Managing Committee Chairman CA. Sreekumar Nair 9892290909 Vice Chairman CA Sameer L. Gavli 9821161072 Secretary CA. Srikant Limaye 9819455561 Treasurer CA. J. D. Tandel 9820192895 Members CA. Sanosh Sharma 9823582884 CA. Ananthram 9320433833 CA. Minaxi A. Rachchh 9820898183 CA. Nawanit Jaipuriar 9820062526 Co-opted Members CA. Sanjay Nikam 9820446329 CA. Suresh Ameria 9821368836 CA. Manoj Pandey 9322804994

Dear Members

It is my privilege to be the Chairman of Vibrant Navi Mumbai Branch. I want to thank CA Narendra Mangal, past chairman for his support and guidance to me during my tenure as Vice chairman of the branch. Let me also welcome the new team of Managing Committee who is determined to work towards development of our members and students and provide quality programmes to our members and students.

Our members will be busy with Bank Branch audit in the new financial year followed by various other professional assignment during the year. I wish every member a year full of professional opportunities and request to keep up the tradition of providing quality service to society at large. During the month of March we have organized seminars on Budget analysis and Bank branch audit which was well attended and enriched members with undated provisions.

Professional development of members is the prime object of organizing various programmes at the branch and we feel proud when our members are recognized for their in-depth knowledge and skills. Its my privilege to tell you that our Member CA J.D Tandel is a live budget analyst post state budget in Sahyadri Channel of Doordarshan and we expect such milestones from our members.

New ICAI building was inaugurated at Bandra Kurla Complex on 15th March 2013 by Honorable Minister for Company affairs Mr Sachin Pilot in a graceful presence of our President ICAI CA Subodh Agarwal, and Vice President ICAI CA K. Raghu.The New ICAI tower is a beautiful monument which is ideally located and will improve the quality services provided by our institute at western region.

With Warm Regards,

CA. Sreekumar Nair

Chairman.

Chairman’s Communication

Past Chairman’s Communication

---CA Narendra Mangal

Dear Professional Colleagues,

“Hari Om”. At the outset I would like to congratulate the entire New Managing

Committee, and CA Sreekumar Nair in particular, for taking the reins of Navi Mumbai Branch

of WIRC of ICAI.

Friends, I want to thank all of you, and in particular, my managing committee members,

past chairmen for their strong support and active participation in Branch activities. In fact, the

expansion and growth of Navi Mumbai branch is undoubtedly attributable to the efforts of

dynamic managing committee members.

When I look back to take stock of how the year has gone, I feel quite satisfied about the

overall performance of the Branch. Number of GMCS Batches, Number of CPE Programs,

Students activities including WICASA activities as well as Students Conference, Sports Events,

Foundation Day activities, and list goes on. All my predecessors, year after year, have raised

the bar of expectations about performance of the branch. The facts and figures reveal that the

Branch has done very well in all departments, during the year, as well. However, I leave it for

you to judge the branch performance, rather than me commenting upon the same.

I look forward, with the new Managing Committee, to scale new heights in days to come.

My dream is that our branch should have galaxy of speakers expert in different areas. The

branch should also be instrumental in creating more and more opportunities for CA fraternity.

We should also have representation by way of regional and central council members from our

branch. Finally, our long cherished dream of infrastructure. I am confident, of development of

next ‘ICAI Tower’ in navi Mumbai, in the near future.

Thank you very much for the confidence reposed upon me. My best wishes to the new

team once again.

With warm regards,

Yours in profession,

CA Narendra Mangal

CONGRATULATIONS Our Mentors

Office Bearers of WIRC Mumbai CA Subodh Agarwal CA K. Raghu

Chairman Vice Chairman Secretary Treasurer CA. Mangesh Kinare CA. Parag Rawal CA. Neel Majathia CA. Priti Savla

Managing Committee of Navi Mumbai Branch for the year 2013-14

CA. Sreekumar Nair

(Chairman)

CA. Sameer Gavli

(Vice Chairman)

CA. Srikant Limaye

(Secretary)

CA. J. D. Tandel

(Treasurer)

CA. Ananthram CA.Minaxi A. Rachchh

CA. Nawanit Jaipuriar

CA. Sanosh Sharma

Members & Co-opted members

CA Manoj Pandey CA Suresh Ameria CA Sanjay Nikam

FOOD FOR THOUGHT

“Don’t settle for being what you used to be or have been. Keep reaching for what you can yet become”

NAVI MUMBAI BRANCH OF ICAI

www.navimumbaica.org

FORTHCOMING EVENTS FOR THE BRANCH

DAY & DATE PROGRAMME TOPIC VENUE TIMING CPE HRS

Saturday To be announced NMSA, Vashi 4.00 pm to 2

20/04/2013 (Details of speakers and

topic 6.00 pm

given on the last page)

Saturday Domestic Transfer Pricing NMSA, Vashi 4.00 pm to 2

27/04/2013 6.00 pm

SR NO. CATEGORY ICAI -

Members

ICAI -

Students

1 CPE Annual Fees $

Rs.2,500/- NA (Members opting to pay the annual fees shall be

eligible to attend the Programmes with CPE

Hours marked$ without payment of any

additional fees)

2 Full Day Seminar Rs.1,000/- Rs. 400/-

3 Half Day Seminar Rs. 500/- Rs. 100/-

4 Study Circle Fees– per study circle

($Fees payable by Members other than opting for Rs. 200/-$ Free

payment of CPE Annual Fees)

Notes: 1> All programmed tentative and subject to change.

2> All CPE hours subject to confirmation of ICAI.

3> Please fill in the common enrolment form and register.

4> Spot registration with additional fees of Rs.50/-.

5> Other than ICAI Members/Students – fees shall be 1.5 times the above fees.

Common Enrolment form

(Please print this and Submit along with your cheque) Membership No: /Students Registration No: __________

Member in Practice: Yes / No ___________

Name: _____________________________________________________________________

Co. Name: _________________________________________________________________

Address : ___________________________________________________________________ _____________________________________________________Pin code_______________

Phone: Mobile: _____________ Office: _______________ Residence: _________

Email: ______________________________

Payment of Fees towards - programmes organised by Navi Mumbai Branch of I.C.A.I.

(Note: Fees payable are non-transferable to other members/students and/or programmes by other branches or study circles)

Cheque No: ___________ dated ___/__/______ drawn on ___________________ bank in favour of “Navi Mumbai Branch of I.C.A.I.” payable at Mumbai, enclosed.

Would you prefer more programmes on Sundays YES/NO? _______

Suggestions, if any:____________________________________________________ Signature______________________________

Courier/Mail the cheques to Navi Mumbai Branch address

Event Date Amount

CPE __/__/__ Rs. 2,500/-

Seminar __/__/__ Rs. ____ /-

Study Circle __/__/__ Rs. ____ /-

Contribution to Building Fund __/__/__ Rs. --------/-

Total Rs. _____/-

NEWS

•For the attention of the members:

Applicability of the Revised Audit Report Formats (including for bank/bank branch

audit reports) and Reporting in respect of Memorandum of Changes in Bank Audit

Reports.

Members are requested to note that the audit reports for audits of the financial

statements for periods beginning on or after 1st April, 2012 are to be issued in the

revised auditor’s report format, as prescribed in the Revised Standard on Auditing

(SA) 700, forming an opinion and reporting on financial statements. The text of the

revised auditor’s report appears in the appendix to the said SA and can be

downloaded from the website of the Institute of Chartered Accountants of India at

URL: http://220.227.161.86/17874sa700aanx1.pdf.

•Professional opportunities for Members:

Empanelment of auditors by the Co-operative Department, Maharashtra State:

The Co-operative Department, Maharashtra State is preparing new panel of Co-

operative auditors. All interested members are informed to visit

www.sahakarayukta.gov.in for application forms & other details.

Notice inviting Tender has been issued by Rural Electrification Corporation Limited

for empanelment as lenders Financial Advisor for Power Generation Projects.

Detailed announcements is available on website of PD Committee (www.pdicai.org).

KNOWLEDGE PORTAL DIRECT TAX 1. TDR beneficiaries evading Income Tax The transfer of development rights (TDRs) may have not met with the anticipated success in the city, but there seems to be a section that has been reaping benefits — albeit discreetly. Premium earned on the sale of these TDRs and subsequent evasion of income tax has now come under the scanner of Income Tax Department officials, who with the help of Department of Stamps and Registration and Bruhat Bangalore Mahanagara Palike (BBMP) have caught the violators, forcing them to cough up the tax on the premium earned. (Source: www.pdicai.org) 2.CIT can’t exercise revisionary powers on debatable issues Where disallowance of expenditure for exempted income was debatable and order of Assessing Officer could not be held as unsustainable, revisionary powers could not be exercised (High Court of Delhi – Commissioner of Income Tax V/s DLF Ltd.) 3. Respite to Taxpayers: AO’s to follow mandamuses of Delhi HC before making adjustment of refund As per Hon'ble Delhi High Court's Order dated 14-3-2013, the Department requires to follow the procedure prescribed under section 245 before making any adjustment of refund payable by the CPC, Bengaluru. Accordingly, the assessee must be given an opportunity to file response or reply and the reply will be considered and examined by the Assessing Officer before any direction for adjustment is made. The process of issue of prior intimation and service thereof on the assessee will be as per the law. The assessee will be entitled to file their response before the Assessing Officer mentioned in the prior intimation. The Assessing Officer will thereafter examine the reply and communicate his findings to the CPC, Bengaluru, who will then process the refund and adjust the demand, if any payable. 4. Pay income tax dues to get penalty waiver : Finance minister P Chidambaram Finance minister P Chidambaram has said the income tax department may waive penalty if non-payers volunteer to clear their dues. "The tax authorities can take a benign view and waive the penalty," Chidambaram said on Thursday. "They have done so in numerous cases in the past. This is your opportunity to file your returns, pay your tax and interest, if any, and apply for waiver of penalty." The minister urged assessees to pay advance tax on time. "To those who have not filed their income tax (I-T) returns so far, either for the current year or previous years, I have one simple message-it behoves you to file returns; it behoves you to pay advance tax by tomorrow," Chidambaram said.

1. Service tax : Ignorance of law is no excuse;

hence, assessee's plea of unawareness about

liability to service tax cannot avoid invocation of

extended period of limitation and imposition of

penalties.[2013] 31 taxmann.com 38 (Chennai -

CESTAT)P. Raman v/s Commissioner of Central

Excise

2. In case of DTH services, entertainment tax is

leviable on entertainment derived from content

and service tax is leviable on service of enabling

flow of content through DTH system; both taxes

can be levied on gross charges collected. [2013]

31 taxmann.com 128 (Madras) HIGH COURT OF

MADRAS Tata Sky Ltd .v. State of Tamil Nadu*

3. 'Rent-a-cab service' for transporting employees

between factory and their residential locations

and air travel agent services for air travels

undertaken by company's executives for

business purposes, are input services [2013] 31

taxmann.com 15 (Bangalore - CESTAT) EMCON

Technologies India (P.) Ltd. v. Commissioner of

service tax.

4. Retrospective amendment in section

65(105)(zzzz) by Finance Act, 2010 levying

service tax on renting of immovable property,

per se, is constitutionally valid [2013] 31

taxmann.com 16 (Madhya Pradesh) HIGH

COURT OF MADHYA PRADESH R.R. Ahuja

.v.Union of India*

5. Consideration received for assignment of toll

collection rights, prima facie, amounts to

franchise service, as assignee renders toll

collection service in exercise of representational

right granted by assignor. 2013 31

taxmann.com36 Banglore Cestat Navayuga Engg

company Ltd v Commissioner of C excise-

Vishakapatnam.

SECTION 70 OF THE FINANCE ACT, 1994, READ WITH

RULE 7 OF THE SERVICE TAX RULES, 1994 - FURNISHING

OF RETURNS - EXTENSION OF DATE OF SUBMISSION OF

FORM ST-3 FOR PERIOD FROM 1-7-2012 TO 30-9-2012

ORDER NO. 1/2013-ST [F.NO.137/99/2011-ST], DATED

6-3-2013

In exercise of the powers conferred by sub-rule(4) of

rule 7 of the Service Tax Rules, 1994, the Central Board

of Excise & Customs hereby extends the date of

submission of the Form ST-3 for the period from 1st

July, 2012 to 30th September, 2012, from 25th March,

2013 to 15th April, 2013.

The circumstances of a special nature, which have

given rise to this extension of time, are as follows:

(a)The Form ST-3 is expected to be available on ACES around 20th March, 2013. (b)This will result in all the assessees attempting to file their returns in a short time period, which may result in problems in the computer network and further delay and inconvenience to the assessees.

HOLDING PERIOD FOR THE PURPOSE OF CAPITAL GAINS UNDER IT ACT -CA Satish V Shanbhag

ISSUE: The assessee has entered into an agreement for purchase of flat and has obtained the possession thereof after 4 years from the date of agreement. Assessee sells the flat within 1 year from the date of obtaining the possession. The issue is, whether the holding period for the purpose of computation of capital gains be reckoned from the date of agreement or from the date of obtaining possession.

AUTHOR’S VIEW: •As per Sec. 2(42A), “short term capital asset” means a capital asset held by an assessee for not more than 36 months immediately preceding the date of its transfer. Accordingly, “long term capital asset” means the capital asset held for more than 36 months. In other words, to claim the benefit of long term capital gains, it is necessary to hold the capital asset for more than 36 months. •Sec. 2(14) defines “capital asset”. Capital asset means property of any kind held by an assessee whether or not connected with his business or profession. (subject to certain exceptions which are not relevant for our discussion) •From the definition of capital asset it should be noted that capital asset is a very wide term and therefore anything that can be described as a ‘property’ is included within the definition of capital asset. •Where an assessee enters into an Agreement for Sale or even accepts an Allotment letter, he gets a “Right to Conveyance” the property. Infact he also acquires a bundle of various other rights such as “Right to specific performance”, “Right to Sue”, etc. All these rights can be described as ‘property’ and consequently be treated as capital asset. •In the light of above propositions and the provisions of law, it can be argued that in the instant case where the assessee has entered into an agreement for purchase of flat and has obtained the possession thereof after 4 years from the date of agreement, the holding period be counted from the date of entering into the Agreement for sale. This is because on entering into the Agreement for sale, the assessee has acquired the capital asset namely “Right to acquire the flat”. Further, since the holding period of such an asset is more than 3 years, the assessee is entitled for the benefit of long term capital gains. Needless to mention that the amount paid to the builder each year, will have to be separately indexed considering the CII applicable to each year of payment. •Department may however argue that, what the assessee has sold is a “residential flat” and not the “right to conveyance”. Therefore, since the residential flat is sold within 1 year from the date of possession, the capital gains arising in this case be treated as short term capital gains. •Here again it is possible to argue that the Department’s interpretation of law is misplaced. This is because, real estate is a bundle of various rights. On entering into an Agreement to purchase, the assessee gets various rights such as “Right to Conveyance”, “Right to specific performance”, “Right to sue”, etc. Possession of the flat is an additional right which is given to the assessee. ‘Possession’ does not extinguish the original right but it is an additional right flowing from the Agreement to purchase.

Accordingly, since the Right to acquire is the first right acquired among the bundle of rights, which is held for more than 3 years, the capital gains be treated as long term capital gains.

Continued…..

Reliance may be placed on the following judicial pronouncements: CIT v/s Vimal Lal Chand Mutha [1991] 187 ITR 613

In this case, H’ble Bombay High Court has held that where an agreement to purchase the property is first entered into, and the physical possession of the property is obtained at a later date, the holding period be reckoned from the date of Agreement to purchase.

HH Acharya Swami Ganeshdasji. 119 Taxmann 146 Mum. In this case it was held that date of Allotment letter is relevant since assessee has obtained the right to conveyance from the date of Allotment letter.

ACIT vs Sharad Thadani Property is a bundle of Rights and has to be given widest meaning. ‘Possession’ of the property given to appellant in 2008 is an ‘Additional Right’ to the ‘Right to Conveyance’ originally held by the assessee flowing from the Lease cum Sale Deed. ‘Possession’ does not extinguish the original right but it is an additional right given which is a part of bundle of rights to the capital asset. As per Board Circular No. 471 dt. 15.10.1986, ‘date of allotment of a flat’ in a building under construction and delivery of flats after construction under Self Financing Scheme of Delhi Development Authority (DDA) is considered as the date of acquisition of the flat. Further, Circular No. 672 dt. 16.12.1993 has further extended this benefit to other institutions / co-operative societies.

CONCLUSION: In view of the legal propositions and judicial pronouncements, it is possible to argue that where the assessee has held the Right to Conveyance under an Agreement for Sale (or under an Allotment letter accepted) for more than 3 years, even though the holding period after the date of possession is less than 3 years, the capital gains arising from transfer in such a case is long term capital gain. It is however to be noted that since the claim of the assessee is based on the decision of Hon. ITAT and High Court, the risk of litigation is not ruled out.

DEPARTMENT OF SALES TAX

Maharashtra Govt Budget Proposals 2013-14

Revenue receipts estimate at Rs 1,55,986.95 crore

Revenue expenditure estimate at Rs 1,55,802.57 crore

Revenue surplus budget of Rs 184.38 crores

Proposed Amendments

Sr. No. Particulars F Y 2013/14 F Y 2012/13

Proposed Amendments in MVAT Act 2002

1 Tax rate of gold, silver and their jewellery 1.10% 1%

2 Sugarcane purchase tax 5% 3%

3 Tax on cigarettes 25% 20%

4 Tax on beedi 12.50% 5%

5 Unmanufactured tobacco to be taxed 12.50% NIL

6 Textile for industrial use 5% NIL

7 Tax on certain powder, cubes and tablets from which non alcoholic beverages are prepared 12.50% 5%

8 Tax on Paver blocks 12.50% 5%

Editor: CA Sreekumar Nair - (M) 9892290909

If undelivered Return to To,

ICAI, NAVI MUMBAI BRANCH.

F/2,C-3, 2nd Floor,

Near Vijaya Bank

Sector 10, Vashi,

Navi Mumbai 400-703.

(By CA. JD Adyapak)

GALLERY OF EVENTS

Bank Audit Seminar Seminar on latest Budget