EIRC Newletter

2EIRC Newsletter | April 2012 Volume 38 | Issue No. 3


Chairman Writes �

CA. Prasun Kr. BhattacharyyaChairman, EIRC

Rabindra Nazrul SandhyaFriday 18th May 2012

EIRC AuditoriumFrom 6 pm onwards

arranged in the past to familiarise and encourage our fraternity to look atthis avenue of professional opportunity. Apropos of the same you are allrequested to attend the full day workshop which will not only answer yourqueries on the Entry tax issue, but also guide you through on Recentchanges in West Bengal VAT Laws and in the second half Mock Boardproceedings being chaired by President of the West Bengal Appellateand Revisional Board, Govt. Of West Bengal and the department beingrepresented by currently functioning Departmental representatives shouldset a perfect Saturday.Seminars on other subjects and Direct Taxes including TDS have also beenscheduled on different dates in May 2012. Please refer to Page 4 for details.I would also appeal to you to register for and attend the 2nd ICAI All RegionConference, 2012 being held at Baroda on 8th and 9th June, 2012. Detailshave been given in the website and Page 11 of this NewsletterWe all are aware of the significance of meaningful, effective communication.Towards this, the Newsletter is an important means. Information is alsoavailable in the Website at www.eircicai.org. To ensure that all the membershave their respective contact details and E-mail IDs updated, may I requestyou all to please take the trouble to ensure forwarding of your latest dataalongwith your annual membership renewal form. You can also update thesame with the Regional office/Member Section by E-mail or by written letters,about these details. I know this is an onerous task but this would facilitateand help me to reach you with ease and ensure close coordination amongstall of us.To iterate, let us make the felicitation of our torch bearers, the Hon’blePresident & Vice President, ICAI on Wednesday, 9th May 2012 a memorableone by your attendance therein. Recently we did have the privilege of havingthe august presence of our President and Vice President, ICAI on 21st April2012 during the Social and Cultural Function of the Employees Associationand an array of various talents were showcased by the employees of KolkataOffice.I would request your attendance in the forthcoming “Rabindra NazrulSandhya” planned on 18th May 2012 and thus aptly celebrating the 151st

Birth Centenary of Kabiguru, Rabindranath Tagore.Plan is also in progress to mark the closing ceremony of “Diamond JubileeYear of the EIRC”.To the students I would just add that positive attitude, enthusiasm, hardwork and self-confidence are the keys for your success in the examinations.Nothing great was ever achieved without enthusiasm and there is nosubstitute for hard work. Regular study, Review and Repetition are the threeR’s for success in examination. My best wishes are always with you.Before I conclude I take this opportunity to request you all to share yourthoughts, expertise and areas in which you specialise including the areas ofconcern. Members in industry could share their experience of the issuesconcerning that industry and also the opportunity for members. My dreamis to bring all members closer. The collective force of our members andstudents can continue to play a decisive role in nation buildingWith best wishes and warm regardsYours sincerely

My dear Professional colleagues,It was indeed a great way to trigger the newfinancial year. Concerns were raised fromsome quarters as to the viability of holdinga seminar on 1st April. Be as it may, Sunday,1st April, 2012, witnessed a full house ofdelegates for the Bank Audit seminar atthe EIRC premises. The deliberations by

the galaxy of speakers followed by the interaction proved to have resolvedmany significant queries. By the time this issue reaches, all my esteemedmembers must have completed the herculean task of Bank Branch Audit. Iam quite sure that irrespective of the pressures of completing the audit inshort time, our fraternity has discharged its duties to the nation with the duediligence the assignment demands. It was precisely for this reason that noCPE seminars were scheduled in the early part of April 2012.Before dwelling further, I feel my esteemed members must know the reasoncontributing to the deferment of dates for the felicitation of our Hon’blePresident CA Jaydeep N Shah and Hon’ble Vice President CA Subodh Kr.Agrawal form April 24, 2012 (as was communicated to you within the lastNewsletter) to May 9, 2012. Due to sudden unavoidable and urgentdevelopments, both the Hon’ble President and the Vice President wouldhave had to reschedule their return earlier than expected on 24th April, 2012and the date had to be changed. I tried to send SMS to all of you, however,the SMS could reach only a handful of members in as much as at somepoint of time the members who did not receive SMS had registered their cellnumbers in “DND” (Do not disturb) category. To facilitate receipt ofmessages from EIRC I would request all my esteemed members totake one further step detailed below :-

The above would ensure while you receive sms (messages) from EIRCunhindered, your DND (Do not disturb) facility in so far as othermessage senders whom you want to avoid, remains valid and inoperation.It was a pleasure to meet and interact with many of you at the CPE Seminaron ‘Critical Aspects of E-filing and TDS Returns’ organised on 11th April2012, “Revised Schedule – VI” on 17th April 2012 and “ERP – ValueEnhancer” by experts from Tally on 20th April 2012.With the current budget totally changing the concept of Service Tax, I amsure to meet a full house again at the full day Workshop on Service Taxscheduled for 28th April 2012 in the EIRC premises.We are all aware that “Revised Schedule VI” has now become an integralpart of our daily lives and with that in mind steps have been taken to have afull day workshop at The Park Hotel on Saturday 12th May, 2012 onCorporate Laws, LLP and Revised Schedule VI. Eminent speakersalongwith Dr. Navrang Saini, Regional Director and Mr. D.Bandopadhyay, Registrar of Companies, West Bengal should addressa lot of your queries and offer appropriate guidance.There was a demand for holding a workshop on VAT with the introduction ofEntry Tax and the same has been arranged for Saturday 19th May, 2012.My own belief is that in terms of numbers, many of us have shied away fromthe Indirect Tax Arena for far too long. Mock Board proceedings had been

Is any of my CA friend not receiving SMS or Mobile Alerts?SMS “start caeirc” to 9290332233

from your Cellular phone where you intend to receive alerts.


NEXT FIVE WEEKS . . . . .Day and Date Programme Speakers Coordinator Venue Duration CPE Delegate

Hours FFFFFees èes èes èes èes `

Thursday 3rd Transfer Pricing CA Milan Chakravarti CA Sushil Kr R.Singhi Hall, 5.15 to 3 150May, 2012 GAAR & Other Goyal EIRC Premises 8.30 pm

international Tax matters CA Himanshu Patel

Thursday 10th Teleconference on CA Chandrashekhar EIRC R.Singhi Hall, 11.00am 2 100May, 2012 Taxation Issues in Gokhale EIRC Premises to 1.00pm

Development Agreements Hyderabad

Thursday 10th NBFC Audit Mr R.B.Kumar, CA Pramod R.Singhi Hall, 5.15 to 3 150May, 2012 AGM, RBI Dayal Rungta EIRC Premises 8.30 pm

CA Manoj Banthia

Saturday 12th Corporate laws Eminent Speakers EIRC Park Hotel, 10.00pm 6 1200May, 2012 LLP & XBRL Details in page No.19 Kolkata to 5.00pm

Wednesday ERP Speakers from CA Subhash Ch R.Singhi Hall, 5.15 to 3 15016th May, 2012 Oracle Saraf EIRC Premises 8.30 pm

Saturday 19th Recent Ammendments Eminent Speakers EIRC R.Singhi Hall, 10.00pm 6 600May, 2012 in VAT Laws, Details in EIRC Premises to

Introduction page No.20 5.00pmof Entry Tax & MockBoard Proceedings

Tuesday 22ND TDS and Related Issues CA Barun Ghosh CA Ranjeet Kr R.Singhi Hall, 5.15 to 3 150May, 2012 CA Sanjay Bajoria Agarwal EIRC Premises 8.30 pm

Wednesday Teleconference on CA Rajkumar Adukia EIRC R.Singhi Hall 11.00am 2 10023rd May, 2012 Valuation of Internal Central Council EIRC Premises to

Control Framework & Member, ICAI 1.00pmInternal Audit inemerging Scenario .

Friday, 25th Cyber crime & CA Aveek Gupta CA Krishanu R.Singhi Hall 5.15 to 3 150May, 2012 Cyber laws CA Arif Ahmed Bhattacharyya EIRC Premises 8.30 pm

Friday, 1st Real Estate Issues Eminent Speakers CA Sushil Kr R.Singhi Hall 5.15 to 3 150June, 2012 Goyal EIRC Premises 8.30 pm

Date Event Time VenueWednesday Felicitation of Hon’ble President & Vice President, ICAI 5.30pm - 7.45 pm R. Singhi Hall,9th May 2012 EIRC Premises

Contributory Dinner with President & Vice President, ICAI 8.00 pm onwards Park Hotel(Rs. 800/-)

MOST SIGNIFICANT EVENT

Date Event Time VenueFriday, 18th May, 2012 Rabindra Nazrul Sandhya 6.00 pm onwards R. Singhi Hall

EIRC Premises

SIGNIFICANT EVENT

Date EventFriday, 24th August, 2012 & 37th Regional Conference – EIRC at Science City, KolkataSaturday, 25th August, 2012

BLOCK YOUR DATES


Forthcoming Programme


The EIRC Newsletter seeks to

enhance the proficiency and

competitive advantage of its

readers by providing articles

from amongst its Members and

other professionals. However

the views expressed are the

personal view of the author

and not that of the EIRC. Many

contemporary and relevant

issues have been covered in

this edition of the newsletter.

The Institute of CharteredAccountants of India

7, Anandilal Poddar Sarani(Russell Street), Kolkata - 700 071

Phone : (033) 39893989Fax : (033) 22272317

Website : www.eircicai.org

Branches� Asansol � Bhubaneswar

� Cuttack � Durgapur

� Guwahati � Rourkela

� Sambalpur � Siligurie e e e e Newsletter can be downloaded from the EIRC website : www.eircicai.org

For P

riv

ate C

ircula

tio

n O

nly

Vol.

38

| I

ssue N

o. 3

| 2

7th A

pril

20

12

` 10

EIRC of ICAI

� Chairman Writes 3

� Forthcoming Programme for Members 4

EICASA� Chairman, EICASA Writes 6

� Student Forthcoming Programmes 6

News� Study Circle News 9

� Library News 13

� Obituary 13

Announcement� Invitation to become Evaluators 8

� Work Disposal Position 9

� Seminar on Corporate Laws 19

� Seminar on Recent Ammendments 20

Articles

� Recent Unreported Judgements Of Kolkata Tribunal 8

� Re-Entry Of Entry Tax In West Benga 10-11

� Companies Bill 2011 - critical proposals 12-13

� Highlights of Monetary Policy 2012-13 14-16


EICASA

FORTHCOMING PROGRAMME FOR STUDENTSDay and Date Programme Speakers Coordinator Venue Duration Delegate

Fees

Friday,11th Practical Aspects in CA Debasish Mitra, EICASA R Singhi 02.30 pm 50/-May,2012 drafting Balance Sheet Hall to 4.30 pm

in Revised Sch VI

Thursday,24th Audit Questionnaire- A CA Divya Mohta, EICASA R Singhi 02.30 pm 50/-May,2012 Guide to conducting Partner, SDPA Hall to 4.30 pm

Statutory Audit & Associates.

Thursday,7th Important Aspects in CA Sudersan EICASA R Singhi 02.30 pm 50/-June,2012 Statutory Audit (Incld Mukherjee, Hall to 4.30 pm

CARO, Rev Sch VI, Partner, MookherjeeApplicable Auditing Biswas & PathakStandard)

Dear Students,

We started the last month with a verypositive note.From 1st April,2012 westarted effective online registration forGMCS,Orientation and ITT Coursethrough eircicai.org.

The following significant activities tookplace in last month:

1.4 (four) Batches of Orientation Course completedwherein 151 Students participated.

2.2 (two) Batches of ITT completed wherein 82 Studentspassed out the course.

3.A Full One Day Seminar was organised on 29thMarch,2012 on Corporate Laws and Costing wherein 70students participated.

4.Campus placement was successfullycompleted.Though very few company turned up and veryfew Qualified CAs were recruited.

We are,now ready with a very details programmes to be takenup in the month of May, 2012:

1.A series of Students Seminar on importance ofArticleship Training and various issues faced while au-diting has been planned to be conducted by Senior Part-ners of reputed firm from Kolkata,the details are givenbelow in this page itself.

2.On 27th May, 2012 a Mega Sports Festival has beenorganised at Silver Spring Club,Kolkata.

3. We are in the process of starting Tuition Classes forFinal Students at Institute Premises.The details regard-

ing date,time,fees and feculty will be known in duecourse.

4.On 14th and 15th July,2012 a National Convention forStudents has been planned wherein eminent speakersacross India will guide the students.A Special sessionof Akash Gautam,a renowned motivator and proloficspeaker from Chandigarh has been planned in thisconvention.Please book your diary for the event.

We do guide and help the students in getting suitable firm forregistering in articleship.If any student has any issues in do-ing articleship,do contact me for resolving the issues.

We are also committed to serve the students in the best pos-sible manner.If the students are not getting the desiredservices,please bring to our notice,we will resolve their is-sues amicably.

And I wish all the Students of PCC/IPCC/Final best of luckfor the ensuing Exams! and please leave the fear fobia be-hind while preparing for exams.

The greatest mistake you can make in life is to be continuallyfearing you will make a mistake." - Elbert Hubbard

Regularly visit Institute website www.icai.org & EIRC websitewww.eircicai.org for updated information.

Yours Truly,

CA Ranjeet Kumar AgarwalChairman,EICASA & Vice-Chairman,EIRC

9830140211/ [email protected]


ANNOUNCEMENT

Examination Department of the Institute would like to availthe services of the members of the Institute (upto 15 yearsof Experience) to act as Checker, other details are as under:

The Examination Department of the Institute avails theservices of resource persons (members of the Institute,academicians, executives, etc.) to act as Examiners toevaluate the answer books of Chartered AccountantsExaminations (Final/IPCE/PCE). Each examiner is requiredto appoint a person as his checker to inter-alia perform thefollowing functions besides assisting him in the preparationof Award List.

The services of the checkers are required at individualexaminer level to check the following:

1. To ensure that the marks awarded to the sub parts of aquestion entered in the marks grid on the cover pageof the answer book has been totaled correctly.

2. To ensure that the total marks written in numerals inthe marks grid on the cover page of the answer booktallies with what is written in words therein below.

3. To ensure that total marks in the grid is carried forwardcorrectly in numerals in the OMR portion on the righthand bottom corner of the cover page of the answerbook.

4. To ensure that the darkening of the corresponding OMRcircles on the cover page is done as per the numeralswritten in the box there above.

5. To ensure that the total marks on the cover page of theanswer book is carried forward correctly in the awardlist against the respective code number.

6. To ensure that the totals of the marks entered in eachcolumn of the award list is correct.

7. To ensure that the grand total of each award list iscorrect

8. To ensure that the total number of answer books isentered correctly in the relevant box in the award list.

9. To ensure that darkening of circles in the award list isin accordance with the marks written in numeralsagainst the respective code number of the answer book.

10. To ensure that the page wise totals of marks awardedon the award list is carried forward correctly to thesummary sheet

11. To ensure that totaling of marks of all the candidatescarried forward to the Summary Sheet is correct.

12. To ensure that darkening of OMR circles is donecompletely in Cover page of the answer books as wellas OMR Award List.

CLASSIFIEDLooking for Partners to

start practice.

Work experience in Lovelock, IFCI andin Industry for 35 years.

CA Narayandas Adhya(M-50175)Mobile: 9007061818.

E-mail: [email protected] - 14,Gobinda Dhar Lane,

near Burra Bazar PS. Kokata - 700001

Over all scheme for members of the Institute to becomeEvaluators:

1. Members who would like to associate with theExamination Department to act as Checker have to fillup an online form available at http://www.icai.org/app_forms/empanelment.html. The ExaminationDepartment will not entertain any other mode ofempanelment application form.

2. Based on the assignment given to individual examiners,reference of such examiners to whom the services ofempanelled checkers are required would be providedto the empanelled checkers in due course.

3. Though the empanelment is open to members havingupto 15 years of experience, first preference will begiven to members having upto 5 years of postmembership experience. Similarly second preferencewill be given to members with upto 10 years of postmembership experience and so on.

4. The empanelled checkers have to visit the examinersat their residence or official address for providing theservices as aforesaid.

5. A token honorarium of Rs. 25 per full paper or Rs. 15per half paper would be paid to the checkers.

6. It is anticipated that the no. of visit of checker to theexaminers office/residence would be maximum 3 tocomplete the assignment for which a conveyanceexpenditure reimbursement of Rs. 1000 for A class citiesor 500 Rs. for B class cities (per occasion) will be paid.Additional visits by the checkers to examiners, if foundnecessary may, also be eligible for reimbursement ofthe conveyance expenditure subject to necessaryapprovals.

Examination DepartmentICAI

Invitation to become Evaluators for Chartered Accountants Examinations


Rajendra Prasad Jayaswal Vs. ITO, A- Bench, ITA No.1275/Kol/2011

Unreconciled difference of sundry debtors cannot betaken as income.It was held that where sundry debtors amounting toRs.6,06,102/- were overstated, it cannot be added back asincome of the assessee, which is against the principle ofaccounting policy. Further, it is explained by the ld. Counselfor the assessee that this amount has been taken intoaccount in computing the income of the assessee of previousyear. During the process the assessee has taken steps towrite off the debtors in subsequent years. Therefore, thisaddition is not warranted as it is the difference arose onoverstatement of sundry debtors. It cannot be taken asincome of the assessee. This difference was made out ofdifference in opening balance as rightly contended . Hence,it cannot be treated as income on the account of differencein balance.

M/s. Meenakshi Tea Co. Ltd. Vs. DCIT, A- Bench, ITANo. 953/Kol/2011

Assessee has to be a shareholder for deemed dividendto be taxed.It was held that where in respect to loan received from X.Ltd. of Rs.46 lacs, Assessing Officer noted that M/s. Y anotherconcern was a common shareholder in both the aforesaidcompanies It is a fact that the assessee has taken loan fromX but it was not a shareholder in that company only Y was acommon shareholder in both the companies. Relying on thedecision of ITAT “E” Special Bench, Mumbai in the case ofACIT Vs. Bhaumik Colour Pvt. Ltd. dated 19.11.2008 118ITD it was held that the payment should be made to acompany in which lender holds 10% voting right and X doesnot hold 10% share in assessee company. Another findingwas argued that the loans taken are commercial borrowingsand assessee’s business is that of giving loans andinvestments and same is the case with two lendercompanies. It was held that the assessee company haspaid interest on loans taken and details of interest paid toboth the lenders are reflected in interest payment detailsenclosed in assessee’s paper book.It is a pure business transaction between the two companies,who are engaged in the business of loans and investmentsand when interest is paid there cannot be any question ofany benefit derived on account of deemed dividend u/s.2(22)(e) of the Act.

ACIT v M/s. S.P Jaiswal Estate Pvt.Ltd, B- Bench, ITANo. 58/Kol/2010

Compensation for delayed payment of statutory liabilityis not penal and is allowableIt was held that unless there is a material to show thatpayment is a penalty for infraction of law and rules, it cannot

be disallowed as it is only compensatory payment for thedelayed payment of statutory liability. Once it is explainedthat it is a compensatory, the decision of the Hon’ble SupremeCourt in the case of Malwa Vanaspati & Chemicals Co. Ltdreported in 224 ITR 383 (SC), the impugned order of thelearned Commissioner of Income-tax (Appeals) was held tobe quite justified.

DCIT v Smt Gargi Poddar, B- Bench, ITA No. 1345/Kol/2010

Employees contribution to PF & ESI paid after due datebut before the due date of filing the return of income isallowable.It was held that the decisions of the Hon’ble Supreme Courtin the case of Vinay Cement Ltd reported in (2007) 213 CTR268 (SC) and in the case of CIT Vs. Alom Extrusions Ltd(2009) 319 ITR 306(SC) are directly applicable on theassessee’s case.. Respectfully following the same, it wasalso held to be allowable as it was borne out from the recordsthat such contributions to the government account on ESI/PF were paid by the assessee before the due date of filingof return u/s. 139(1) of the Act.

Ashok Kumar Singhania v DCIT, B- Bench, ITA No. 1956/Kol/2009

Seized cash would be treated as Advance Tax for thepurpose of computation of interest and if not done is amistake apparent from record to be rectified u/s 154 ofthe Act.It was held that where cash amounting to Rs.4.5 lacs wasfound and seized during search in the premise of theassessee u/s. 132 of the Act by the revenue and theassessee vide his computation, while filing return of income,has claimed the adjustment of seized cash against thecomputed liability as computed by him, but the adjustmentwas made by the AO not during assessment proceedingsbut only while passing rectification order u/s. 154 of the Actand in this process raised interest demand u/s. 234B of theAct, seized cash would be treated as advance tax for thepurpose of computation of interest, and, therefore, no interestunder sections 234A to 234C land 220(2) was leviable. Thetribunal relied on the Coordinate Bench Tribunal’s decisionon this very issue in the case of Vipul D. Doshi V. ACITl, ITANo.5754(Mum) of 1998 dated 23.10.2000 reported in (2001)118 Taxman 30 (Mag), In the case of Shri Satpaul D. Agarwal,HUF V. ACIT, ITA No.5232/Bom/91, it cannot be said thatthe assessee had defaulted in payment of taxes when theamount had been retained by the Revenue Department. Inthe case of CIT V. Seshasayee Paper & Board Ltd. (2005)272 ITR 364, wherein it has been held that “paid” does notnecessarily imply that the amount should have been paidonly by cash or cheque on the date it is regarded as havingbeen paid. Payment can also be by way of adjustment froman amount which is already available with the Departmentagainst the liability as determined in the order of assessment.

RECENT UNREPORTED JUDGEMENTS OF KOLKATA TRIBUNALBy CA Sunil Surana, FCA, DISA(I.C.A.I)


WORK DISPOSAL DISPOSITIONMEMBERS SECTION

The position of disposal of various matters relating tomembers and students of EIRC as on 24/04/12

PARTICULARS DATEProprietary Firm Registration 16/04/2012Partnership Firm Registration 16/04/2012Constitution/ Reconstitution 10/04/2012Grant of Certificate of Practice 10/04/2012Fellow Admission 10/04/2012Change of Address 16/04/2012New Enrollment 06/03/2012Restoration 16/04/2012Permission of other Engagement 16/04/2012ARTICLES SECTIONThe position of action taken on various matters relatingto members and students of EIRC as on 23/04/2012 PARTICULARS DATEIndustrial training Registration 09/04/2012Re-registration 20/03/2012Termination 20/03/2012Completion 15/03/2012

Permission to Study 12/04/2012Supplementary Registration 09/04/2012Change of Address 19/04/2012BOARD OF STUDIES SECTIONThe position of action taken on various matters relatingto members and students of EIRC as on 25/04/2012CPT Registration 16-04-2012 IPCC Registration 16-04-2012 Final Registraion 29-02-2012

BY HAND BY POST

Issuance of Study Materials- CPT 24-04-2012 24-04-2012Issuance of Study Materials- IPCC 24-04-2012 24-04-2012Issuance of Study Materials- Final 24-04-2012 13-04-2012GMCS Certificate Issuance Upto Date Orientation Certificate Issuance Upto Date ITT Certificate Issuance Upto Date Change of Name/Address Upto Date

STUDY CIRCLES PROGRAMMES IN RETROSPECT – EIRCACAE CHARTERED ACCOUN-TANTS STUDY CIRCLE - EIRCThe Study Circle organised a Seminaron Union Budget / Finance Bill 2012on 17th March 2012 from 4pm atVidya MandirThe Study Circle organised a Seminaron Audit of Banks on 24th March 2012from 3pm at Emami Conference HallThe Study Circle organised a Seminaron Survey under the Income Tax Act -Important issues on 27th April 2012at Emami Conference Hall. Thespeakers were Mr. S Bandyopadhyayand Mr. N P JainDTPA CHARTERED ACCOUN-TANTS STUDY CIRCLE - EIRCThe Study Circle organised a Seminaron Union Budget / Finance Bill 2012on 17th March 2012 from 3.30pm atVidya MandirThe Study Circle organised a Seminaron Issues in Bank Audit on 24th March2012 at Rotary SadanNAGAON CHARTERED ACCOUN-TANTS STUDY GROUP - EIRC

The Study Group participated in aTeleconference on Finance Bill on 20thMarch 2012The Study Group participated in aTeleconference on Revised Schedule VIon 11th April 2012SHILLONG CHARTERED ACCOUN-TANTS STUDY GROUP - EIRCThe Study Group participated in aTeleconference on Companies Bill 2011as introduced in Lok Sabha on 10thJanuary 2012The Study Group participated in aTeleconference on Bank Audit on 7thMarch 2012The Study Group participated in aTeleconference on Finance Bill 2012 on20th March 2012The Study Group participated in aTeleconference on Revised Schedule VIon 11th April 2012The Study Group participated in aTeleconference on Principles ofInternational Tax on 17th April 2012UTTARPARA CHARTERED AC-COUNTANTS STUDY CIRCLE - EIRC

The Study Circle organised a Seminaron Union Budget 2012 on 18th March2012HOWRAH CHARTERED ACCOUN-TANTS STUDY CIRCLE - EIRCThe Study Circle organised a Seminaron 24th March 2012VIP ROAD CHARTERED ACCOUN-TANTS STUDY CICLE - EIRCThe Study Circle organised a Seminaron Bank Audit on 11th March 2012The Study Circle organised a Seminaron Union Budget / Finance Bill 2012on 17th March 2012 from 3.30pm atVidya MandirThe Study Circle organised a Seminaron Search & Seizure on 24th March2012VIEWS EXCHANGE CHARTEREDACCOUNTANTS STUDY CIRCLE -EIRCThe Study Circle organised a Seminaron Bank Audit on 31st March 2012.The speaker was CA. Ranjeet KumarAgarwal


After nearly two decades, the West Bengal Government hasre- introduced “entry tax”, on goods. The West Bengal Taxon Entry of Goods into Local Areas Act, 2012 (“Act”) hasbeen passed effective from 1st April, 2012.

According to this new tax legislation , the tax will be leviedon movement of specified goods entering into local areafrom other States for consumption, sale or use. However,goods purchased locally under tax invoice (i.e. intra statesales) would not be subject to payment of entry tax.

Under the legislation, local area includes Corporation,Municipalities, Gram Panchayats etc and tax rate is @ 1%of the invoice value. Virtually, entire West Bengal will beconsidered as local area. However, the tax so paid, willnot be allowed as credit and hence it is a cost to theorganization.

Other salient features of the Act are as under:

(1) Utilization of the Tax proceeds: Basic purpose ofintroduction of the new Tax legislation is to set up a Fund tobe called the West Bengal Compensatory Entry Tax Fund.

The proceeds of the levy under the Act, net of the cost ofcollection and incidental expense, shall be utilized exclusivelyfor the development or facilitating the trade, commerce andindustry in the State like, construction, development andmaintenance of roads and bridges for linking the market andindustrial areas, construction of transport hubs, cold storageetc.

(2) Inter state purchases : All inter state purchases(specified goods) entering into the local area includingimports for consumption , use or sale will be subject topayment of tax .

(3) Tax to pay only on Specified Goods: Only specifiedgoods are subject to payment of entry tax provided the rateof tax has been prescribed by the Government.

Specified goods liable to entry tax are :–

(a) Goods referred to in Schedule C of the West Bengal ValueAdded Tax Act, 2003 excluding the following:–

(a) All Agricultural implements;

(b) Tractors, threshers, harvesters;

(c) Chemical fertilizers including basic slag,pesticides, weedicides, insecticides, germicides,fungicides and herbicides, other than bleachingpowder;

(d) Tea;

(e) Groundnut or peanut seed, rapeseed and mustardseed;

(f) Bamboo including split bamboo, kite sticks and cut

bamboo, and cane

(b) Goods referred to in Schedule CA and Schedule D of theWest Bengal Value Added Tax Act, 2003

© Goods Specified in Schedule IV and in schedule VIII ofthe West Bengal Sales Tax Act, 1994 . ( Items underSchedule IV have not been notified ; hence not within thetax net for the time being)

(4) No tax on exempted Goods: There will be no entry taxon goods specified as Exempted Goods (Schedule A)under the VAT Act. Thus, no entry tax on goods like :–

(i) Agricultural implements;(ii) Bio-fertilisers and micronutrients;(iii) Paddy(iv) Rice;(v) Wheat;(vi) Flour (including atta, maida, suji, besan and

sattu)(vii) Pulses;(viii) Sugar;(ix) Salt(x) Textile fabrics;(xi) Vegetables;(xii) Fruits;(xiii) Egg;(xiv) Meat;(xv) Fish;(xvi) Prawns;(xvii) Livestock;(xviii) Bread;(xix) Fishnet, fishnet fabrics and fish net hook;(xx) Seeds of fish, prawn and shrimp;(xxi) LPG for domestic use;(xxii) Kerosene oil;(xxiii) Poultry feed;(xxiv) Cattle feed;(xxv) Aquatic feed;(xxvi) Raw jute;(xxvii) Hay;(xxviii) Books, periodicals and journals;(xxix) Bed sheets, pillow covers, towels, handkerchief,

blankets, mat, etc.(xxx) Newspaper;(xxxi) Oil cake;

(5) Tax on Invoice Value: Tax will be paid on the turnovervalue of imports.Turnover of import means the aggregateof the import value of specified goods which the dealerbrings or receives in any local area for the purpose ofconsumption, use or sale therein. It is the import value of aconsignment of specified goods brought or received in anylocal area for consumption, use or sale. To compute theimport value, the Invoice value or similar document to be

RE-ENTRY OF ENTRY TAX IN WEST BENGALCS Timir Baran Chatterjee


considered. In case of stock transfer, the stock transferinvoice value to be considered.

(6) Tax if goods are brought into local area forconsumption, sale or use: No tax if there is no consumption,sale or use. Purpose of the entry i.e. consumption, use orsale is very important. In case the materials are brought tothe local area in West Bengal simply for storing andthereafter it is transferred to other units of the same companyor other organization outside the state of West Bengal in thesame form , no tax under the act is applicable.

(7) No payment at Checkpost: There will be no collectionof any tax at any checkpost. The tax to be paid periodicallylike tax under VAT etc. Hence, there is no question ofdetention of consignment at the check post point. The earliersystem of payment of entry tax/octroi at the Checkpost isnot applicable under this new system.

(8) Assessment: There will be no assessment processexcepting in the following events where :

(a) No return is furnished by a registered dealer under section9(1) ;or

(b) the return furnished by a registered dealer appears tothe Commissioner to be incorrect or incomplete ;or

© a claim for refund has been made by a registered dealer;or

(d) the Commissioner is satisfied that an assessment isrequired to be made for any other purpose under the Act.

(9) Registration : The existing dealer registered under theWB Vat Act or Sales Tax Act importing goods through WayBill will be deemed to be a dealer registered under this newAct upon submitting an one page application. There is noneed to make any separate application for registration. Inthe absence of any specific declaration by the dealer, it willbe presumed that “goods entering into local area are forconsumption, use or sale.

ConclusionSince West Bengal is a deficient state in terms of rawmaterials availability and it mostly depends on inter stateimports to meet the industry’s input requirements, the abovetax will certainly increase the cost of production to someextent.

Conference Chairman :CA. Durgesh Kabra, Chairman - WIRC of ICAI

09869015418, 09323575801

Conference Co-Chairmen :CA. Prasun Kumar Bhattacharya, Chairman

EIRC of ICAI, 09830056571CA. K. Vishwanath, Chairman - SIRC of ICAI,

09945525595CA. Mukesh Singh Kushwah, Chairman - CIRC of ICAI,

09810470274, 09310470274CA. Durga Das Agrawal, Chairman - NIRC of ICAI,

09811075092

(2) Registration Fees, Cheque / DD to be drawn in favour of “Baroda Branch of WIRC of ICAI”, payable at Baroda. Delegates can also make online E-Payment onwww.barodaicai.org (delegates making online payment have to submit their details via e-mail/post on given address of Baroda Branch of WIRC of ICAI)

(3) Registration is strictly on first come first serve basis, send your registration in advance to avoid last minute rush as seats are limited.(4) Delegates interested to participate in the cultural evening are requested to register with CA. Viral Shah, Convener - Program Committee up to May 31, 2012, Mob.:

+91 98243 62211.(5) For Sight Seeing (A) Local Sight Seeing by Vadoda Municipal Seva Sadan - Half Day Tour Rs. 300 per person. (B) Visit to Akshardham Temple, Gandhinagar - Full

Day tour Rs. 1000 per person, minimum 20 participants. Timings : 7 am to 7 pm. Contact : CA. Arpan Dodia (M) 98983 83530For Further details please visit: www.eircicai.org, [email protected], or [email protected]

FEESMembers 2400 up to (21.05.2012)2800 thereafterNon-Members 3200

2nd ICAI ALL REGION CONFERENCE, 2012Organized by :

Western, Southern, Eastern, Central & Northern India Regional Councils ofThe Institute of Chartered Accountants of India

Hosted By:Baroda & Nagpur Branches of WIRC of ICAI

Date: Friday 8th June & Saturday 9th June, 2012Venue : Sir Sayaji Rao Nagar Gruh, Akota, Baroda, Gujrat

12 CPE HrsConveners of Regional Registration Committee :

Per person(Non-Residential)

CA. Anil Bhandari, Secretary, WIRC of ICAI,09821037605CA. P .V. Rajarajeswaran, Secretary, SIRC of ICAI, 09843036311

CA. Subhash Chandra Saraf, Secretary, EIRC of ICAI,09831087579CA. Ankush P. Golechha, Secretary, CIRC of ICAI, 09826123598

CA. Pramodkumar Maheshwari, Secretary, NIRC of ICAI, 09810017953CA. Nayan Kothari , Secretary,

Baroda Branch of WIRC of ICAI, 09824433445CA. Ashwini Agrawal, Secretary,

Nagpur Branch of WIRC of ICAI, 09823162968

NOTES:(1) Fees are inclusive of course material, breakfast, lunch on June 8 & 9, 2012

& Mega Cultural evening followed by dinner on June 8, 2012. For outstationDelegates,accommodation is available on payments basis. Delegates arerequested to inform & register in advance. Hotel details are given in theregistration form.


The aftermath of the Satyam debacle saw the spate ofregulatory investigations culminating in the Yashwant SinhaCommittee which took up the onerous task of modifying the55 years old Companies Act 1956. The Ministry of CorporateAffairs introduced the much awaited Companies Bill 2011inthe Lokh Sabha and the same is expected to be enacted inthe current fiscal.

The promulgation of the new Act is a step towardsglobalization and is a successful attempt to meet thechanging environment . In many ways , it is progressive andfuturistic duly envisaging the technological and legaldevelopments that have taken place in the last few decades.The new law promises investor democracy and addressesthe public concern over corporate accountability andresponsibility also introducing some industry friendlyprovisions.

Some of the major provisions of the Bill are discussed below:

The Bill prescribes 33 new definitions. Some of the majornew definitions introduced are

o Associate Company

o Small Company

o Employee Stock Option

o Promoter

o Related Party

o Turnover

o Chief Executive Officer

o Chief Financial Officer

o Global Depository Receipt

� The Financial Year of any Company can be only fromApril-March and companies complying with certainconditions can have a different financial year with theapproval of Tribunal. Under the Companies Act 1956,there was no restriction on the period of financial year.

� The maximum number of members, which a PrivateCompany can have, is increased from 50 as providedin the Companies Act 1956 to 200.

� The scope of officer under default has been broadened.The share transfer agents, registrars and merchantbankers to the issue or transfer related to issue ofshares & Chief Financial Officer are also brought underits ambit. Directors who aware of the default by way ofparticipation in board meeting or receiving the minuteswithout objecting to the same will also be included inthis category even if company has Managing Director /Whole Time Director / other Key ManagerialPersonnels.

Companies Bill 2011 - critical proposalsBy CA Arijit Chakraborty

Measures to address corporate frauds and corruption:The biggest challenge is to tackle corporate corruption andfrauds without hurting the Indian enterprise. This can beensured only if there is a level-playing field in almost allbusiness sectors. This can be achieved by enshrining in thelaw ( similar to Sarbanes Oxley Act of 2002) a prohibitionagainst corrupt practices as they exist in developed countriesand providing stringent punishment for violation. In additionto a statute-backed Serious Fraud Investigation Office(SFIO), the SFIO should also be empowered to investigateinto serious corrupt practices by companies on a fast trackbasis and prosecute effectively. In the investigation by SFIO,professionals such as forensic auditors / accountants andcorporate lawyers should be involved. The powers of SFIOhas been enhanced in the Bill.

National Financial Reporting Authority ( NFRA) to becreated to monitor and oversee accounting & auditing issues,professional misconduct by auditors & firms ( this is uncalledfor as ICAI has always been playing its regulatory role &discharging its duties effectively)

Judicial system for company law: The Companies Bill,provides for National Company Law Tribunal(s) (NCLTs) andan Appellate Company Law Tribunal. While this may seemto be a pragmatic approach in the context of the docketexplosion in the judiciary, given the track record of tribunalsin this country, such a measure may not be desirable , unlesssystemic changes take place.

Reinforcing the audit function: Auditor rotation - Foreffective corporate governance, a strong audit function isnecessary. In the Indian context, to prevent corporate fraudsand corruption, the importance of the audit function neednot be over-emphasised. In order to bring about greaterobjectivity and independence to the audit function, statutoryauditors should be rotated every 10 years . The auditors willbe appointed for a period of 5 years in one go and can bereappointed for another 5 year period. The Bill also removesthe difference between ‘partners’ and ‘firm of partners’ , soaction against a firm of auditors can also be initiated underthe Bill. However the Mandatory Rotation of Auditors everyfive years, subject to maximum 10 years ( 2 appointments),will pose problem, as maintaining auditors panel will bedifficult)

Strengthening the institution of independent directors:The clause contained in the Companies Bill, 2011, regardingthe definition of an independent director, says that theindependent director should not have any pecuniary interestswith the company or its associates other than his entitlementfor remuneration in law. The independent director shouldnot be a relative of the promoter. The appointment of anindependent director should be through a transparentprocess under the guidance of the remuneration andnomination committee of the board of directors of the


OBITUARY(Members left for heavenly abode. We pray to the Almighty ‘may their soul rest in peace’.)

CA Kajal Kumar Banerji(M. No. 3995)

Left us on 4th February 2012

LIBRARY NEWS

CA Subodh Kumar Hajra(M. No. 053068)

Left us on 2nd April 2012

company. The Bill has also brought huge responsibilities,accountability and transparency on the roles of theindependent director and fixed tenure of 5 years for them,similar to auditors. The changes in provisions relating to‘Independent directors’ , 5 years term, 3 years cooling periodthan again 5 years ( logic of 3 years cooling period isunknown, as many things in the company will change bythen, directors will need more time for induction)

Corporate social responsibility (CSR): The Bill proposesspending of 2 % of net profits on CSR by eligible companies,ie above Rs 500 crore networth, Rs 1000 crore turnover orRs 5 crores profit. While corporate social responsibilityshould be encouraged by law, it should not be mademandatory so as not to deprive it of its legitimacy. It isprovided in the Bill that CSR initiatives of the company shouldbe stated in the directors’ report of the company. (but MCAhas not given clear guidelines on what is CSR initiative)

OPC : The concept of One Person Company (OPC) hasbeen introduced and the said company will be formed as aprivate limited company. This concept has been introducedfor the first time.

Utilisation of proceeds : Company, which has raised moneyfrom public through prospectus and still has any unutilisedamount out of the money so raised, shall not change itsobjects unless a special resolution is passed by the companyand other requirements of advertisement and exit opportunityto dissenting shareholders is complied with, there was nosuch requirement under the Companies Act 1956

Women on Board : At least 1 woman Independent director, no stock options for independent directors ( welcome move)

Auditors to comply with all auditing standards ( seemsto be - too much burden as audit time and fees are mostlythe same), auditors penalty proposed- 3 times fraud amountand upto 10 years imprisonment ( seems auditors have beensharply targeted , without adequate grounds)

It seems that the Satyam episode has overshadowed manyof the provisions of the Companies Bill 2011. There are manyprovisions which have good intentions but successfulpractical implementation will have huge challenges, speciallyin an emerging economy like India with its own complexitiesof socio-political and economic issues.

Every year from April to March EIRC Library is continuouslystriving to update its stock according to the need of theMembers and Students. While selecting the titles EIRCLibrary takes care even to support the Research work, PostQualification courses, different developmental programmesof the Institute to help in conservation of knowledge andideas.The Different Library services that EIRC provides:-�� Members ServicesAir -Conditioned Reading Room with latest configuredcomputers with Internet connectivity along with the supportof well-stocked Library is available for Members.�� Digital Library – Intranet Services��Internet Browsing��Capitaline Database – provides fundamental and marketdata on more than 22,000 Indian listed and unlistedcompanies classified under 300 Industries.��IBFD online (International Tax Academy)��Direct tax Encyclopaedia package (TP Multimedia)��Service Tax Encyclopaedia package “��Company Law Encyclopaedia package “

�� OPAC – On line public access Catalogue, link to ICAIwebsite to search Books & Periodicals available in EIRCLibrary.��ICAI publications,CDs/DVDs available ( public domain).� Facility to access and borrow the resources ofAmerican Centre Library at Jawaharlal Nehru Road.�� Students Services- Separate Reading Hall at Park Circus is available for theStudents.All trypes of reading material includingpublications,newspaper ,books &Journals are there forreference reading.Students lending facility is available at EIRC LibrarySuggestion for new titles ,non book materials andimprovement of Library services are welcome forbetterment.Library membership deposit –For Members Rs.500/-For Students Rs.500+10+510/-Forms may be downloaded fromeircicai.orgFor any further information mail [email protected]/[email protected], Phone-033 30211103/05.


Monetary policy primarily deals with the supply of money inthe economy. Broadly it aims at fulfilling certain objectives orgoals for the betterment of the economy and as a resultinstruments of monetary control, its efficacy andimplementation are critical and important to the society atlarge. India‘s monetary policy since the first plan period wasone of ‘controlled expansion‘- that is, a policy of adequatefinancing of economic growth ensuring reasonable pricestability. Thus, RBI helped the economy to expand viaexpansion of money and credit and attempted to check risein prices through monetary and other control measures.Monetary policy is related to the availability and cost of moneysupply in the economy in order to attain certain broadobjectives. The Central Bank of a nation keeps control onthe supply of money to attain the objectives of its monetarypolicy.The package of economic reforms, which are expected tohave long-term impact on the economy, includes fiscal,monetary, financial, and industrial and export-import (EXIM)sector reforms. The reforms in monetary and credit policiesaimed at slowing down monetary expansion and therebycontrolling inflation. Economic activity generally follows acycle — increased activity in terms of output and employment,followed by decreased activity. Countercyclical policies actto promote or support growth and employment when theactivity is at low ebb and vice versa. The objective is toachieve balanced and sustained economic activity over time,preventing adverse features like high inflation, and fiscal andcurrent account deficits. Therefore, policies also follow acycle, a tightening phase followed by an easing phase.Indian Economy at a glance� GDP growth moderated to 6.1 per cent during Q3 of 2011-

12 from 6.9 per cent in Q2 and 8.3 per cent in thecorresponding quarter of 2010-11. This was mainly dueto moderation in industrial growth from 2.8 per cent inQ2 to 0.8 per cent in Q3. The services sector held uprelatively well (with growth being 8.7 per cent in both Q2and Q3 of 2011-12). Overall, GDP growth during April-December 2011 slowed significantly to 6.9 per cent from8.1 per cent in the corresponding period of the previousyear.

� Growth in the index of industrial production (IIP)decelerated to 3.5 per cent during 2011-12 (April-February) from 8.1 per cent in the corresponding periodof the previous year. In terms of use-based classification,while capital goods and intermediate goods sectorsregistered negative growth of 1.8 per cent and 0.9 percent, respectively, the growth of the consumer durablessector decelerated to 2.7 per cent. These trends suggestthat activity may have expanded slower than 6.9 per centin Q4 implied in the advance estimates of GDP.

� An analysis of corporate performance during Q3 of 2011-12, based on a common sample of 2,352 non-

Highlights of Monetary Policy 2012-13

governments, non-financial companies, indicates thatsales growth was relatively robust even after adjusting forinflation. However, earnings before depreciation interestand tax (EBDITA) and profit after tax (PAT) marginscontinued on the downward trajectory that began earlierin the year. These patterns suggest a steady decline inthe pricing power, as producers found it increasinglydifficult to pass on rising input costs to their customers.

� Liquidity conditions remained in a deficit mode throughout2011-12. However, beginning November 2011, theliquidity deficit went beyond the comfort level of (+)/(-)one per cent of net demand and time liabilities (NDTL) ofbanks. Average net injection of liquidity under the dailyliquidity adjustment facility (LAF) increased from around0.5 trillion during April-September 2011 to around 1.4trillion during February 2012 and further to 1.6 trillionduring March 2012, partly reflecting a build-up ingovernment cash balances.

� The currency market was under pressure during August-December 2011 due to a slowdown in capital inflowsreflecting global uncertainty. However, conditions easedin Q4 of 2011-12 reflecting a pick up in capital inflows aswell as the impact of policy measures undertaken toimprove dollar supply and contain speculation.Considering the current economic position of India,following are the key changes /guidelines proposed inthe monetary policy 2012-13:

Repo rate/Reverse Repo rate and CRRRepo rate under the liquidity adjustment facility (LAF) hasbeen reduced by 50 basis points from 8.5 per cent to 8.0 percent while reverse repo rate under the LAF, determined witha spread of 100 basis points below the repo rate, standsadjusted to 7.0 per cent.The reduction in the repo rate is based on an assessment ofgrowth having slowed below its post-crisis trend rate which,in turn, is contributing to a moderation in core inflation.However, it must be emphasized that the deviation of growthfrom its trend is modest. At the same time, upside risks toinflation persist. These considerations inherently limit thespace for further reduction in policy rates.In order to provide greater liquidity cushion, it has beendecided to raise the borrowing limit of scheduled commercialbanks under the marginal standing facility (MSF) from 1 percent to 2 per cent of their net demand and time liabilities(NDTL) outstanding at the end of second preceding fortnightwith immediate effect. The MSF rate, determined with aspread of 100 basis points above the repo rate, standsadjusted to 9.0 per cent.While the cash reserve ratio (CRR) of scheduled banks hasbeen retained at 4.75 per cent of their NDTL, the Bank Ratestands adjusted to 9.0 per cent as per the recent changes inthe policy.

CA Anirban Datta


Financial InclusionIt was indicated in the Monetary Policy Statement of May2011 that all public and private sector banks had preparedand submitted their board approved three-year financialinclusion plans (FIPs). These contained self-set targets inrespect of opening of rural brick and mortar branches;deployment of business correspondents (BCs); coverage ofunbanked villages with population above 2,000 as also otherunbanked villages with population below 2,000 throughbranches/BCs/other modes; opening of no-frills accounts;kisan credit cards (KCCs) and general credit cards (GCCs)issued; and other specific products designed by them to caterto the financially excluded segments.Going forward, the focus will be more on the number andvalue of transactions in no-frills accounts and credit disbursedthrough information and communication technology (ICT)based BC outlets. For the purpose, banks have been advisedthat FIPs prepared by their head offices are disaggregatedat respective controlling offices and further at branch levels.They were also advised to put in place a mechanism tomonitor the progress at these levels periodically.In pursuance of the announcement made in the MonetaryPolicy Statement of April 2010, the roadmap to providebanking services in every village with a population above2,000 was finalized by state level bankers’ committees(SLBCs). Under the roadmap, 74,414 villages with populationabove 2,000 were identified as unbanked, which wereallocated to various banks, including regional rural banks(RRBs) for providing banking services by March 2012. Bankshave covered 74,199 (99.7 per cent) of these unbankedvillages. Now the challenge is to cover all the unbankedvillages of the country. Accordingly, it is proposed to mandateSLBCs to prepare a roadmap covering all unbanked villagesof population less than 2,000 and notionally allot thesevillages to banks for providing banking services in a time-bound manner.Priority Sector LendingAs indicated in the SQR of October 2011, the Reserve Bankhad constituted a Committee to re-examine the existingclassification and suggest revised guidelines with regard topriority sector lending classification and related issues. TheCommittee submitted its report in February 2012. It madethe following major recommendations: (i) the existing targetof the domestic scheduled commercial banks for lending tothe priority sector be retained; (ii) the sector ‘agriculture andallied activities’ be a composite sector within priority sector;(iii) a sub-target for small and marginal farmers withinagriculture and allied activities be segregated; (iv) a sub-target for micro enterprises under the micro and smallenterprises (MSE) category be stipulated; (v) the prioritysector target for foreign banks be increased to 40 per cent ofadjusted net bank credit (ANBC) or credit equivalent of off-balance sheet exposure (CEOBE), whichever is higher withsub-targets of 15 per cent for exports and 15 per cent for theMSE sector; (vi) non-tradable priority sector lendingcertificates (PSLCs) be allowed on a pilot basis; (vii) bankloans to non-bank financial intermediaries for on-lending to

specified segments be allowed to be reckoned forclassification under priority sector, up to a maximum of 5 percent of ANBC or CEOBE, whichever is higher; and (viii) thepresent system of report-based reporting may be improvedthrough data-based reporting.Licensing of Co-operative BanksThe Committee on Financial Sector Assessment hadrecommended that rural co-operative banks, which failed toobtain a license by end-March 2012, should not be allowedto operate. The Reserve Bank, along with the National Bankfor Agriculture and Rural Development (NABARD)implemented a roadmap for issuing licenses to unlicensedstate co-operative banks (StCBs) and district central co-operative banks (DCCBs) in a non-disruptive manner, toensure the completion of licensing work by end-March 2012.After considering the NABARD’s recommendations forissuance of licenses based on inspection/quick scrutiny, oneout of 31 StCBs and 41 out of 371 DCCBs were found to beunable to meet the licensing criteria by end-March 2012. Inthis regard, suitable action will be initiated in due course.Urban Co-operative Banks (UCBs)At present, UCBs are permitted to assume aggregateexposure on real estate, commercial real estate and housingloans up to a maximum of 10 per cent of their total assetswith an additional limit of 5 per cent of their total assets forhousing loans up to 1.5 million. In order to facilitate enhancedpriority sector lending, it is decided to permit UCBs to utilizethe additional limit of 5 per cent of their total assets for grantinghousing loans up to 2.5 million, which is covered under thepriority sector.Abolition of Foreclosure Charges/Prepayment Penaltyin Home LoansIt is felt that the removal of foreclosure charges/prepaymentpenalty on home loans will lead to a reduction in thediscrimination between existing and new borrowers and thecompetition among banks will result in finer pricing of homeloans with the floating rate. Though many banks have, in therecent past, voluntarily abolished the pre-payment penaltieson their floating rate home loans, there is a need for ensuringuniformity across the banking system in this regard.Accordingly, it is proposed not to permit banks to levyforeclosure charges/pre-payment penalties on home loanson a floating interest rate basis.Minimal variation in Interest Rate on DepositsThe Reserve Bank has stipulated, inter alia, that banks shouldnot discriminate in the matter of interest rate paid on deposits,except in respect of fixed deposit schemes specifically meantfor resident Indian senior citizens and single term depositsof 1.5 million and above. However, it is observed that thereare wide variations in banks’ retail and bulk deposits rates,making it unfair to retail depositors. Further, banks are offeringsignificantly different rates on deposits with very littledifference in maturities. This suggests inadequate liquiditymanagement system and inadequate pricing methodologies.It is, therefore, advised that banks should have a boardapproved transparent policy on pricing of liabilities and they


should also ensure that variation in interest rates on singleterm deposits of 1.5 million and above and other term depositsis minimal.Unique Customer Identification Code for Banks’Customers in IndiaAvailability of a unique customer identification code (UCIC)will help banks to identify a customer, track the facilitiesavailed, monitor financial transactions in various accounts,improve risk profiling, take a holistic view of customer profileand smoothen banking operations for the customer. Whilesome of the Indian banks have already developed UCIC,there is no unique number to identify a single customer acrossthe organization in many banks. In this regard, theGovernment of India has proposed the introduction of uniqueidentifiers for customers across different banks and financialinstitutions. While such a system for the entire financialsystem is desirable, it is likely to take quite some time for acomplete roll out. As a first step, banks are advised to initiatesteps to allot UCIC number to all their customers whileentering into any new relationships in the case of all individualcustomers to begin with. Similarly, existing individualcustomers may also be allotted unique customer identificationcode by end-April 2013.Basic Bank Deposit AccountFinancial inclusion has been high on the agenda of theReserve Bank. With a view to providing fillip to this concept,banks were advised, in November 2005, to make availablea basic banking ‘no-frills’ account with either ‘nil’ or very lowminimum balance as well as charges that would make suchaccounts accessible to vast sections of the population. Thenomenclature of the account in this manner has tended tosignify that these accounts are opened more with a view toindicating achievement of numerical targets under thefinancial inclusion plans. On a review, it has been decided tomodify the guidelines on opening of basic banking ‘no-frills’accounts with a view to doing away with the stigmaassociated with the nomenclature and making the basicbanking facilities available in a more uniform manner acrossthe banking system. Accordingly, it is proposed that banksshould offer a ‘basic savings bank deposit account’ withcertain minimum common facilities and without therequirement of minimum balance to all their customers.Implementation of Basel III Capital RegulationsReserve Bank of India has prepared the draft guidelines onBasel III – Implementation of Capital Regulations in India,which were placed on its website in December 2011, forcomments/suggestions from various stakeholders. The draftguidelines provide for a roadmap for smooth implementationof Basel III capital regulations in terms of the transitionalarrangements (phase-in) of capital ratios and grandfathering(phase-out) of ineligible capital instruments. The ReserveBank is also in the process of estimating, on the basis ofdata collected from banks, the likely impact of the proposedBasel III norms on banks’ capital position and leverage. Theestimation exercise, as also the comments/suggestions fromvarious stakeholders, will form the basis for finalizing theguidelines on capital regulations. It is proposed to issue thefinal guidelines on the implementation of Basel III capitalregulations by end-April 2012.

Bank Finance to NBFCs Predominantly Engaged inLending against GoldNBFCs that are predominantly engaged in lending againstcollateral of gold jewellery have recorded significant growthin recent years, both in terms of their balance sheet size andphysical presence. Certain prudential measures have beentaken on account of regulatory concerns, given the rapid paceof their business growth and the nature of their businessmodel which has inherent concentration risk. The measuresinclude a loan-to-value (LTV) ratio not exceeding 60 per centfor loans against collateral of gold jewellery and a minimumTier 1 capital of 12 per cent by April 1, 2014. It has also beenstipulated that NBFCs should not grant any advance againstbullion/primary gold and gold coins. Also it is proposed thatbanks should reduce their regulatory exposure ceiling in asingle NBFC, having gold loans to the extent of 50 per centor more of its total financial assets, from the existing 10 percent to 7.5 per cent of bank’s capital funds. However,exposure ceiling may go up by 5 per cent, i.e., up to 12.5 percent of bank’s capital funds if the additional exposure is onaccount of funds on-lent by NBFCs to the infrastructuresector; and banks should have an internal sub-limit on theiraggregate exposure to all such NBFCs, having gold loans tothe extent of 50 per cent or more of their total financial assets,taken together.White Label ATMsAt present, only banks are permitted to set up automatedteller machines (ATMs) in India. The Reserve Bank has sincereviewed the policy on ATMs and it has been decided topermit non-banks to set up, own and operate ATMs toaccelerate the growth and penetration of ATMs in the country.Such ATMs will be in the nature of white label ATMs (WLA)and would provide services to customers of all banks. Whilesuch WLAs will be owned and operated by non-bank entities,cash management and customer grievance redressal willbe in the domain of the sponsor banks.Let’s expect that the monetary policy 2012-13 would helpsignificantly to maintain its vigil on controlling inflation whilebeing sensitive to risks to growth and other vulnerabilities.

CORRIGENDUM

CA Vikash Kr Jain,Secretary,

Guwahati Branch

This photograph is of CA Vikash KumarJain, Secretary, Guwahati Branch whichwas not printed/placed in the 3rd positionfrom the left against Guwahati Branchin the March, 2012 (Issue No. 2, PageNo.4, Volume 38) of EIRC Newsletter.However, inadvertently, a photo of CA.Vikash Kumar Jain, Chairman, DurgapurBranch has been erroneously placed.Further, CA. Kailash Prasad Sarda, 5th

position from left against GuwahatiBranch had been inadvertently designated as the Treasurerof Guwahati Branch in the March, 2012 (Issue No. 2, PageNo.4, Volume 38) of EIRC Newsletter whereas he is theMember of the Managing Committee of the said Branch.The Editorial Board sincerely regrets the above inadvertenterrors.


NICHE TECHNOLOGIESPRIVATE LIMITED

Category ISEBI AUTHORISED REGISTRARS &

SHARE TRANSFER AGENTS(Registration No- INR000003290)

� Registrars to IssuesRegistrars to IssuesRegistrars to IssuesRegistrars to IssuesRegistrars to Issues� Share TShare TShare TShare TShare Transfer Agentransfer Agentransfer Agentransfer Agentransfer Agent� Connectivity to NSDLConnectivity to NSDLConnectivity to NSDLConnectivity to NSDLConnectivity to NSDL� Connectivity to CDSLConnectivity to CDSLConnectivity to CDSLConnectivity to CDSLConnectivity to CDSL

D-511, Bagree MarketD-511, Bagree MarketD-511, Bagree MarketD-511, Bagree MarketD-511, Bagree Market71, B.R.B.Basu Road, Kolkata-700 00171, B.R.B.Basu Road, Kolkata-700 00171, B.R.B.Basu Road, Kolkata-700 00171, B.R.B.Basu Road, Kolkata-700 00171, B.R.B.Basu Road, Kolkata-700 001Phone: 2235 7271/7270/5236, 2234 2318/3576Phone: 2235 7271/7270/5236, 2234 2318/3576Phone: 2235 7271/7270/5236, 2234 2318/3576Phone: 2235 7271/7270/5236, 2234 2318/3576Phone: 2235 7271/7270/5236, 2234 2318/3576

Fax: 2215 6823Fax: 2215 6823Fax: 2215 6823Fax: 2215 6823Fax: 2215 6823E-mail: [email protected]: [email protected]: [email protected]: [email protected]: [email protected]

WWWWWebsite : wwwebsite : wwwebsite : wwwebsite : wwwebsite : www.nichetechpl.com.nichetechpl.com.nichetechpl.com.nichetechpl.com.nichetechpl.com

Contact Persons : � Mr. S. Abbas - 9830326165� Mr. A.Dutta - 9331212314� Ms. Swati Sharma - 9830022251

SEMINAR ON CORPORATE LAWS, LLP & XBRLOrganised by

Eastern India Regional CouncilThe Institute of Chartered Accountants of India

Fees can be paid by Cheque / Draft drawn in favour of “The Institute of Chartered Accountants of India, EIRC”payable at Kolkata. Cash can be paid on the programme day at the venue. For Online Registration please visitwww.eircicai.org Register early to avoid disappointment

Date : Saturday, 12th May, 2012 �� Time : 10.00am to 5.00pm

Venue : Park Hotel, Kolkata

Chief Guest : Dr. Navrang Saini, Regional Director, Eastern Region, MCA

Guest of Honour : Mr. Debashis Bandyopadhyay, Registrar of Companies, W. B., MCA

Fees 1200

6 HrsCPE ` ̀` ` `

TOPICS SPEAKERS

��LLP CA Vinod Kothari

��XBRL CS Mamta Binani

��Revised ScheduleVI CA Debashis Mitra

Registration from 9.30pm onwards


Organised byEastern India Regional Council

The Institute of Chartered Accountants of India Fees 600

6 HrsCPE ` ̀` ` `

SEMINAR ONRECENT AMMENDMENTS IN VAT LAWS INTRODUCTION OF ENTRY TAX

& MOCK BOARD PROCEEDINGS

Date: Saturday, 12th May, 2012 �� Time: 10.00am to 5.00pmVenue: R.Singhi Hall, EIRC

Chief Guest : Mr. Vinod Kumar, Commisioner of Commercial Taxes Govt of W.B**

Registration from 9.30pm onwards

Sports Category

BadmintonBadmintonBadmintonBadmintonBadminton

Table TTable TTable TTable TTable Tennisennisennisennisennis

ChessChessChessChessChess

CarCarCarCarCarromromromromrom

Indoor Sports Festival for Studentson Sunday, 27th May 2012

Organised by : EICASA of EIRCMembers are also invited to participate.

Venue: Silver Spring Club, 5, J.B.S Haldane Avenue (EM Bypass) Kolkata-700105Time : 10am to 4.00pm

For participation in Sports Categoryplease contact:

For MembersMr. Amit Paul,Executive Officer

Ph. 30211104/33/34/44Email: [email protected]

For StudentsMr Ankit Bidasaria, Vice Chairman,

EICASA, M : 9051054351

Mr Pallab GhoshEmail : [email protected]

Ph. : 30211123

Last date for receiving applications22nd May,2012

In email and correspondence mentionthe sports category

First Session

Mr Khalid Aizaz Anwar, Jt Comm of Sales Tax, Govt of W.B. Recent Changes in W.B VAT

CA Rip Das Impact & Introduction of Entry Tax

Second Session – Mock Board Proceedings

Mr. K.Y.S Manhas, Hon’ble President, W.B Commercial Taxes, Hon’ble Judicial MemberAppellate & Revisional Board, Govt of W.BMr Anil Sarkar, Hon’ble Member, W.B Commercial Taxes, Hon’ble Administrative MemberAppellate & Revisional Board, Govt of W.BMs Lovely Mukherjee, Jt Commissioner of Sales Tax, Govt of W.B Departmental RepresentativeMs Anjana Chakraborty, Jt Commissioner of Sales Tax, Govt of W.B Departmental RepresentativePracticing Chartered Accountants Authorised Representative

** Confirmation awaited


BRANCH / STUDY CIRCLE PROGRAMMES IN RETROSPECT-EIRCCUTTACK BRANCH

LtoR: CA. Jayanta Kumar Sahoo,CA. M V Sarma, CA.Rajkumar Routray, Chairman,Cuttack Branch,Shri Abhaya Charan Naik, IRS, Commissioner of Income Tax,CA.Chandra Sekhar Veeraghanta,CA. Pawan Kumar Udayapuria, Secretary, Cuttack Branch.

Lto R : CA. Prasant Kumar Bal, Past Chairman of Bhubaneswar Branch, Sri Rajiv Verma, General Manager(NW-1), State Bank of India, LHO, Bhubaneswar, CA. Rajkumar Routray, Chairman of Cuttack Branch, CA. P RSuresh, Treasurer, SIRC, Chennai, CA. Pawan Kumar Udayapuria, Secretary of Cuttack Branch.

GUWAHATI BRANCH

SILIGURI BRANCH

CPE PROGRAM ON “Issues Related to E-TDS & E-VAT Returns on 10th March 2012: CPE PROGRAM ON “Bank Audit & Union Budget 2012 on 20th March 2012

The programme was held jointly with CII (Confederation of Indian Industry) and STBA (Siliguri Taxation BarAssociation)

The speaker CA . A K Jain explained the provisions of NPA and other aspects of Bank Audit

Speaker Dr. Girish Ahuja and CA Narayan Agarwal.

ROURKELA BRANCH

L to R:- CA Veena Hingarh,CA Sailesh Agarwal, CA Rajendra Pasa Agarwal,Shri Sarada PrasadNayak,Hon’ble Minister,Housing and Urban Development, Govt of Odisha,CA Rakesh Kr Jain,Chairman, BBSR Branch, CA R.K.Vyas

SAMBALPUR BRANCH

L to R : CA Mahendra Agrawal,CA Sunil Kakkad,CA Nabin K Lath,Sambalpur Br Chairman.

Felicitation of CA Subodh Kr Agrawal,Vice Presient, ICAI atSambalpur

Seminar on Union Budget held on 21.03.2012 at ICAI Bhawan, Cuttack Seminar on Bank Audit 2012 on 26.03.2012

Seminar on union budget 2012 & bank audit

CPE Seminar on Bank Audit and Direct Tax Proposals of Budget2012 held on 24th March2012

Seminar on Bank Audit on 17.03.2012A panel discussion on Union Budget’2012 on 16th of March’2012

Seminar on Union Budget held on 25.03.2012



Workshop on Insurance on 20th March, 2012 at Grand Hotel

Lighting of the Inaugural lamp: L to R: CA. Sushil Kr. Goyal, Member, EIRC, CA. Ranjeet Kr. Agarwal, Vice-Chairman, EIRC, CA. Prasun Kr. Bhattacharyya, Chairman, EIRC, CA. Sumantra Guha, Council Member, ICAI,Shri Sriram Taranikanthi, Executive Director & Financial Advisor, IRDA, CA. J. Venkateswarlu, Council Member& Chairman, COBIP, ICAI, CA. Subodh Kumar Agrawal, Vice -President, ICAI.

CA.Prasun Kr. Bhattacharyya,Chairman, EIRC, addressing the gathering, L to R: CA AbhijitBandyopadhyay, Council Member, ICAI, CA. Subodh Kumar Agrawal, Vice -President, ICAI, Sri. R.K.Nair, Member, IRDA, CA. J. Venkateswarlu, Council Member & Chairman, COBIP, ICAI, Shri SriramTaranikanthi, Executive Director & Financial Advisor, IRDA, CA. Sumantra Guha, Council Member, ICAIand Ranjeet Kr Agarwal, Vice Chairman, EIRC.

CA. Krishanu Bhattacharyya, Member, EIRC, CA. J. Venkateswarlu,Council Member & Chairman,COBIP, Shri S.K. Goswami, CA. Pradipta Roy, CA. S.N. Jayasimhan.

CA.Shri S.K.Goswami, CA. Pradipta Roy,GM (Finance), National Insurance Co. Ltd, CA. Sushil Kr.Goyal, Member, EIRC

Conference on Private Equity in India on 23rd March, 2012 at Taj Bengal

CA. Prasun Kr. Bhattacharyya,Chairman, EIRC, Rakesh Sony (Director),Motilal Oswal Private EquityAdvisors Pvt. Ltd, CA. Ranjeet Kr. Agarwal, Vice-Chairman, EIRC,

Mr Anurag Singhi, Director,Baker Tilly Singhi Consultants Pvt. Ltd., CA. Pramod Dayal Rungta,Treasurer, EIRC.

Mr Subir Nag, Director, ICICI Venture Funds Management Company Ltd, Mr. Amit Ladsaria,CA VinodKothari,Mr Manoj Parasar, Principal Investment Officer,IFC Washington. Mr. Samir Agarwal,Director,Indcap Advisors Pvt. Ltd.

CA. Prasun Kr. Bhattacharyya,Chairman, EIRC, Mr. Amit Ladsaria, Director, Turtle India, Mr NitinJain, Director,Indcap Advisors Pvt. Ltd., CA. Subhash Chandra Saraf, Secretary, EIRC.

CA. R. Chandrasekhar, CA. Subhash Chandra Saraf, Secretary, EIRC, CA. S. N. Jayasimhan, Joint Director(Investment), IRDA, CA. Pramod Dayal Rungta, Treasurer, EIRC.

CA. Prasun Kr. Bhattacharyya, Chairman, EIRC, CA V.Manickam, CEO, LIC Pension Fund , Shri S. K.Goswami



Aglimpse of the audience

CA Prasun Kr Bhattacharyya, Chairman, EIRC giving his welcome address. Sitting from L to R:CA Ranjeet Kr Agarwal, Vice Chairman, EIRC, CA Dipankar Chatterji, Former Council Member, ICAI, CA Santanu Ghosh

CA Sushil Kr Goyal, Member, EIRC

Seminar on Bank Audit on 1st April, 2012 at EIRC Premises

Seminar on Revised Schedule VI on 17th April, 2012

L to R: CA. Prasun Kr. Bhattacharyya, Chairman, EIRC and CA Debashis Mitra.

CA Dipankar Chatterji, Former Council Member,ICAI

CA Santanu Ghosh

CA Neena Maheshwari

CA Dipankar Nandi

L to R : CA Krishanu Bhattacharyya, Member, EIRC, CA Anirban Datta, CA Neena Maheshwari, CA Dipankar Nandi,CA Sushil Kr Goyal, Member, EIRC and CA Prasun Kr Bhattacharyya, Chairman, EIRC.

CA Anirban Datta

L to R : CA. Durgesh Kabra,Chairman, WIRC,CA K. Viswanath, Chairman, SIRC,CA Subodh Kr Agrawal,Vice President,ICAI,CA JaydeepNarendra Shah,President,ICAI,CA Prasun Kr Bhattacharyya, Chairman, EIRC, CA. Mukesh Singh Kushwah,Chairman, CIRC and CA (Dr)Durga Das Agrawal, Chairman, NIRC

Chairmen meet at New Delhi on 23rd April, 2012

Aglimpse of the audience

Documents

EIRC Newletter