Monthly archive

January 2009

Scope of an audit is different from that of an investigation

January 30, 2009
Investigators, regulators and stakeholders of fraud-hit Satyam Computer Services attribute auditor’s failure in detecting the fraud to either negligence, incompetence or blatant connivance with the promoters who cooked books for years. Ideally, auditors, who accept hefty fee, should ensure that they independently verify all documents they rely on before certifying

ICAI proposal may hit audit firms here

January 29, 2009
Indian audit firms, that informally work as the audit arms of big foreign accounting firms, may soon have to sever their foreign affiliations, if accounting and auditing rule maker ICAI has its way. In what could be a fall-out of the Satyam account fabrication episode, the Institute of Chartered Accountants

Limited Liability Partnership Act, 2008

January 27, 2009
Limited Liability Partnership Bill has received the accent of Honourable President of India on 7-Jan-2009 and has now become a legislation and is to be called as ‘Limited Liability Partnership Act, 2008’ vide Notification in the Official Gazette on 9-Jan-2009.

Taxation of in-transit sales

January 27, 2009
In a recent decision in A&G Projects & Technologies Ltd Vs State of Karnataka [(2008) VIL 40 SC], the Supreme Court has laid down certain important principles governing the taxation of inter-State sales of goods under the Central Sales Tax Act 1956 (The Act). The three key Sections 3, 6

Failure to remit tax will invite prosecution: IT dept

January 27, 2009
Noticing instances of non-remittance of Tax Deducted at Source (TDS), the Income Tax department on Thursday said that any failure to remit the tax would attract serious consequences including prosecution. The stipulated dates in respect of tax deducted to be remitted to central government were – "if deduction is by

1,550 PF trusts may lose I-T benefits

January 27, 2009
Over 1,550 private provident fund trusts run by Indian companies could lose their income tax benefits in less than three months time. These private trusts enjoy tax benefits on the basis of their affiliation to the Employees Provident Fund Organisation (EPFO) through temporary relaxations granted by it. The deadline for

Time to revisit dividend taxation

January 27, 2009
Taxation of dividends has given rise to an age-old controversy. The classical system taxes dividends in the hands of shareholders. It was thought that this was unfair. Profits distributed by companies have already been taxed. Why tax it again in the hands of shareholders? The argument appealed to the Government.

RBI liberalises NPA norms

January 27, 2009
Further liberalising the prudential norms for the treatment of non-performing assets in the context of ongoing slowdown in the Indian economy, the Reserve Bank of India on Friday said all accounts which were standard accounts on September 1, 2008 would be treated as standard accounts on restructuring provided the restructuring

MNC liaison offices may get tax breather

January 27, 2009
A ruling that the liaison office of home furnishing multinational Ikea is not liable to pay income tax in India could set an important precedent and benefit for foreign retailers, which have set up similar operations to oversee sourcing of goods from India. In a recent decision, the Authority for

Creative accounting helps cos cover up forex losses

January 27, 2009
Companies are getting creative in using the Company Act and Accounting Standards to avoid the impact of foreign currency loan on their profit & loss statement owing to currency fluctuations. Companies with foreign currency borrowings have now adopted various accounting tactics to ensure that their quarterly performance remains intact in