Efforts is pleased to announce that we have arranged career guidance seminar for commerce students on 16th february, 2009 (monday) at Ambedkar Hall, Sector- 12 at 4.00 pm.
Efforts will shortly announce detailed schedule and contacts from where entry pass can be obtained.
Thursday, January 29, 2009
We crossed Heighest number of students in CA, CS, ICWA Final and inter in Gandhinagar.
We are pleased to announce that efforts has achieved an important milestone of crossing highest number of students in CA, CS, ICWA Final and inter in Gandhinagar. This has been achieved because of the continuous hard work of all team members. Efforts takes an opportunity to thank all its team members and reassures that this is just a beginning, and there is a lot to come.
We are committed to deliver the best professional education.
We are committed to deliver the best professional education.
Tuesday, January 20, 2009
New Batch For December 2009 and June 2010 Students
New batch for students appearing in December 2009 and June 2010 Final, PCC, IPCC and CPT Exams will be started from 1st February, 2009.
Friday, January 16, 2009
CA Final Result- Expectations, Success, Failure, Celebration and Depression
CA final result has been declared today. I received news of many negative results of my friends and others. I didn’t have surprise on many of them. But when I received result of my sister, I was a little surprised. She cleared her first group but could not clear only one paper of second group. I was surprised because I know that she is brilliant from her school days. She had done very well in PE-I and PE-II and her preparation was also very good in final.
I am not writing this to give any consolation or to analyze her result. But I am writing this to share my views on success and failure. Today, we have made these words very specific. If someone is able to clear examination, he/she is successful and if he/she can’t, she is a failure. This is what our definition is. Actually there is a fundamental mistake in this definition. We forget that those who have failed today have the strength to fight again and they can convert their failure in to success.
We need to understand some basic facts regarding CA examination. We must understand that it is a professional examination and emotions do not work here. Professional examinations can be handled professionally only. The big question is how can we PROFESSIONALLY handle an exam? The simple answer is that we must have a professional strategy for preparation of CA final exam. We have to prepare strategy for each subject.
The fundamental thing is, we should realize that mere clearing an examination is not our sole goal. If we are not logically clear, degree doesn’t work. First of all we should prepare each subject by going to its roots. We should keep in our mind that there is no short cut in CA. We can’t get success or at least a big success by short cuts. In short runs they may work but in long run they will demand replies from us. So my dear friends, whatever you do, please do it by giving your heart to it. If we can give our heart to what we are doing, we will always be satisfied with whatever we are doing. Don’t do anything just for the shake of doing. We should live for our goals. That is the greatest enjoyment of life.
I define success like this- “If we can enjoy what we are doing, we are successful. If we can’t, it is our failure”
I don’t know whether this definition is correct or not in your eyes, but I live by this definition. I firmly believe that our success or failure can’t be decided by one piece of paper. There is nothing called FINAL in life. We can always change the realities if we give our heart to what we are doing. For this purpose it is absolutely essential to decide what we enjoy the most. We have to decide our direction first. But sometimes we concentrate on speed only and we forget the direction. At last we realize that “Oh, this is not the place where I wanted to come.”
Professional degree or money can never be the final goal. We must set goal to be excellent in whatever we are doing. Yes of course, it is difficult, but who wants to do simple things? We have only one life and we can’t afford to waste it in doing simple things. We must accept challenges. In fact, we must love to accept challenges. We can create a strong society if we can teach students to accept challenges.
Lastly, I wish to add that life is a continuous race. We have to run till end. And we are strong enough to accept the challenge of wining this race. Let’s enjoy this race.
CA Final and CPT results Announced
The results for CA Final and CPT examinations held in November 2008 have been announced today.
To go to the result page, click here.
To go to the result page, click here.
Wednesday, January 7, 2009
Saturday, January 3, 2009
Revised definiton of Charitable Purpose
Definition of ‘Charitable purpose’ under section 2(15) of the Income-tax Act, 1961
Section 2(15) of the Income Tax Act, 1961 (‘Act’) defines “charitable purpose” to include the following:-
(i) Relief of the poor
(ii) Education
(iii) Medical relief, and
(iv) the advancement of any other object of general public utility.
An entity with a charitable object of the above nature was eligible for exemption from tax under section 11 or alternatively under section 10(23C) of the Act. However, it was seen that a number of entities who were engaged in commercial activities were also claiming exemption on the ground that such activities were for the advancement of objects of general public utility in terms of the fourth limb of the definition of ‘charitable purpose’. Therefore, section 2(15) was amended vide Finance Act, 2008 by adding a proviso which states that the ‘advancement of any other object of general public utility’ shall not be a charitable purpose if it involves the carrying on of –
(a) any activity in the nature of trade, commerce or business; or
(b) any activity of rendering any service in relation to any trade, commerce or business;
for a cess or fee or any other consideration, irrespective of the nature of use or application, or retention of the income from such activity.
2. The following implications arise from this amendment –
2.1 The newly inserted proviso to section 2(15) will not apply in respect of the first three limbs of section 2(15), i.e., relief of the poor, education or medical relief. Consequently, where the purpose of a trust or institution is relief of the poor, education or medical relief, it will constitute ‘charitable purpose’ even if it incidentally involves the carrying on of commercial activities.
2.2. ‘Relief of the poor’ encompasses a wide range of objects for the welfare of the economically and socially disadvantaged or needy. It will, therefore, include within its ambit purposes such as relief to destitute, orphans or the handicapped, disadvantaged women or children, small and marginal farmers, indigent artisans or senior citizens in need of aid. Entities who have these objects will continue to be eligible for exemption even if they incidentally carry on a commercial activity, subject, however, to the conditions stipulated under section 11(4A) or the seventh proviso to section 10(23C) which are that
(i) the business should be incidental to the attainment of the objectives of the entity,
and
(ii) separate books of account should be maintained in respect of such business.
Similarly, entities whose object is ‘education’ or ‘medical relief’ would also continue to be eligible for exemption as charitable institutions even if they incidentally carry on a commercial activity subject to the conditions mentioned above.
3. The newly inserted proviso to section 2(15) will apply only to entities whose purpose is ‘advancement of any other object of general public utility’ i.e. the fourth limb of the definition of ‘charitable purpose’ contained in section 2(15). Hence, such entities will not be eligible for exemption under section 11 or under section 10(23C) of the Act if they carry on commercial activities. Whether such an entity is carrying on an activity in the nature of trade, commerce or business is a question of fact which will be decided based on the nature, scope, extent and frequency of the activity.
3.1. There are industry and trade associations who claim exemption from tax u/s 11 on the ground that their objects are for charitable purpose as these are covered under ‘any other object of general public utility’. Under the principle of mutuality, if trading takes place between persons who are associated together and contribute to a common fund for the financing of some venture or object and in this respect have no dealings or relations with any outside body, then any surplus returned to the persons forming such association is not chargeable to tax. In such cases, there must be complete identity between the contributors and the participants.
Therefore, where industry or trade associations claim both to be charitable institutions as well as mutual organizations and their activities are restricted to contributions from and participation of only their members, these would not fall under the purview of the proviso to section 2(15) owing to the principle of mutuality. However, if such organizations have dealings with non-members, their claim to be charitable organizations would now be governed by the additional conditions stipulated in the proviso to section 2 (15).
3.2. In the final analysis, however, whether the assessee has for its object ‘the advancement of any other object of general public utility’ is a question of fact. If such assessee is engaged in any activity in the nature of trade, commerce or business or renders any service in relation to trade, commerce or business, it would not be entitled to claim that its object is charitable purpose. In such a case, the object of ‘general public utility’ will be only a mask or a device to hide the true purpose which is trade, commerce or business or the rendering of any service in relation to trade, commerce or business. Each case would, therefore, be decided on its own facts and no generalization is possible. Assessees, who claim that their object is ‘charitable purpose’ within the meaning of Section 2(15), would be well advised to eschew any activity which is in the nature of trade, commerce or business or the rendering of any service in relation to any trade, commerce or business.
Section 2(15) of the Income Tax Act, 1961 (‘Act’) defines “charitable purpose” to include the following:-
(i) Relief of the poor
(ii) Education
(iii) Medical relief, and
(iv) the advancement of any other object of general public utility.
An entity with a charitable object of the above nature was eligible for exemption from tax under section 11 or alternatively under section 10(23C) of the Act. However, it was seen that a number of entities who were engaged in commercial activities were also claiming exemption on the ground that such activities were for the advancement of objects of general public utility in terms of the fourth limb of the definition of ‘charitable purpose’. Therefore, section 2(15) was amended vide Finance Act, 2008 by adding a proviso which states that the ‘advancement of any other object of general public utility’ shall not be a charitable purpose if it involves the carrying on of –
(a) any activity in the nature of trade, commerce or business; or
(b) any activity of rendering any service in relation to any trade, commerce or business;
for a cess or fee or any other consideration, irrespective of the nature of use or application, or retention of the income from such activity.
2. The following implications arise from this amendment –
2.1 The newly inserted proviso to section 2(15) will not apply in respect of the first three limbs of section 2(15), i.e., relief of the poor, education or medical relief. Consequently, where the purpose of a trust or institution is relief of the poor, education or medical relief, it will constitute ‘charitable purpose’ even if it incidentally involves the carrying on of commercial activities.
2.2. ‘Relief of the poor’ encompasses a wide range of objects for the welfare of the economically and socially disadvantaged or needy. It will, therefore, include within its ambit purposes such as relief to destitute, orphans or the handicapped, disadvantaged women or children, small and marginal farmers, indigent artisans or senior citizens in need of aid. Entities who have these objects will continue to be eligible for exemption even if they incidentally carry on a commercial activity, subject, however, to the conditions stipulated under section 11(4A) or the seventh proviso to section 10(23C) which are that
(i) the business should be incidental to the attainment of the objectives of the entity,
and
(ii) separate books of account should be maintained in respect of such business.
Similarly, entities whose object is ‘education’ or ‘medical relief’ would also continue to be eligible for exemption as charitable institutions even if they incidentally carry on a commercial activity subject to the conditions mentioned above.
3. The newly inserted proviso to section 2(15) will apply only to entities whose purpose is ‘advancement of any other object of general public utility’ i.e. the fourth limb of the definition of ‘charitable purpose’ contained in section 2(15). Hence, such entities will not be eligible for exemption under section 11 or under section 10(23C) of the Act if they carry on commercial activities. Whether such an entity is carrying on an activity in the nature of trade, commerce or business is a question of fact which will be decided based on the nature, scope, extent and frequency of the activity.
3.1. There are industry and trade associations who claim exemption from tax u/s 11 on the ground that their objects are for charitable purpose as these are covered under ‘any other object of general public utility’. Under the principle of mutuality, if trading takes place between persons who are associated together and contribute to a common fund for the financing of some venture or object and in this respect have no dealings or relations with any outside body, then any surplus returned to the persons forming such association is not chargeable to tax. In such cases, there must be complete identity between the contributors and the participants.
Therefore, where industry or trade associations claim both to be charitable institutions as well as mutual organizations and their activities are restricted to contributions from and participation of only their members, these would not fall under the purview of the proviso to section 2(15) owing to the principle of mutuality. However, if such organizations have dealings with non-members, their claim to be charitable organizations would now be governed by the additional conditions stipulated in the proviso to section 2 (15).
3.2. In the final analysis, however, whether the assessee has for its object ‘the advancement of any other object of general public utility’ is a question of fact. If such assessee is engaged in any activity in the nature of trade, commerce or business or renders any service in relation to trade, commerce or business, it would not be entitled to claim that its object is charitable purpose. In such a case, the object of ‘general public utility’ will be only a mask or a device to hide the true purpose which is trade, commerce or business or the rendering of any service in relation to trade, commerce or business. Each case would, therefore, be decided on its own facts and no generalization is possible. Assessees, who claim that their object is ‘charitable purpose’ within the meaning of Section 2(15), would be well advised to eschew any activity which is in the nature of trade, commerce or business or the rendering of any service in relation to any trade, commerce or business.
Internal auditor cannot be appointed as Tax auditor
ICAI vide announcement dated 12 December 2008 has clarified that the internal auditor, whether working with the organisation or independently practising as a Chartered Accountant or a firm of Chartered Accountants, cannot be appointed as the tax auditor of an assessee for the purposes of tax audit under section 44AB of Income Tax Act, 1961.
Here is the relevant text of the ICAI announcement:-
"The Council in its 281st meeting held from 3rd October, 2008 to 5th October 2008 at New Delhi considered an issue arising from the Guidance Note on Tax audit under section 44AB of the Income-tax Act,1961 as to "Whether the internal auditor of an assessee, being an individual chartered accountant or a firm of chartered accountants can be appointed as his tax auditor".
The Council decided that an internal auditor of an assessee, whether working with the organisation or independently practising chartered accountant or a firm of chartered accountants, cannot be appointed as his tax auditor "
Here is the relevant text of the ICAI announcement:-
"The Council in its 281st meeting held from 3rd October, 2008 to 5th October 2008 at New Delhi considered an issue arising from the Guidance Note on Tax audit under section 44AB of the Income-tax Act,1961 as to "Whether the internal auditor of an assessee, being an individual chartered accountant or a firm of chartered accountants can be appointed as his tax auditor".
The Council decided that an internal auditor of an assessee, whether working with the organisation or independently practising chartered accountant or a firm of chartered accountants, cannot be appointed as his tax auditor "
Friday, January 2, 2009
Technical Query from Abhay- Procudure to obtain permission of FIPB
Please Refer Query From Abhay on
PROCEDURES
GENERAL PERMISSION OF RBI UNDER FEMA
PROCEDURES
PROCEDURE UNDER
FDI in sector/ activities to the extent permitted under automatic route does not require any prior approval either by Government of India or RBI. The investors are only required to notify the Regional office concerned of RBI within 30 days of receipt of inward remittances and file the required documents with that office within 30 days of issue of shares to foreign investors.
PROCEDURE UNDER GOVERNMENT APPROVAL
FDI in activities not covered under the automatic route requires prior Government approval and are considered by the Foreign Investment Promotion Board (FIPB). Approvals of composite proposals involving foreign investment / foreign technical collaboration are also granted on the recommendations of the FIPB.
Applications for all FDI cases, except Non-Resident Indian (NRI) investments and 100% Export Oriented Units (EOUs), should be submitted to the FIPB Unit, Department of Economic Affairs (DEA), Ministry of Finance.
Applications for NRI and 100% EOU cases should be presented to SIA in Department of Industrial Policy and Promotion.
Applications can also be submitted with Indian Missions abroad who forward them to the Department of Economic Affairs for further processing.
Applications can be made in Form FC-IL which can be downloaded from http://www.dipp.gov.in. Plain paper applications carrying all relevant details are also accepted. No fee is payable.
Additional Information
GENERAL PERMISSION OF RBI UNDER FEMA
Indian companies having foreign investment approval through FIPB route do not require any further clearance from RBI for receiving inward remittance and issue of shares to the foreign investors. The companies are required to notify the concerned regional office of the RBI of receipt of inward remittances within 30 days of such receipt and within 30 days of issue of shares to the foreign investors or NRIs.
GENERAL PERMISSION TO NRIs/PIOs
Reserve Bank has granted general permission to NRIs/PIOs for undertaking direct investment in Indian companies under the
The Reserve Bank of
1. Resident individuals, partnership/proprietorship concerns to avail of interest bearing rupee loans from NRIs/PIOs out of funds remitted by them from abroad or out of funds held in their bank accounts in India, on non – repatriation basis, subject to certain conditions; one of them being that the rate of interest on such loans should not exceed Bank Rate plus two percentage points.
2. NRIs/PIOs to transfer by way of gift shares held by them in Indian companies and to transfer by way of gift immovable property held by them in
3. All domestic public/private sector mutual funds for issue of units to NRIs/PIOs on both repatriation and non repatriation basis.
4. NRIs/PIOs to place deposits with Indian firms, on non-repatriation basis and with Indian companies on non-repatriation basis out of domestic sources.
5. NRIs/PIOs for sale of shares acquired under direct investment Schemes on stock exchanges in
6. NRIs/PIOs for transfer of shares, by way of sale under private arrangement to another NRI or to a resident.
NRIs/PIOs have been granted General Permission to invest in Government Securities and Treasury Bills.
Thursday, January 1, 2009
Technical Query from Abhay.
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Following Query has been put by Abhay on Efforts Blog by way of comment.
Dear Brijesh,
our client make J.V with Foreign Co. The said foreign company had decided to bring plant & machinery as capital. can it is consider as issue of share in kind? Further whether it is permissible under FEMA ? I don't think that it is permissible. Further please tell the procedure to get approval from FIPB ?- Tuesday, December 30, 2008 5:17:00 PM
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Dear Abhay,
In your question form of J.V. has not been mentioned. I suppose they are creating a separate JV company. If that JV company issues its shares to foreign company, in consideration of plant and machinery brought by foreign company, it is certainly a case of issue of shares for consideration in kind. As per AS-10, machinery will be shown in the books of JV company either at fair market value machinery or fair market value of shares, whichever is more clearly available. (Refer para 11.2 of AS-10).
I have sent your query relating to FEMA to a company secretary. I will answer as soon as I get his expert opinion on FEMA related query.
CA Final Batch For November-09 and May-10 Students
Accounts, Costing, DT and IDT Lectures for CA Final Students appearing in November-09 and May-10 Exam will be started on 1st January, 2009.
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Following Query was put on Efforts Blog by Bharat.
One person holds in his name a HP which is SO & his wife buys a HP in her own name & both are living together in one HP, then the other HP is to be considered as SO or Deemed to be let out? And what is the tax effect for both the individuals?
I understand following facts from your query.
1. There is house no-1 which is owned by husband.
2. His wife purchased another house. i.e. House no-2.
3. Both husband and wife live together in house No-1.
4. Your question is whether house no-2 will be considered as self occupied or deemed let out?
Please note that husband and wife are separate assesses for the purpose of income tax. As per income tax act, when the person occupies more than one house for his own residential purpose, only one house is treated as self-occupied and other houses will be treated as deemed let out.
In your question the point to be considered is whether house no-2 can be considered as " occupied for own residential purpose" by wife when she is living with her husband in house no-1 and she is not living in house no-2?
It was held by Delhi High Court in case of CIT vs. Deepak Seth that A house for residential purpose does not require compulsory residence in that house. It only requires that house should be available for residential purpose of the assessee all time. Where the assessee has retained exclusive control over possession of a house owned by him/her, though he/she may not be actually present in the house, when he/she is away from it, he/she is still in constructive possession of the residential house and as such cannot be denied the benefit under section 23(2).
Hence, House no-2 should be considered as Self occupied. As you have mentioned that house is PURCHASED by wife, section 27 provision regarding deemed ownership will also not be applied. In the absence of information I assume that wife has purchased house from her own income,hence clubbing provisions of Section 64 will also not apply.