CA - Articles - Announcement regarding transfer

Transfer of Articles - IMPORTANT ANNOUNCEMENT

The following decisions taken by the Council of the Institute are brought into force immediately for compliance by the Students / Members concerned. It is advised that required compliance be made by the concerned students / members. It may please be noted that non-compliance will be viewed seriously and proceeded against accordingly.

The coaching classes shall not continue after 9.30 a. m. or start before 5.30 p.m. so as to enable the articled/audit assistants to concentrate wholly on practical training.


Members of the Institute who are engaged in coaching be advised not to undertake coaching between 9.30 a.m. to 5.30 p.m.


An articled assistant should undergo practical training in accordance with the guidelines of the Institute between 10:30 a.m. and 5:30 p.m. During the period an articled assistant shall not be permitted to attend colleges/other institutions for graduation or any other course.


Every articled/audit assistant shall submit once in a year a specific declaration duly counter-signed by the Principal to the effect that the he is regularly attending training and his college hours do not clash with his articles timings and that no coaching is undertaken by him between 9.30 am and 5.30 pm on any working day. In the event of breach of this guidelines and not taking permission as required, the articles already undergone shall be de-recognised for such period as the Institute may decide.


Every articled/audit assistant shall be required to maintain mandatorily the Work Diary in the Form to be prescribed by the Board of Studies.


The Institute to call for at random training report alongwith attendance record and stipend details and also Work Diary maintained by articled/audit assistant from any member/firm in respect of any articled assistant at any point of time during the period of practical training for verification.


In case an articled assistant is found not undergoing articles in the manner prescribed he shall be debarred from appearing in the exam upto 3 consecutive exams besides cancellation of such period of articles. The concerned member who allowed such an articled assistant be subject to punitive action besides withdrawing either partly or fully his eligibility to train articled assistant. In Peer Review the Reviewer be required to verify whether training is imparted to the articled assistant in the manner prescribed.


No request for termination of articles is entertained from any articled assistant in general and more particularly during the first six months and also during the last twelve months of articles except as provided in the Regulations. In the event of termination, his articles shall not be registered in the same city.


No request of an articled assistant for termination (transfer) of articleship shall be considered unless his/her working parent(s) is/are transferred from the city/place where the articled assistant is receiving training to another city and a copy of transfer order / proof is submitted to the principal in proof thereof. On such termination the articled assistant concerned shall join articles training in and around the place of posting of his/her parent(s) and shall not re-register articles in the same city or within 50 Kms radius of the city where he/she has undergone articles prior to such termination.


If the articled assistant is not able to serve the articleship for specified genuine medical reasons thereby opting to discontinue the CA course for a period of at least three months, the termination of articles be permitted, provided that the medical grounds are such that warrant termination of Articleship.


In the event of misconduct involving moral turpitude, gross negligence or unsatisfactory performance of the articled assistant, his articles shall be liable to be terminated by his principal besides being cancelled or extended for such period as may be decided by the Institute. Board of Studies to decide and enumerate the acts constituting misconduct.


Termination of articles be permitted on such other justified circumstances as may be deemed genuine by the Council.


While forwarding the form no. 109 the principal shall state specifically the clause (the relevant clause mentioned above) under which the articles have been terminated.



Secretary
27th March, 2009

How-are Income Tax returns selected for Scrutiny

How-are IT returns selected for Scrutiny


Procedure for selection of cases for 'Scrutiny' for non-corporate assessees

In super cession of earlier instructions on the above subject the Board hereby lays down the following procedure for selection of returns / cases of *Non-Corporate Assessees* for scrutiny during the financial year i.e. 2007-08.

2. The following categories of cases shall be compulsorily scrutinized; -
i) All assessment pertaining to search and seizure cases.

ii) All assessment pertaining to surveys conducted u/s 133A of the Income tax Act.

iii) [1]All returns where deduction claimed under Chapter VIA of the Income tax Act is Rs.25 lakhs or above in stations other than the cities on computer network.

iv) All returns, including those of non-residents, where refund claimed is Rs.5 lakhs or above in stations other than the cities on computer network.

v) (a) All cases in which the CIT (Appeals) or ITAT has confirmed an addition / disallowance of Rs.5 lakhs or above or if the assessee has conceded on addition in any proceeding Assessment year and Identical issue is arising in the current year. But if the issue involves a substantial question of law, the cases may be picked up for scrutiny irrespective of the quantum of tax involved. However, if the addition has been deleted by a superior appellate authority and the Department has accepted that decision, the case need not be taken up for scrutiny.

(b) All cases in which an appeal is pending before the CIT (Appeal) against an addition / disallowance of Rs.5 lakhs or above, or the department has filed an appeal before the ITAT against the order of the CIT (Appeal) deleting such an addition / disallowance and an identical issue is arising in the current year. However, as in (i) above, the quantum ceiling may not be taken into account if a substantial question of law is involved.

(vi) All returns filed by statutory bodies, marketing committees and other authorities assessable to income tax.

(vii) All cases of banks and Non-banking financial institutions with deposits of Rs.5 crores and above.

(viii) Cases of universities, educational institutions, hospitals, nursing homes and other institutions for rehabilitation of patients (other than those, which are substantially financed by the Government), the aggregate annual receipts (including donations credited to the corpus / any other fund) of which exceed Rs.10 crores in Delhi, Mumbai, Chennai, Kolkota, Pune, Hyderabad, Bangalore and Ahmedabad and Rs.5 crores in other places (Ref. S 10 (23c) & Rule 2 BC)

(ix) All cases where exemption is claimed under section 11 of Income Tax Act and the gross receipts (including donations credited to the corpus / any other fund) exceed Rs. 5 crores in Delhi, Mumbai, Chennai, Kolkata, Pune, Hyderabad, Bangalore and Ahmedabad and Rs.1 crores in other Places.

(x) (a) All cases where total value of International Transactions (as defined u/s 92 B of the Income tax Act) exceed Rs.15 crores)

(b) In all other cases where the Transfer Pricing Audit carried out in the earlier year had led to an adjustment / addition to the total income.

(xi) All cases of stockbrokers and commodity brokers as well as their sub brokers where brokerage received is disclosed at Rs.1 crore or above.

(xii) All cases of stockbrokers and commodity brokers as well as their sub brokers where there are claims of bad debts of Rs.5 lakhs or more.

(xiii) All cases of professionals with gross receipts of Rs.20 lakhs or more if total income declared is less than 20% of gross professional receipts.

(xiv) All cases of deductions under sections 10 A / 10 AA / 10BA / 10 B of the I.T. Act exceeding Rs.25 lakhs.

(xv) All cases of contractors (excluding transporters) whose gross contractual receipts exceed Rs. 1 crores if total income declared from contract work is less than 5% of gross contractual receipts.

(xvi) All cases of builders following project completion method. [This would generally apply in cases of industries enjoying tax holidays]

(xvii) All cases in which fresh capital introduced during the year exceed Rs.50 lakhs in Delhi, Mumbai, Chennai, Kolkata, Pune, Hyderabad, Bangalore and Ahmedabad and Rs.10 lakhs in other cities.

(xviii) All cases in which new unsecured loan introduced during the year exceed Rs.25 lakhs.

(xix) All cases in which deduction u/s 80IA(4), 80 IB, 80IC, 80JJA, 80JJAA, 80LA, 10 (21), 10(22B), 10(23A), 10(23B), 10(23C), 10 (23D), 10 (23EA), 10 (23FB), 10 (23G), 10(37), 10 A, 10AA, 10B, or 10BA of the I.T. Act is claimed for the first time.

(xx) *All cases in which loss from house property is more than Rs.2,50,000/-

(xxi) *All cases in which investment in property is more than five times the gross receipts (i.e. purchase of property (008 from AIR) / (Gross Total Income (746) + Agricultural Income (762) + Income Claimed exempt (125)>5)

(xxii) *All cases in which sum of short term capital gains u/s 111A and long term capital gain is more than Rs 25 lakhs.

(xxiii) *All cases in which sale of property has been shown as per AIR return but no capital gains have been declared in the return of Income.

(xxiv) *All cases in which commission paid is more than Rs. 10 lakhs

(xxv) *All cases having business of real estates with gross turnover exceeding Rs.5 crores.

(xxvi) *All cases having business of hotels/tour operations with gross turnover exceeding Rs. 5 crores if net profit shown is less than 0.05%.

(xxvii) *All cases in which total depreciation claimed at the rates of 80% and 100% is more than Rs.25 lakhs.

(xxviii) All cases in which net agricultural income is more than Rs 10 lakhs.

(xxix) All cases covered by retrospective amendment in section 80 IA of the I.T. Act, 1961 brought by the Finance Act, 2007 i.e. all persons who merely executive the civil construction work or any other works contract entered into with the undertaking or enterprise referred to in Sec 80 IA of I.T Act 1961.

NOTE: If a case has been assessed earlier under scrutiny for at least 2 A.Y.s but in each of the immediately proceeding two years assessed u/s 143(3) of the I.T. Act, total additions or disallowances made / sustained in appeal are less than 5 lakhs in Delhi, Mumbai, Chennai, Kolkata, Pune, Hyderabad, Bangalore and Ahmedabad and less than Rs. 1 lakhs in other places then such a case should be excluded from compulsory scrutiny under clauses (ii). (vi), (vii), (viii), (ix), (x), (xii), (xiii) Provided that the above exclusion clause shall not apply in cases involving substantial question of law.

3. In addition to above, where the CCIT / DGIT (International taxation) / DGIT (Exemptions) , on the matter having been brought to his notice by an authority below, is satisfied that the case needs to be taken up for scrutiny, the CCIT / DGIT (International taxation)/DGIT(Exemptions) , for reasons to be recording in writing, may approve the selection of the case for scrutiny.

4. The CCIT / DGIF (International Taxation) / DGIT (Exemptions) may issue suitable guidelines for reducing / increasing the number of cases selected under specific clauses of para 2, for proper management of the workload as well as to avoid large scale transfer of cases from one jurisdiction to another.

5. All returns field in response to notice issued U/s 148 of the I.T. Act shall be selected for scrutiny.

6. In addition to above, selection of cases out of returns processed on AST will be made through a Computer Assisted Scrutiny System (CASS). Separate instructions in this regard will be issued by the DIT (Systems).

7. List of cases up for scrutiny during each month shall be submitted by the Assessing Officer to the CIT and Addl. CIT, Range by 15th of the following month and shall also be displayed on the Notice Board of the office.


[1] Selection of cases under these criteria shall not be done manually in the cities on computer network but through Computer Assisted Scrutiny System (CASS), for which necessary provisions have been made in the CASS software being issued by Directorate of Income tax (Systems)

Selection of cases under these criteria in the cities on the Computer network would be made through Computer Assisted Scrutiny Systems (CASS) in respect of cases where audit report U/s 44 AB has been filed. In all other cases in threes cities and in all cases in cities not on the Computer Network, the selection would be made manually.

Extracted from Department of Revenue, Govt. of India.

UPA IS BACK !!!! INDIA DECIDES

The world's largest democracy in the world's biggest elections has given its mandate that it is the Congress which will be forming the next government in India.

SINGH IS KING
The Congress has led the UPA to win the 15th Lok Sabha elections yet again and Prime Minister Manmohan Singh has become the second prime minister after Jawaharlal Nehru to win the elections second time in a row.
The results of the elections have been a pleasant surprise for the Congress and the UPA as hardly anyone would have expected the results to be so decisive with the BJP considered to a strong contenders this time.
I need not highlight my personal views which are to the contrary and results have been as expected for me.
The stability and strength of Sonia, political decency and image of Manmohan Singh and the youth appeal of Rahul has managed the Congress to bag more seats than expected. The just in time pre-poll strategy of Rahul Gandhi to field all political parties possible and an attempt to acquire good political image also seems to have worked for the Congress.

Where did BJP go wrong?
The individualistic approach of the BJP is said to have led to its loss. L.K. Advani's desperation to become the Prime Minister since the time of AB Vajpayee was seen as to much to as from the people. Even the election campaign projected Advani as indeed the only candidate from the BJP.
The last minute projection of Narendra Modi as the Prime Ministerial candidate also cost the BJP dear.
Sources say that the absence of AB Vajpayee was a crucial factor for the loss of already weak BJP.

LEFT out
The Left, especially the CPM has been left out clearly and the Congress will not need its support to form the next government. In fact, Left lost most of its territory in West bengal and Kerala. The All India Trinamool Congress (TMC) led by Mamata Banerjee was considered to be a strong party in West bengal after the Panchayat elections, Singur and Nandigram cases. However, it has significantly exceeded expectations by sweeping West Bengal off Left.
It is now high time for the CPM to work hard in case it wants to retain its over three decades of rule in West Bengal.

Nitish does the trick
The Bihar Chief Minister Nitish Kumar has been in the news lately for all the good reasons. In fact even Rahul Gandhi went on record praising him for his work in Bihar in the last 5 years. He has done it again and it is now clear that leaders like Lalu and Paswan are no more the kings of Bihar.
Sources say, that Lalu is expected to remain in the new cabinet to be formed by the prime minister.

Cabinet - the next battle
With the new cabinet to be formed, PM Manmohan Singh's problems seems to be far from over. With an already strong cabinet and a ceiling on the number of cabinet ministers, he would have a tough time dealing with new allies like the Trinamool Congress while assigning departments in the cabinet. With Lalu set to remain in the cabinet and Mamata Banerjee being the Railway Minister during the Vajpayee's government, shuffling ministries would be a battle to be fought.
To add to the woes, Dr. Singh has expressed his wish to include rahul Gandhi in the cabinet.
But given the abilities of Dr. Singh and the support of the strong Sonia Gandhi, he is expected to fight it out smoothly enough.

Effect on the Markets
With the decisive results of the elections, the markets are expected to be very positive on Monday and in the days to come. The NIFTY is expected to touch 4000 mark on Monday itself.
The stable position of the Inflation, companies reporting positive profits and growing sales, good expected monsoon and a stable government seems to show very positive signs for the markets and the economy.

For details of the Results of the elections, please visit the link:
Election Results
Party wise trends
Statewise trends

4 Things to Look for in an Investment

4 things to look for in an investment


New investors are often interested in purchasing a company's stock but are not sure where to begin. These four characteristics should serve as helpful guidelines in your search for a good investment.

1. What is the price of the entire company?When doing research, it is important that you look at more than just the current share price - you need to look at the price of the entire company. The "cost" of acquiring the entire corporation is called market capitalization (or market cap for short) and is frequently referred to by financial professionals. In short, the market cap is the price of all outstanding shares of common stock multiplied by the quoted price per share at any given moment in time. A business with one million shares outstanding and a stock price of $50 per share would have a market cap of $50 million.
This market capitalization test can help keep you from overpaying for a stock. Consider the case of eBay and General Motors during the heyday of the Internet era. At one point during the boom, eBay had the same market cap as the entire General Motors Corporation. To put that into perspective, in fiscal 2000, General Motors made $3.96 billion dollars in profit, while eBay made only $48.3 million (not including stock option expense!). Yet were you to buy either one, you would have had to pay the same amount. It is almost unbelievable that any sane investor would pay the same price for both companies but the general public was seduced by visions of quick profits and easy cash.

Another useful tool to help gauge the relative cost of a stock is the price to earnings ratio (or p/e ratio for short). It provides a valuable standard of comparison for alternative investment opportunities.


2. Is the company buying back shares?One of the most important keys to investing is that overall corporate growth is not as important as per-share growth. A company could have the same profit, sales, and revenue for five consecutive years, but create large returns for investors by reducing the total number of outstanding shares.
To put it into simpler terms, think of your investment like a large pizza. Each slice represents one share of stock. Would you rather have part of a pizza that was cut into ten slices or one that was cut into eight slices? The pizza that was only cut into eight parts will have bigger slices with more cheese and toppings.

The same principle is true in business. A shareholder should desire a management that has an active policy of reducing the number of outstanding shares if alternative uses of capital are not as attractive, thus making each investor's stake in the company bigger. When the corporate "pie" is cut into fewer pieces, each share represents a greater percentage ownership in the profits and assets of the business. Tragically, many managements focus on domain building rather than increasing the wealth of shareholders.


3. What are your reasons for investing in the company?Before you purchase stock in a company, you need to ask yourself why you are interested in investing in that particular opportunity. It is dangerous to fall in love with a corporation and buy it solely because you feel fondly for its products or people - after all, the best company in the world is a lousy investment if you pay too much for it.
Make sure the fundamentals of the company (current price, profits, good management, etc.) are the only reason you are investing. Anything else is based on your emotions; this leads to speculation rather than intelligent investing. You have to remove your feelings from the equation and select your investments based on the cold, hard data. This requires patience and the willingness to walk away from a potential stock position if it does not appear to be fairly or undervalued.


4. Are you willing to own the stock for the next ten years?If you aren't willing to buy shares in a company and forget about them for the next ten years, you really have no business owning those shares at all. The simple but painful truth of this is evident on Wall Street every day. Professional money managers attempt to beat the Dow Jones Industrial Average, which is a collection of 30 largely unmanaged stocks. Year after year, they fail to do this. It seems impossible that a portfolio managed by the best minds in finance can't beat an unmanaged portfolio of long-term stocks held indefinitely.
The guaranteed way to success has historically been to select a great company, pay as little as possible for the initial stake, begin a dollar cost averaging program, reinvest the dividends and leave the position alone for several decades.

The original article can be found on:http://beginnersinvest.about.com/cs/newinvestors/a/040901a.htm

Seven Questions to ask before Investing

Seven Questions to ask before Investing
When putting together a portfolio of companies, there are seven basic questions that every investor should ask. The answers can help uncover competitive strengths and weaknesses, providing a better understanding of the economics and market position of the business.

1. What are the sources of the company’s cash flows?John Burr Williams taught us that the value of any asset is the net present value of its discounted cash flows. Before the investor can even begin to value a business, he has to know what is generating the cash. It is important to be specific and avoid making assumptions.
Take Coca-Cola, for example. Billions of people across the world are familiar with Coke’s products. When you see it on the shelf of your local grocery store, you may have concluded that it was the Coca-Cola Company that sold the bottled goods to the grocer. In reality, a look at the most recent 10K reveals that, although the company does sell some finished beverages, almost all of its revenue is derived from the sale of “beverage concentrates and syrups” to “bottling and canning operations, distributors, fountain wholesalers and some fountain retailers.” In other words, it sells the concentrate to bottlers, the largest being Coca-Cola Enterprises (a separately traded public company). These bottlers create the finished product, shipping it to your local store. It may seem like a small distinction seeing that Coke’s ultimate success depends upon the products sold in stores and restaurants; approached from another angle, however, and the investor can quickly surmise how vitally important the relationship between Coke and it’s bottlers is to the bottom line.


2. How much cash is generated by the business and when?Once the investor have has identified the sources of cash in a business, he must estimate the amount and timing of those cash flows. A company that generates $1,000 today may be worth more than one that generates $30,000 in fifty years because of the time value of money.

3. Are the cash flows sustainable?There was a time when horse-and-carriage manufacturers and streetcar companies were considered blue chip stocks on Wall Street. The long history of industry profitability led many investors and analysts to believe that these businesses would always be solid as a rock. Those who were astute, however, realized that past history was of no value in projecting future cash flows due to a shift in the competitive landscape arising from the advent of the automobile.
One of the ways to evaluate the sustainability of cash flows is to examine the barriers of entry for the market or markets in which the company operates. It is going to be much more difficult for a competitor to enter a business which requires hundreds of millions of dollars in startup capital than it is for a retailer, which can be opened for a miniscule fraction of the cost (e.g., there are very few entities in the world that could start an airplane manufacturer to go head-to-head with Airbus or Boeing, but you and your friends could probably gather the capital necessary to lease a space at the local mall and start your own business).


4. How much capital does the business require to operate?Some businesses require more capital to generate one dollar of profits than others. A steel mill requires huge investments in property, plant and equipment and then produces a product that is a commodity. An advertising firm, on the other hand, requires very little capital expenditure to keep the business going, generating tons of cash for the owners relative to investment. The less capital a business requires to run, the more attractive it is to an owner.

5. Does management have a shareholder-friendly orientation?
The way management treats shareholders is the single most qualitative determinant of success. A CEO that is willing to push for share repurchases when a company’s stock has fallen rather than acquire another business is much more likely to create wealth than one who is bent on expanding the empire.

6. Are management’s actions consistent with what they say in their public communications?If management has stated in the last three annual reports that debt reduction is the most important priority, yet they have engaged in multiple acquisitions or started multiple new businesses, they are not being honest. As a business owner, you only want to be in partnership with those whose actions match their promises.

7. Is the price attractive?Price is the absolute determinant of return. A disciplined investor will find company ABC attractive at $10, but not at $12. A business generating $5 in profit per year is an excellent buy at $20 per share; the earnings yield is 25%. The exact same business sold at $200 per share, however, is only boasting an earnings yield of 2.5% - half the rate available on risk-free United States treasuries! Even if a high growth rate was expected, it is lunacy to acquire the stock at the latter price.


The original article can be found on:http://beginnersinvest.about.com/od/stocksoptionswarrants/a/aa012305.htm