlyincorporated a force of attractionprinciple in the tax treaty. Therefore,in addition to taxability of income inrespect of services rendered by the PEin India, any income in respect of theservices rendered to an Indian project,which was similar to the servicesrendered by the PE, had to also betaxed in India, irrespective of the factwhether such services were renderedthrough the PE or directly by thegeneral enterprise. The Tribunal heldthat this indirect attribution wasenough to bring the income from suchservices within the ambit of taxabilityin India. Thus it was held that theentire profits relating to servicesrendered by the assessee, whether inIndia or outside India, in respect ofIndian projects were taxable in India.In the aforesaid decision, the force ofattraction principle was drawn in byinference. With due respect, it is statedthat the principle of force of attractionhas to be explicitly provided for likein the case of Indo US DTAA andcannot be inferred. It seems thehonourable tribunal hasmisconstrued the use of word‘indirectly‘ in the context ofattribution and wrongly held that thesame is applicable for determiningthe charge itself.(2010) 132 TTJ (Mumbai) 468 : Ms.Nita A. Patel v. ITO In the instantcase property was purchased by theassessee by way of agreement dt. 27 thDec., 1990 and the assessee alsoobtained the certificate under s.269UL(3) (dealing with Restrictionson registration, etc., of documents inrespect of transfer of immovableproperty) on 13 th Feb., 1991. In thecontext of determination of therelevant date for indexation of cost theAO held that since the assessee gotpossession of the flat after paying Rs.18,00,000 to the tenant only on 6 thJan., 1992, she held the property fromthat date and accordingly calculatedthe indexed cost of acquisition fromthat date. However the MumbaiTribunal countering the stand of theAO noted that the word ‘held’ usedin the Explanation to Section 48referred to ownership rights only andnot physical ownership or physicalpossession of the property. TheTribunal therefore held that theassessee was holding the rights in theproperty from 27 th Dec., 1990 andaccordingly the indexation has to beallowed from that date.(2010) 132 TTJ (Mumbai)(SB) 505:Dy. CIT(International Taxation) v.Bank of Bahrain & Kuwait In theinstant case the Mumbai Tribunaldealt with the mercantile system ofaccounting and the concept of accrualas applicable in the case of a forwardcontract. The Tribunal held that if theguarantee commission wasrefundable then it could not be saidthat absolute right to the commissionhad accrued in favour of the guarantor(assessee) at the time of execution ofcontract for furnishing guarantee byit. However if the guaranteecommission was not dependent uponperiod of guarantee and, thus, hadaccrued in favour of the assessee onthe date of execution of contract forfurnishing guarantee then the samehad to be taxed in the year in whichthe guarantee was furnishedirrespective of the period to whichguarantee remained alive.In the instant case the Assessee-bankentered into forward contracts withclients to buy or sell foreign exchangein order to hedge against possiblefuture financial loss on account offluctuation in the rate of foreigncurrency. If an anticipated liability iscoupled with present obligation andonly quantification would varydepending upon the terms of thecontract, then a liability is said to havecrystallized on the balance sheet date.In the instant case, the event ofentering into the contract andundertaking of obligation to meet theliability had already taken place. TheTribunal noted that the contention ofthe Revenue, that the liability wouldarise only when the contract matures,was completely divorced from theprinciples of commercial accounting.The Tribunal further observed thatanticipated losses on account ofexisting obligation as on 31st March,determinable with reasonableaccuracy, being in the nature ofexpenditure/accrued liability, have tobe taken into account while preparingfinancial statements. Further withreference to AS -11 the Tribunal notedthat the same mandates in a situation7 November2010

Bangalore Branch of SIRCof the Institute of Chartered Accountants of Indialike in the present case, where thetransaction is not settled in the sameaccounting period, the effect ofexchange difference had to berecorded on 31st March. The foreignexchange held by the assessee-bankwas its stock-in-trade and it enteredinto forward foreign exchangecontracts in order to protect its interestagainst wide fluctuation in theexchange rate. Thus, this contract wasincidental to assessee’s holding of theforeign currency as current asset andit could not be said that the forwardcontract had no trappings of stockin-trade.The Tribunal therefore held that,when profits were being taxed by theDepartment in respect of such unmaturedforward foreign exchangecontracts then there was no reason todisallow the loss as claimed byassessee in respect of same contractson the same footing. Therefore, lossincurred by the assessee on accountof evaluation of the contract on thelast date of the relevant accountingperiod i.e., before the date of maturityof the forward contract, was allowableas deduction.One Day Seminar on KVAT – AuditOn Saturday, 20 th November 2010between 10.00am and 05.30pm At Branch Premises6 HrsCPETimings Topics Speakers10.00am to 11.30am Approach to KVAT Audit process CA. L. Sridharby Professionals11.30am to 11.45amTEA BREAK11.45am to 01.15pm Audit Report documentations and CA. N. Syama SundaranPenal provisions01.15pm to 02.15pmLUNCH02.15pm to 03.45pm Important clauses of FORM VAT 240 CA. S. Vishnumurthy03.45pm to 04.00pmTEA BREAK04.00pm to 05.30pm Discussion on Practical issues on CA. L. SridharKVAT AuditCA. N. Syama SundaranCA. S. VishnumurthyCA. S. RamasubramanianCA. Sanjay N. DhariwalDelegate Fee: ` 700/-(Cash / Cheque in favour of “Bangalore Branch of SIRC of ICAI” payable at Bangalore )Seminar Co-ordinator: CA. Sanjay M. DhariwalFor registration & further details please contact:Bangalore Branch of SIRC of ICAI,“ICAI Bhawan”, 16/O, Millers Tank Bed Area, Vasanth Nagar, Bangalore-560052Tel: 080 – 30563500 / 513 Email: blrregistrations@icai.orgNovember20108

RECENT JUDICIALPRONOUNCEMENTSIN INDIRECT TAXESCA. N.R. Badrinath, B. Com., Grad C.W.A., F.C.A.,CA. Madhur Harlalka, B. Com., F.C.A.CENVAT CREDIT:Dutiable and exempted goods1. In the present case, the appellantavailed of CENVAT credit oninput services, which are used formanufacture of both dutiable andexempted final products and theproportionate CENVAT creditrelating to exempted finalproducts was reversed. However,adjudicating authority demandedan amount of 10% of value ofexempted goods and proposed tolevy the penalty. The Tribunal heldthat Finance Act, 2010 hasamended the Rule 6 of CENVATCredit Rules, 2004 retrospectivelyfor reversal of proportionateCENVAT credit of exemptedfinished goods and payment ofinterest @ 24% for the period fromthe date availment of CENVATcredit upto date of reversal ofproportionate CENVAT credit ofexempted goods. Accordingly,penalty set aside and directed topay interest @ 24% in terms ofamended Rule 6 of CENVATCredit Rules, 2004. [M/s. StandardInspirational Precision EngineersPrivate Limited Vs CCE,Bangalore, 2010-TIOL-1332-CESTAT-BANG]Taxable and exempted services2. In the present case, the appellanthas availed the CENVAT credit oncapital goods, which were used forprovision of taxable and exemptedservices and the CENVAT Creditwas utilised in excess of 20% ofoutput tax liability of taxableservices. Tribunal while grantingthe stay application held that therestriction under Rule 6(3) is beingnot applicable to credit on capitalgoods, demand prima facie notsustainable and full waiver of predepositallowed and stay granted.[M/s Bharat Sanchar Nigam Ltd VsCCE, Thiruvananthapuram, 2010-TIOL-1262-CESTAT-BANG]Capital goods vs. constructionmaterials3. The issue in the present casewhether CENVAT credit on MSPlates, MS Joints and MS Steel etcare available in light of exclusionof construction materials from thedefinition of Capital Goods.Tribunal held that the issue nowstands squarely settled against theassessees by the Tribunal LargerBench decision in the case ofVandana Global Ltd. & Others(2010-TIOL-624-CESTAT-DEL-LB) and relining on the abovedecision CENVAT credit is notadmissible on MS plates, MSjoints and MS steel. [CCE,Tiruchirappalli Vs M/s. ThiruArooran Sugars Ltd, 2010-TIOL-1311-CESTAT-MAD]4. The issue in the present waswhether CENVAT credit onplates, angles and channels usedfor supporting structures andfurnace stands is admissible.Tribunal held that plates, angles,channels are constructionmaterials for supporting structuresand the definition of capital goodsspecifically excludes suchconstruction materials from thescope and in view of the LargerBench decision in case of M/sVandana Global Ltd (2010-TIOL-624-CESTAT-DEL-LB), theCENVAT credit is not admissible.[CCE Vs M/s Core Fabs Project(P) Ltd, 2010-TIOL-1259-CESTAT-DEL]Removal of inputs as such forexport under Bond5. The issue in the present case iswhether cenvated inputs could beremoved for export under bond oron payment of an amount equalto credit availed. The Boardinstruction No.345/2/2000-TRUdt.29.8.2000 permits clearance ofcapital goods for export underbond specifically without reversalof CENVAT credit. Hence, theexport of inputs is allowablewithout payment of excise dutyunder Bond. The Tribunal hasrelied on M/s. VideoconInternational Ltd. Vs CCEVadodara (2008-TIOL-2781-CESTAT-AHM). [M/s RootsIndustries Ltd Vs CCE,Coimbatore, 2010-TIOL-1305-CESTAT-MAD]Removal of goods as such6. In the present case, the respondentare manufacturers of tyres and thesame are sold along with boughtout tubes and flaps in the retailmarket and also to originalequipment manufacturers (OEMs)9 November2010

Bangalore Branch of SIRCof the Institute of Chartered Accountants of Indianamely, automobile manufacturersfor fixing in new vehicles. Therespondent did not claim anyCENVAT credit on tubes and flapswhich were sold in the retail marketalong with tyres. Consequentlythey are claiming exemption frompayment of excise duty on sale oftubes and flaps and duty was paidonly on the tyres sold along withsuch tubes and flaps. However, therespondent claimed CENVATcredit on tubes and flaps, whichwere sold to OEMs on the groundthat tubes and flaps are inputs inthe form of accessories to tyre soldby them to OMEs along with tyres.Further, the respondent has billedseparately for tyres and tubes andflaps. The Honourable High Courtheld that the appellant is notentitled to CENVAT credit ongoods sold to OEMs since removalof purchased tubes and flaps alongwith tubes amounts to clearance assuch. The packing of tube withinthe tyre along with the flap andpartly inflating the tube does notmake the transaction anythingother than a transfer or sale in thesame form. In order to justify aninput tax credit, the respondentassesseeought to have used theitem purchased as an input,whether it be accessory or not.Even though tubes and flaps areadmittedly accessories for use oftyre, the purchase and resale oftubes and flaps along with the tyredoes not make the transactionanything different from trading.The respondent-assessee isengaged in purchase and resale oftubes and flaps along with tyres andrightly they don’t claim anyCENVAT credit for the duty paidon tubes and flaps. There is noscope for penalty because the claimis made by the respondent onaccount of misunderstanding oflaw which found acceptance withthe Tribunal. Consequently penaltylevied will stand cancelled. [CCEVs M/s. Appollo Tyres Ltd, 2010-TIOL-670-HC-KERALA-CX]Transportation and Insuranceservices of residential building:7. The issue in the present case iswhether credit of the service taxpaid on the vehicle services usedin the residential colony and onthe insurance of the residentialbuilding etc is available. Tribunalheld that the expression“business” appearing in Rule 2(l)of CENVAT Credit Rules, 2004 isan integrated/continued activityand not confined or restricted tomere manufacture of product andthat activities in relation tobusiness can cover all activitiesrelated to functioning of abusiness. The expression“business” is of wide import inphysical statutes. Credit of servicetax paid on the vehicle servicesused in the residential colony andon the insurance of the residentialbuilding etc. is allowable.Tribunal has relied on decisionsof Manikgarh Cement v. CCE &Cus. Nagpur (2008-TIOL-133-CESTAT-MUM) , Millipore IndiaLtd. v. CCE, Bangalore (2009-TIOL-490-CESTAT-Bang), CCE,Aurangabad v. EnduranceSystems India Pvt. Ltd. (2009-TIOL-210-CESTAT-MUM),CCE, Chennai v. SundaramClayton Ltd. (2010-TIOL-69-CESTAT-MAD). [M/s. UltratechCement Ltd Vs CCE,Bhavnagar,2010-TIOL-1325-CESTAT-AHM]SERVICE TAX:Business Auxiliary Service - CallCentre Services8. The issue in the present case iswhether service of encryption andcompilation of data pertaining toclients and provision of detailsthereof on telephone to callers/prospective customers of clients iscall centre services. Tribunal heldthat in case of traditional callcenter, normally the 2nd partyapproaches the clients i.e. 1stparty to keep/ maintain databaseof the products/ services offered /dealt with by the 1st party for itsuse by the inquirer / prospectivebuyer. However, in the presentcase the inquirer who makes callfor help / assistance and all thethree parties are benefited. The 1stparty, in case of traditional callcenter, is benefited by way ofbetter working and satisfaction toinquirer whereas in the presentcase the 1st party is benefited byway of promotion of sales /marketing of products/ servicesdealt with by them. The 2nd party,in both the cases, gets businessand consideration. The 3rd party,in both the cases, gets help,assistance etc. The only differenceis methodology of theirfunctioning. In both the cases, the1st party makes payment to 2ndparty. Because of the singledifference in functioning, onecannot conclude that theappellants are not a call center,though they satisfy all theconditions of a defined call center.Hence, service of encryption andcompilation of data pertaining toclients and provision of detailsthereof on telephone to callers /prospective customers of clients isNovember201010

‘call centre service’. The callcentre services were exemptedfrom service tax till 28.02.2006under category of BAS. [CST,Ahmedabad Vs M/s Citizen Info-Line Ltd, 2010-TIOL-1340-CESTAT-AHM]Transport of the Goods throughpipeline9. In the present case, appellants hasestablished pipeline with a viewto transmit the natural gas throughsuch pipelines. Service taxdepartment has demanded theservice tax under the category“Clearing and ForwardingServices” for the period prior to16.06.2005 on the ground that theappellant are not having anywarehouse and are not selling thegas by raising invoices on behalfof the gas suppliers. Tribunal heldthat service tax was introduced forthe first time in respect of servicesfalling under the category of“Transport of the Goods throughpipeline or other conduit service”under Section 65(105)(zzz) ofFinance Act, 1994 w.e.f. 16.6.05.The appellant not having anywarehouse and not selling the gasby raising invoices on behalf ofthe gas suppliers are in the natureof assumptions and presumptions,inasmuch as the same takes intoconsideration the hypotheticalsituation of the appellantsupplying the gas in cylindersinstead of through pipe line. Taxcannot be confirmed on the basisof “ifs and buts” and required totake into consideration the actualfact available. Further Tribunalheld that Tribunals, in number ofmatters, has held that when a newservice is introduced, for thepurpose of levy of service taxfrom a specified date, it has to beheld that the said service was notliable to tax prior to the date ofintroduction. [M/s Gujarat StatePetronet Ltd Vs CST, Ahmedabad,2010-TIOL-1289-CESTAT-AHM]Transport of goods by Road10. In the present case, the appellantimported yarn from Nepal andNepal supplier engaged Indiantransporter for transport of yarnform Nepal to India. The Nepalsupplier has billed separately forsupply of yarn and freight charges.Service tax department hasdemanded the service tax ontransportation services from theappellants. Tribunal held that theperson who engages and paysfreight charges is liable to payservice tax under Section 68(2) ofthe Finance Act, 1994 read withRule 2 (1) (d) (v) of Service TaxRules, 1994. In the present case,appellant neither engaged thetransporters and nor paid freightcharges to the transporters andappellants are not agents of theNepal suppler. Further, thetransporters are in India thus, thereis no question of import of service.Hence, demand of services tax onfreight charges are not sustainableand set aside. [M/s. SumangalamSuitings Pvt Ltd Vs CCE, Jaipur,2010-TIOL-1284-CESTAT-DEL]Maintenance and Repair of Roads:11. The issue in the present case iswhether the road management,maintenance, or repair serviceswere liable to service tax from16.06.2005 to 26.07.2009, whennotification no. 23/2009-ST Dt,27.07.2009 has grantedexemption from the service taxlevy on all persons providingmanagement, maintenance orrepairs of roads. The HonourableHigh Court held that theexemption under notification 23/2009-ST is prospective w.e.f27.7.2009 and cannot be givenretrospective effect in the absenceof specific and express provisionin the notification. TheHonourable High Court reliedupon the Honourable SupremeCourt decision of Commissionerof Customs Vs. Spice Telecom(2006-TIOL-146-SC-CUS-LB).Further, it was held that it is forthe Government to considerwhether a notification should begiven retrospectively, and if so, upto what period and unless it is soprovided, the Tribunal or even theHigh Courts have no power togrant retrospective effect for anotification in the interpretationprocess. Accordingly, writpetitions were dismissed. [M/sKarvembu & Co Vs The UnderSecretary To Govt Of India, 2010-TIOL-676-HC-MAD-ST]Construction of residential/commercial complexes12.Construction of residential /commercial complexes serviceswere undertaken by the appellantson their own land. The appellantsalso entered into agreements tosell such complexes aftercompletion. Service Taxdepartment demanded the servicetax under the category ofconstruction of residential /commercial complexes services.Tribunal held that agreement tosell is not being final and servicesprovided till the execution ofproper sale deeds would beregarded as self service in termsof Board’s Circular No. 108 dated29.01.2009. Hence, prima facie11 November2010

Bangalore Branch of SIRCof the Institute of Chartered Accountants of Indiasuch services are not liable toservice tax and pre-deposit iswaived in full. [M/s Korath GulfLinks Builders Private Limited VsCCE, Cochin, 2010-TIOL-1257-CESTAT-BANG]Business Auxiliary Services13. In the present case, the appellantwas engaged in processing andassembling jeans buttons withmetal inserts and nylon inserts andprocessing of needle threader. Theservice department demanded theservice tax under the category“Business Auxiliary Services”.Tribunal held that definition ofBusiness Auxiliary Service didnot include processing of goodsat any time before 16.6.2005 anddemand is required to be requantifiedfor the period post16.6.2005 only. [M/s. N.K.Fasteners Vs CCE, Salem, 2010-TIOL-1237-CESTAT-MAD]14.In the present case, appellantclaimed refund of service tax paidon input services used in exportedservices under notification no. 12/2005-ST. However, adjudicatingauthority has denied refund ofservice tax on the ground that adeclaration of input services wasnot filed before effecting exports.Tribunal held that proceduralrequirement (i.e. filing declarationof input services) cannot be usedto deny a substantive benefit.Tribunal relied upon CST DelhiVs. Convergys India Pvt. Ltd.(2009-TIOL-888-CESTAT-DEL)CST Delhi Vs. Keane WorldzenIndia Pvt. Ltd. (2008-TIOL-496-CESTAT-DEL). Further, the caseis remanded to the originaladjudicating authority to considerthe eligibility of refund in termsof conditions and limitations in thenotification. [M/s. Manubhai &Co Vs CST, Ahmedabad, 2010-TIOL-1307-CESTAT-AHM]Outdoor Catering15.In the present case appellantsentered into agreement withNational Institute of BankManagement to prepare food andserve in the institute canteen. TheInstitute has to provide water,electricity, kitchen equipment,crockery-cutlery, furniture,cooking gas/fuel etc. Show causenotice was issued to the appellantdemanding service tax under thecategory outdoor catering servicesand also proposed to levypenalties for non payment ofservice tax. Tribunal held that themere activity of preparation andserving food where the facilityrelating to maintenance of canteenincluding furniture, electricity,water etc. is provided by thecompany does not fall underoutdoor catering services as heldby the Tribunal in the case ofRajeev Kumar Gupta vs.Commissioner of Central Excise(2009-TIOL-864-CESTAT-DEL).Hence, the above service don’tqualify as “Outdoor CateringService”. Further, the appellantsare paying service tax and interestunder a bonafide beliefstrengthened by CESTAT decisionin Rajeev Kumar Gupta and hencethe Penalty u/s 78 is notimposable. [M/s. KalsisKitchenette Vs CCE, Pune, 2010-TIOL-1319-CESTAT-MUM]CENTRAL EXCISEStay beyond 180 days:16.The issue in the present casebefore the Honourable High courtis whether the Tribunal isempowered to grant stay beyond180 days and whether the same isautomatic. Honourable HighCourt held that Tribunal isempowered to grant stay beyond180 days, but extension is notautomatic and it has to bespecifically granted if the assesseeis not at fault and the Tribunal forreasons beyond its control isunable to dispose of the appealwithin 180 days from the date ofthe grant of order of stay. Merelybecause there is no expressprovision provided for extendingstay granted, it cannot be said thatTribunal has no power to extendgrant of stay. In case of anapplication made by the assessee,the Tribunal has the power toextend the order of stay and theorder of stay is not automatic.[CCE, Mangalore Vs M/s IndianOil Corporation, 2010-TIOL-695-HC-KAR-CX]Lubricants Waste17. In the present case, the appellantsused lubricants in the plant andmachinery and the same wasdrained out after it became unfitfor further use. Such drain out oilwas sold as waste oil. CentralExcise department demanded theexcise duty on waste oil sold.Tribunal held that waste oil isnothing but lubricant which afteruse over a period of time becomesunfit for further use and wasdrained out. The waste lubricatingoil drained out after use oflubricant over a period of time isnon-excisable. Moreover thatheading 34.03 covers “lubricatingpreparations (including cutting oilpreparations, bolt or nut releasepreparations, anti rust or anticorrosion preparations and mouldNovember201012

eleased preparations based onlubricants) and preparations of akind used for oil or greasetreatment of textile material,leather, fur skin or other materials,but excluding preparationscontaining, as basic constituent,70% or more by weight ofpetroleum oil or of oils obtainedfrom bituminous minerals”. Theproduct in question is waste oilobtained by draining out usedlubricants from the machineryafter a long period of its use. Thisby itself is not the answer to thedescription of the goods coveredby heading 34.03. Hence, usedlubricants removed as waste oil isnot excisable goods and hencecredit is not required to bereversed. [M/s Yamaha MotorsIndia (P) Ltd Vs CCE, Noida,2010-TIOL-1285-CESTAT-DEL]18. Mere fact that the order of theappellate authority is not“acceptable” to the department isin itself an objectionable phrasefor not following it unless itsoperation has been suspended bya competent Court. It has held thatif this healthy rule is not followed,the result will only be undueharassment to assessee and chaosin administration of tax laws. [M/s. Allovers and Lace PrivateLimited Vs CCE, Pune, 2010-TIOL-1244-CESTAT-MUM]CUSTOMSSettlement Commission19.The issue in the present casebefore the honourable High Courtis whether “SettlementCommission” has jurisdiction tosettle drawback issues. It is to benoted that drawback is nothing butremission of duty on account ofthe statutory provisions in the Actand scheme framed by theGovernment of India. Theapplication can be made withsettlement commissions in respectof a “case” in terms section127B(1) of the Customs Act andthe case is defined as `any’proceeding under this Act or anyother act of the levy, assessmentand collection of customs dutyunder section 127A(b) of CustomsAct, 1962. Accordingly, aproceeding for recovery ofdrawback of duties could betreated as a “case”. Thus, theSettlement Commission hadjurisdiction to deal with thequestion relating to the recoveryof drawback erroneously paid bythe Revenue. [UOI Vs CC & CCE,Mumbai, 2010-TIOL-687-HC-MUM-CUS]CENTRAL SALES TAX:Sale in the course of import:20. In the present case, the appellantsentered into agreement withN.T.P.C for design, supply,erection and commissioning ofAsh Handling Plant and theappellants imported pipes forbuilding the Ash plant. Each pipeswere embossed as - “NTPC-FARAKKA STG-II(2x500 MW)Indure Limited (Ash Handling).Such pipes were used in theerection of the Ash HandlingPlant. The appellant claimed theexemption of sale in the course ofimport under section 5(2) ofCentral Sales Tax Act, 1956.However, West Bengalcommercial tax department hasdemanded the sales tax onimported pipes used in theexecution of works contract on theground that it was neitherobligatory nor mandatorilyrequired for the Company to haveimported the goods in question.There was no contractual or legalobligation on their part to do so.The only obligation required to beperformed by the Company underthe terms of the Letter of Awardand the contract was to design,supply, erect and commission theAsh Handling Plant for N.T.P.C.,irrespective of the components tobe used therein. Appellant’sfurther obligation was that thematerials used in the execution ofthe said contract should conformto the specification stipulated byN.T.P.C. Such supplies would beeffected by the Company eitherfrom imports or procured fromwithin the country. However, theHonourable Supreme Court heldthat Import of pipes hadoccasioned only on account of thecovenant entered into between theappellant and N.T.P.C. and theimported pipes were usedexclusively for erection andcommissioning of the plant andthe appellant is entitled to claimbenefit of Section 5(2) of the Act.[M/s. The Indure Ltd VsCommercial Tax Officer, 2010-TIOL-79-SC-CT]Freight and Insurance charges21.The issue in the present casebefore the honourable SupremeCourt is whether freight andinsurance charges are includible inthe taxable turnover for TNGST/CST. In the present case, thecontract between the supplier andthe buyer is delivery of goods tothe buyer where ownership ofgoods will remain with suppliertill delivery at destination andfreight and insurance charges ispayable by purchaser as a13 November2010

Bangalore Branch of SIRCof the Institute of Chartered Accountants of Indiaconsideration. Further, the transferof title to the goods as providedin clause 10 read with clause 6 ofthe agreement was to be at theplace of delivery in the premisesof the buyer. Though the contractmentioned the price of the electricmeters as ex-factory price, thedelivery was not at the factory gate.The specification of what the pricewould be at the factory gate,therefore, does not in the contextof the term subject to which the salewas agreed to be effected, renderit the point or the location at whichthe sale can be said to have beencompleted. Had the sale beencompleted at the factory gate, theexpenses incurred thereafter byway of freight charges would thenbe capable of being regarded asexpenditure which was in thenature of a post-sale expenditureand, if paid by the seller, regardedas an amount paid by such selleron behalf of the buyer. Hence,turnover and taxable turnoverincludes the freight and insurancecharges incurred by seller uptodestination and is liable to sales taxand CST. [M/s INDIA METERSLIMITED Vs. STATE OF TAMILNADU, 2010-TIOL-69-SC-CT]SUGGESTIONS ON DIRECT TAX CODE BILL-2010The Direct Tax Code Bill, 2010 was introduced in theParliament on 30 th August, 2010.The Parliamentary Standing Committee on Finance hasinvited inputs and suggestions from various Institutions/experts by 10 th November, 2010.Accordingly, the Direct Tax Committee of ICAI hasformed various sub-groups .The various chapters of theDirect Tax Code Bill are being allocated amongst thesesub-groups. In this regard, a sub-group has beenconstituted at Bangalore under the convenorship of CAK. Raghu, Central Council Member.The chapters allotted to Bangalore sub-group are as follows:Chapter VII - Special provisions relating to tax ondistributed profits of domesticCompaniesChapter VIII - Special provisions relating to tax onDistributed IncomeLand Required forBangalore Branch of ICAIBangalore Branch of ICAI is scouting for land withincity limits and preferably near to Metro station. Extentof land required is 10,000 to 20,000 sq.ft. The landshould be free hold and not subject to any encumbrances.Land should be on the main road or having easyaccessability. Any member having information onthe required land is requested to e-mail atbangalore@icai.org with the subject “AVAILABILITYOF LAND”.Chapter III - Computation of Total IncomeSub Chapters :II C - Income from BusinessII D - Capital GainsSince the Direct Tax Committee of ICAI is likely tomeet on 6 th November, 2010 you are requested tosend your comments/ suggestions before 4 th November,2010 to enable the Direct Tax Committee to discuss andfinalize the same. Kindly send your inputs in thefollowing format:Chapter/Section/ Suggestion JustificationClauseMembers are requested to send their suggestions tobangalore@icai.org with subject “DIRECT TAXCODE - Suggestions” in the abovementioned format.e-LearningICAI has introduced e-Learning Course for the benefitof members, following courses are currently offered :1. e-Learning Course on Service Tax2. e-Learning Course on International FinancialReporting Standards (IFRS)3. e-Learning course on Transfer PricingPayments can be made online.For further details please visit : www.icai.orgNovember201014

INVESTMENT BANKING COURSEAustal GroupWWW.AUSTALGROUP.NET/EDUCATIONLIVE CLASSROOM TRAININGCOMPREHENSIVE FINANCIAL MODELING ANDVALUATION ANALYSIS COURSEClass FormatAll 8 sessions (4 hours each) are tailored for personalizedinstruction using the case study approach. Each studentfollows the banker teaching the class and builds the financialmodels along with him.Course MaterialsINTRODUCTION AND FINANCIAL STATEMENT ANALYSISCOMPREHENSIVE VALUATION ANALYSISINTEGRATED CASH FLOW MODELINGCOMPLETE LBO MODELINGMERGER (ACQUISITION) MODELINGINVESTMENT BANKING PROCESS AND BESTPRACTICES, INTERVIEW SKILLS AND RESUME REVISIONFor More Information:Please email us at info@austalgroup.net or sign upon our website at www.austalgroup.net/education.Please visit our website to view all our offerings.Advt.42nd Regional Conferenceof SIRC of ICAI at KochijnanamargaNew Challenges, New Frontierson November 27 and 28, 2010(Saturday and Sunday)Organized by SIRC of ICAIHosted by Ernakulam BranchVenue: Jawharlal Nehru InternationalStadium, Kaloor, Kochi★★★Address by Eminent PersonalitiesDiscussion on important current topicsconcerning the profession12 HrsCPEEnjoy great fellowship & hospitalityFor further details, please referSIRC Newsletter, Sept. & Oct. 2010or visit : www.sircoficai.orgRequired a Femalequalified Chartered Accountantfor a ProprietoryChartered Accountancy Firmin Rajajinagar with0-2 years experience.Contact : CA. AshokMob : 9343509891email.id : ada97in@yahoo.co.inJoin L.I.C. of Indiaas an AgentMin. Qualification 12 th Pass &aged above 18 yearsFor details please Contact:Mob: 98455 13199Advt.Advt.15 November2010

Bangalore Branch of SIRCof the Institute of Chartered Accountants of IndiaSeminar on “Emerging Economic Challenges for Industry”On Saturday the 4 th December 2010at The Lalit Ashok, BangaloreOrganised by: Committee for Members in Industry, SIRC of ICAIHost Branch: Bangalore Branch of SIRC of ICAITimings Topics Speakers09.15 am to 10.00 am InaugurationChief Guest: Sri. Ravi Ramu, Member ICAI & ICAEWPresident & CEO, Hothur Group10.00 am to 11.15 am Session I:Salient Features ofSri M.R.Gopinath, FCS“The Companies Amendment Bill 2009”11.15 am to 11.35 am Tea Break11.35 am to 01.00 pm Session II“Direct Tax Code –Computation of Business Income”01.00 pm to 02.00 pm Lunch Break2.00 pm to 03.30 pm Session III“IFRS & preparing for Convergence”03.30 pm to 03.50 pm Tea Break03.50 pm to 05.15 pm Session IV“GST & its impact on Business Enterprise”05.15 pm to 06.00 pm Session VOpen House - “Understanding theneeds of Members in Industry”Delegate Fees: ` 1,800/-6 HrsCPECA. K.K.Chythanya, FCACA. M.P.Vijay Kumar, FCACA. S.Venkataramani, FCACA. K Viswanath, FCA(Cash / Cheque in favour of “Bangalore Branch of SIRC of ICAI” payable at Bangalore)For registration & further details please contact: Bangalore Branch of SIRC of ICAI,“ICAI Bhawan”,16/0,Millers Tank Bed Area, Vasanth Nagar,Bangalore-560052Tel: 080 – 30563500 / 513 Email: blrregistrations@icai.orgAnnouncement to MembersHurry! Restricted to 250 delegatesCertification Course on International Taxation is likely to be started in 3rd week of November andCertification Course on IFRS is likely to be started on November 20, 2010 at Bangalore, on gettingstipulated minimum registrations. For further details contact : Mr. N.S. Jagadish Kumar, Asst. Secretaryat 3056 3541 or Mr. K.R. Kulkarni, Section Officer at 3056 3542November201016

One Day CPE Seminar on “Mergers and Acquisitions”On 11 th December 2010Details will be published in the next issue ofBranch Newsletter and the announcement will be hostedon our website i.e. www.icai-bangalore.org“CPE Conference - Jnanaarjana - Quest for Knowledge”On Saturday, 18 th & Sunday, 19 th December 2010at Jnana Jyothi Convention Centre, Central College Campus, BangaloreObjective of the conference:As you are aware, our chartered accountancy profession is in lime light more than ever beforeand there is an increase in demand to render quality services to our clientele. CAs play a pivotalrole in the competitive, domestic & international business environment. Globalization, specialization in specificareas of professional interest, complexity in business transactions require the members to continuously enhancetheir analytical skills and render services , which will be globally acceptable on par with international standards.Hence Bangalore branch of SIRC of ICAI is pleased to announce that a 2 day CPE Conference on 18 th & 19 thDecember 2010 is being organized at Bangalore.This conference will provide an opportunity for members to benchmark themselves against higher levels ofexcellence in specific areas of contemporary topics of professional interest.Eminent speakers and professionals from across the country would be sharing their knowledge during theconference. Nearly 1000 delegates from all over Karnataka State would be participating in the Conference.Registration Fee: Members : ` 1,800/-, Non-members : ` 2,000/-Cheque / DD in favor of “Bangalore Branch of SIRC of ICAI” payable at Bangalore.For further details please contact Branch at:“ICAI Bhawan”, 16/0, Millers Tank Bed Area, Vasanthnagar, Bangalore – 52Tel: 080 – 3056 3500, Email: blrregistrations@icai.orgAn SMP Initiative for arrangement of finance forPracticing CAs in the form of loan scheme6 HrsCPE12 HrsCPEThe Committee for Capacity Building of CA Firms and Small & Medium Practitioners, ICAI has taken a majorinitiative for arranging financial assistance to SMPs in the form of liberalised loan scheme through CorporationBank. An MOU has been signed by the President, ICAI with Corporation Bank on 13th October 2010.The scheme – “Corp - CA” is specially designed for the Chartered Accountants. Through the scheme, eligibleChartered Accountants can avail finance for construction of office premises including cost of furniture/fixture/office equipments-computers and other accessories. The scheme would also enable the Chartered Accountants tofinance a part of the working capital for building their profession and will take care of the needs of freshers (CAswith experience below three years).The details of loan scheme may be seen by login on link http://www.icai.org/corpca/index.html. Members maycontact nearest branch of Corporation Bank to avail benefits of this loan scheme.17 November2010

Bangalore Branch of SIRCof the Institute of Chartered Accountants of IndiaHurry - Complete yourCPE requirementsCPE Requirements for MembersRolling period of 3 yearsends on 31.12.2010All the members who are holdingCertificate of Practice (except thosemembers who are residing abroad),unless exempted, are required to:• Complete at least 90 CPE credithours in each rolling three-yearperiod of which 60 CPE credithours should be of structuredlearning.• Complete minimum 20 CPEcredit hours of structured learningin each year.All the members who are not holdingCertificate of Practice or are residingabroad (whether holding Certificateof Practice or not), unless exempted,are required to:• Complete at least 45 CPE credithours of structured/unstructuredlearning in each rolling three-yearperiod• Complete minimum 10 CPEcredit hours of structured/unstructured learning in each year.All the members (above 60 years ofage) who are holding Certificate ofPractice, unless exempted, arerequired to:• Complete at least 70 CPE credithours (structured/unstructured) ineach rolling three-year period.• Complete minimum 10 CPEcredit hours of structured/unstructured in the first year i.e.2008• Complete minimum 20 CPEcredit hours of structured/unstructured in the second andthird year i.e. 2009 & 2010.All the members (above 60 years ofage) who are not holding Certificateof Practice are required to:• Complete at least 35 CPE credithours (structured/unstructured) ineach rolling three-year period.• Complete minimum 5 CPE credithours of structured/ unstructuredin the first year i.e. 2008• Complete minimum 10 CPEcredit hours of structured/unstructured in the second andthird year i.e. 2009 & 2010.The requirements of thisStatement shall not apply to:(a) A member, for the year duringwhich he gets his Certificate ofPractice for the first time.(b) A member or class of members towhom the CPEC may in theirabsolute discretion grant full/partial exemption either specific/general, on account of facts andcircumstances of the case whichin their opinion prevent suchperson(s) from compliance withthe requirements of CPE as givenin this Statement.Further, exemption from CPE is alsoavailable on medical grounds. Forwhich the CPE Committee hasdecided as follows:1. No blanket exemption will begiven on medical grounds fromthe mandatory CPE requirementsfor members.2. Relaxation on medical groundsshould be on a temporary basisperiod of which will be decidedby the CPE Committee.3. The claimant should submit thedata regarding professionalassignments of his own and thefirm(s) in which he is a partner.4. Every member who applies forexemption from the requirementsof the Statement on medicalgrounds has to meet the followingdocumentation requirements forclaiming such exemption.5. Diseases covered under Section80DD of Income Tax Act beconsidered favourably for grantingexemption.List of Unstructured CPE learningactivities that are eligible for CPECredit.All other CPE activities, whichare not specifically covered inAppendix C to the Statement onContinuing Professional Education,shall be considered as UnstructuredCPE Activities. An indicative list isgiven below:• Web-based learning modules• Self-learning modules and courses(use of audiotapes, videotapes,correspondence courses, computerbased learning programmes)• Reading and individual homestudy• Group or bilateral discussion ontechnical issues• Acting as visiting faculty or guestfaculty at the various Universities/ Management Institutions /Institutions of National Importance• Participation in CPETeleconferencing Programmeswithout the supervision of the POU• Providing solutions toquestionnaires / puzzles availableon Web / Professional Journals• Internal Training Programmesbeing organised by firms ofChartered Accountants with sevenor more partners.For further details visit :www.cpeicai.orgNovember201018

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Bangalore Branch of SIRCof the Institute of Chartered Accountants of IndiaNovember201020