I.  What's New Today : 

1. STAXCIR-146-11-Audit of the accounts of M/s Bharat Sanchar Nigam Ltd, Tiruchirapalli – Issue of eligibility or otherwise of Notification No.03/1994 - ST dated 30.6.1994 in case of telephone services for local calls provided through Village Panchayat Telephones  (Click for detail)

2. Exposure Draft of Guidance Note to Revised Schedule VI to the Companies Act, 1956 (Comments to be received by 5th October 2011) - (21-09-2011) (Source: icai.org)  (Click for detail)

3. ICAI Invites Suggestions for Pre-Budget Memorandum-2012 (Source: icai.org)  (Click for detail)

4. Public Notice (Department of Trade & Taxes )  (Click for detail)
    

5. Draft on new SEZ rules soon;relook at land ceiling norms: Government  (Click for detail)

6. Advance tax mop-up from top 100 cos grows 9.9% in Q2  (Click for detail)

7. RBI/2011-12/193 - Access criteria for payment systems  (Click for detail)

8. RBI Circular No. 12 - Savings Bank account maintained by residents in India – Joint holder – liberalization  (Click for detail)

9. RBI Circular No. 13 - NRIs/PIOs holding NRE/ FCNR(B) accounts jointly with Indian resident close relative – liberalization  (Click for detail)

10. RBI Circular No. 14 - Foreign Investments in India - Transfer of security by way of gif–Liberalisation  (Click for detail)
     

II.  Today's Tenders Info. :       

1. Office of the Official Liquidator
   New Delhi
   CLICK FOR DETAIL

2. National Housing Bank
   New Delhi
   CLICK FOR DETAIL

3. Nagar Parishad
   Kaushambi, Uttar Pradesh
   CLICK FOR DETAIL

 

III.  Judicial Pronouncements :

1.     THE INSTITUTE OF CHARTERED ACCOUNTANTS OF INDIA Vs. THE DIRECTOR GENERAL OF INCOME TAX (EXEMPTIONS), DELHI & ORS., WRIT PETITON (CIVIL) NO. 1927 OF 2010, DATE OF DECISION : 19TH SEPTEMBER 2011, DELHI HIGH COURT

The most material and relevant words in the proviso are “trade, business or commerce”. The activities which are undertaken by the institute/person should be in the nature of trade, commerce or business or any activity of rendering any service in relation to any trade, commerce or business. The three words “trade”, “commerce” or “businesses” have been interpreted by the Supreme Court and other courts in various decisions. The word “trade” was elucidated in the case of State of Punjab v. Bajaj Electricals Ltd., (1968) 2 SCR 536; The Supreme Court in Khoday Distilleries Ltd. v. State of Karnataka, (1995) 1 SCC 574

“Trade”, as per the Webster‟s New Twentieth Centuary Dictionary (2nd edition), means amongst others, “a means of earning one‟s living, occupation or work. In Black‟s ,Law Dictionary, trade means a business which a person has learnt or he carries on for procuring subsistence or profit; occupation or employment, etc.
The meaning of “commerce” as given by the Concise Oxford Dictionary is “exchange of merchandise, specially on large scale”. In ordinary parlance, trade, and commerce carry with them the idea of purchase and sale with a view to make profit. If a person buys goods with a view to sell them for profit, it is an ordinary case of trade. If the transactions are on a large scale it is called commerce. Nobody can define the volume, which would convert a trade into commerce. For the purpose of the first proviso to section 2(15), trade is sufficient, therefore this aspect is not required to be examined in detail.

While construing the term business for the said Section, the object and purpose of the Section has to be kept in mind. We do not think that a very broad and extended definition of the term „business is intended for the purpose of interpreting and applying the first proviso to Section 2(15) of the Act to include any transaction for a fee or money. An activity would be considered “business” if it is undertaken with a profit motive, but in some cases this may not be determinative. Normally the profit motive test should be satisfied but in a given case activity may be regarded as business even when profit motive cannot be established / proved. In such cases, there should be evidence and material to show that the activity has continued on sound and recognized business principles, and pursued with reasonable continuity. There should be facts and other circumstances which justify and show that the activity undertaken is infact in the nature of business. The test as prescribe in Raipur Manufacturing Company (supra) and Sai Publications Fund (supra) can be applied.

ICAI Accounting Research Foundation (ICAI-ARF, for short) has been incorporated by the petitioner institute with an objective to impart training, to promote knowledge, learning and education, and to understand various fields relating to the profession of accountancy. It has been stated that ICAI-ARF is a company and an institution enjoying exemption under Section 10(23C)(iv) read with Section 11 of the Act. The petitioner- institute maintains that there has been no violation of Section 13, Section 11(5) or the third proviso to Section 10(23C)(iv) of the Act. These facts and aspects have not been examined and considered in the impugned order dated 19th May, 2009. There have been subsequent developments, which are material and relevant. As we are setting aside the order, the Competent Authority will go into the said aspect afresh and examine the contentions raised by the assessee.

(Please click here for judgment) 

  

2.  DIRECTOR OF INCOME TAX (EXEMPTIONS) Vs. THE INSTITUTE OF CHARTERED ACCOUNTANTS OF INDIA,  I.T.A. NO. 869/2011, DATE OF DECISION : 19TH SEPTEMBER, 2011. DELHI HIGH COURT

The purpose and object to do business is normally to earn and is carried out with a profit motive; in some cases the absence of profit motive may not be determinative. The appellant has given no such finding as far as the activities of the institute are concerned. The CIT-appellant without examining the concept of business has held that the institute was carrying on business as coaching and programmes were held by them and a fee is being charged for the same. On the basis of the findings recorded in the order dated 29th March 2010, under section 263 of the Act, it is not sufficient to hold that the institute is carrying on business. In these circumstances, we do not think that the order passed by the appellant under Section 263 of the 1961 Act can be sustained and was, therefore, rightly upset and set aside by the Tribunal.

(Please click here for judgment) 

 

Key of Success :

"Discover what the real goals and dreams are..."

"Practice patience and persistence in the life... "

  

Thanks for your valuable time

   

"Voice of CA"  

  
CA. Sanjay Kumar Agarwal
Founder - Voice of CA 
Mob : 9811080342, agarwal.s.ca@gmail.com      
   
CA. Sidharth Jain, Co-Moderator
sidhjasso@yahoo.com 
  
CA. Mukesh K Bansal, Co-Moderator-FEMA 
mukbansal80@gmail.com