⚫India’s equity market is on the cusp of overtaking that of the UK in value to join the world’s top five club.The likely feat comes as record low interest rates and a retail-investing boom propel stocks to record highs.
⚫Airlines will be able to operate at 100% capacity from October 18, with the civil aviation ministry lifting all restrictions on domestic flight movements.
⚫The RBI issued a small finance bank licence to the Centrum Group BharatPe consortium. Incorporated as Unity SFB, the lender will start operations in some weeks with a Rs 1,500-crore loan book.
⚫The Govt has received financial bids for strategic divestment of Central Electronics Ltd, taking the privatisation process of the PSU to the concluding stage.
⚫Apple Inc is likely to cut down production of its iPhone 13 by as many as 10 million units due to the global chip shortage.
⚫In a boost to its electric vehicle push, Tata Motors closed a deal to raise Rs 7,500 crore from TPG Rise Climate and Abu Dhabi’s ADQ. This is the first major fundraising by an Indian carmaker to push clean mobility.
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⚫The RBI kept its policy rates and stance unchanged, but decisively moved to withdraw excess liquidity from the system through its least disruptive liquidity management tool.
⚫Tata Sons wins bid: Air India may see turnaround as debt eases by 75%. Air India reported an operating profit of Rs 1,787 crore in FY20 on a consolidated basis but reported a net loss of Rs 7427 crore due to interest and depreciation costs.
⚫Ministry of Power issued guidelines for operationalising optimum utilisation of generating stations as per the requirement in the electricity grid. It has been brought to the notice of the Govt that some power plants are not generating to their full capacity at any given time and the unutilised capacity remains idle as they are tied up under power purchase agreements.
⚫Tesla car to be affordable in India, will cost Rs 35 lakh.
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👉Notification for Online Assessment Test (AT) for Certificate Course on Financial Market and Securities Laws on 23rd & 24th Oct 2021 at 10:00 AM -12:00 Noon IST. - (08-10-2021)
https://resource.cdn.icai.org/66911ccmip53932b.pdf
👉Notification for Online Assessment Test (AT) for Certificate Course on Fundamental Analysis and Technical Analysis with Equity Research on 30th & 31st Oct 2021 at 10:00 AM -12:00 Noon IST. - (08-10-2021)
https://resource.cdn.icai.org/66910ccmip53932a.pdf
👉Exchange rates Notification No.80/2021-Cus (NT) dated 07.10.2021
https://www.cbic.gov.in/resources//htdocs-cbec/customs/cs-act/notifications/notfns-2021/cs-nt2021/csnt80-2021.pdf
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⚫PM Modi and denmark PM held "fruitful" talks with a focus on expanding cooperation in a range of key areas such as health, agriculture, water management, climate change and renewable energy.The two sides also inked four agreements that will provide for deepening of cooperation in areas of science and technology, climate change and skill development.
⚫Air India employee unions pledge support to Tata Sons, Mood upbeat among AI employees over disinvestment but concerns persist over arrears, salary cuts, medical benefits.
⚫The country's exports are growing at a healthy rate and now exporters can aim for USD 450-500 billion of outbound shipments during the next fiscal year.
⚫The I-tax Dept detected "unaccounted" income of Rs 550 crore and seized over Rs 142 crore cash after it recently raided Hyderabad based Hetero pharmaceutical group.
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⚫Aggressive marketing of products, timely implementation of FTA's that are under negotiations and affordable credit to MSME players would help in taking the country's merchandise exports to USD 500 billion in the next FY.
⚫With several states and power discoms pressing the panic button on coal supply and shortfall in electricity, the Ministry of Coal and Power has rushed in to scotch any rumours of a blackout or power cuts.
⚫Credit growth turned positive YTD at 0.1% in September for the first time in FY22, reflecting gradual pick-up in demand. RBI data shows that bank lending rose Rs 7,283 crore till Sept 24.
⚫Tata group may need to invest $1 billion to upgrade Air India fleet. The Govt is expected to issue a LOI to Tata Sons next week, following which the share purchase agreement will be formalised.
⚫The ICAI has defended its stance, saying it is not for exempting MSME firms from mandatory statutory audit and that the NFRA has no jurisdiction over MSME's.
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✅ Due Date For GST -
For Taxpayer who is opting for QRMP Scheme having Turnover up to 5 crores
GSTR 1 for SEP-2021 - 13-OCT-21
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🔮 Ethics of the Day🕵🏻
🏵️ FAQ :Whether there is any ceiling on the number of Company audit (Statutory Audit) ass ignments that can be taken up by a member in practice or a Firm of Chartered Accountants?
👉 Ans : Yes,in view of the Chapter VIII of Council General Guidelines, 2008 member in practice or a proprietary firm of Chartered Accountant can accept 30 audit assignments whether in respect of private Companies or other Companies, with the exception of one person Companies and dormant companies.
🏵️ FAQ: Whether “indebtednesss” for the purposes of Chapter X of Council General Guidelines, 2008 include loan taken by the m ember against a Fixed Deposit?
👉 Ans : Yes, indebtednesss for the purposes of Chapter X of Council General Guidelines, 2008 includes loan taken by a member against Fixed Deposit. Accordingly, it is not permissible for him to accept audit assignment of a bank in case he has taken loan against a Fixed Deposit held by him in that bank.
🏵️ FAQ:Whether there is any minimum audit fee to be charged by the members of the Institute?
👉 Ans :No, there is no mandatory minimum audit fee required to be charged by the members of the Institute.
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Validity of Partnership remuneration disallowed under Section 40A(2)(a)*
👉Problem based on provisions of Sections 40(b)(v) & 40A(2)(a) of the Income Tax Act, 1961.
👉PROBLEM :- M/s. XYZ & Co., a partnership firm consisting of three partners enhanced working partners salary from Rs. 25,000/- to Rs. 50,000/- per month for each partner. The increase was in accordance with terms and conditions of Partnership Deed /authorised by Partnership Deed.
👉The Assessing Officer during course of assessment contended that the remuneration paid to working partners @Rs 50,000/- per partner per month is excessive and applied Section 40A(2)(a) though the payment was within statutory limit as specified in Section 40(b)(v). Whether action of AO is right ?
👉LETS’’ CONSIDER PROVISIONS OF APPLICABLE SECTIONS
👉SECTION 40(b)(v) provides that : Remuneration to Partners exceeding the limit prescribed u/s 40(b) to be disallowed;
👉As per section 40(b)(v) any payment of remuneration to any partner who is a working partner, which is authorised by, and is in accordance with, the terms of the partnership deed and relates to any period falling after the date of such partnership deed in so far as the amount of such payment to all the partners during the previous year exceeds the aggregate amount computed as hereunder will be disallowed:
👉(a) on the first Rs.3,00,000 of the book-profit or in case of a loss Rs.1,50,000 or at the rate of 90 per cent. of the book-profit, whichever is more;
👉(b) on the balance of the book-profit at the rate of 60 per cent.
👉Explanation 3 to section 40(b) defines “book-profit” as to mean the net profit, as shown in the profit and loss account for the relevant previous year, computed in the manner laid down in Chapter IV-D as increased by the aggregate amount of the remuneration paid or payable to all the partners of the firm if such amount has been deducted while computing the net profit.
👉SECTION 40A(2)(a) deals with powers of disallowance of expenditure on related party by Assessing Officer;
👉Where the assessee incurs any expenditure in respect of which payment has been or is to be made to any person referred to in clause (b) of this sub- section, and the Assessing Officer is of opinion that such expenditure is excessive or unreasonable having regard to the fair market value of the goods, services or facilities for which the payment is made or the legitimate needs of the business or profession of the assessee or the benefit derived by or accruing to him therefrom, so much of the expenditure as is so considered by him to be excessive or unreasonable shall not be allowed as a deduction:
ANSWER TO ABOVE QUERIES:
👉The facts of the case are similar to the facts in CIT Vs. Great City Manufacturing Co.(2013) 351 ITR156, wherein the High Court observed that Section 40(b)(v) prescribed the limit of remuneration to working partners , and deduction is allowable up to such limit while computing the business income. *If remuneration paid is within the ceiling limit provided under Section 40(b)(v) , then recourse to provisions of Section 40A(2)(a) cannot be taken.*
👉The Assessing Officer is only required to ensure that the remuneration is paid to the working partners mentioned in Partnership Deed, the terms and conditions of the Deed provided the payment of such remuneration to the working partners and the remuneration is within the limits prescribed under Section 40(b)(v) of the Act, 1961. If these conditions are complied with ,then the AO cannot disallowed any part of remuneration on the ground that it is in excess or it is excessive.
👉In view of the above judgement , the increased remuneration ,which is authorised by the Partnership Deed and is within limits specified under Section 40(b)(v) and paid to working partners , cannot be disallowed by invoking provisions of Section 40A(2)(a) of the Income Tax Act, 1961.
👉The action of Assessing Officer in above mentioned case was not appropriate.
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⚫Commerce and Industry Minister held bilateral meetings with his counterparts from South Korea, Australia, South Africa, the US, Brazil, China, and the European Union, among others, at the G20 ministerial meeting in Sorrento, Italy, to give more impetus to trade ties with these nations.
⚫The Union Cabinet is expected to approve the national master plan for multimodal connectivity or PM Gati Shakti. Gati Shakti will be a digital platform that will bring 16 ministries, including rail, road, and shipping, to provide real-time access to information and data on various infrastructure projects and help in better coordination among ministries.
⚫Govt may consider higher GST, fewer rates to simplify structure.
⚫Divestment push may boost PSU m-cap on bourses from all-time low currently. Nifty PSE index closes at highest level since January 2018.
⚫Diesel price on Monday breached the Rs 100-a-litre mark in Kerala and Karnataka as fuel prices were hiked yet again to align domestic rates with firming international oil prices.
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🔮 Ethics of the Day🕵🏻
🏵️ FAQ :Is there any recommended scale of fees chargeable for the work done by the members of the Institute?
👉 Ans : The Institute has issued revised Minimum scale of Fees for the professional assignments of the members of ICAI. The recommended scale of Fees is to be charged as per the work performed for various professional assignments. The Fees has been recommended separately for Class-A, B and C cities. The members may refer the same at https://cmpbenefits.icai.org/wp-content/uploads/2020/02/Details-download.pdf
🏵️ FAQ: Whether a member of the Institute in practice is liable for professional misconduct, if he does not follow the direction given,by the Council or an appropriate Committee or on behalf of any of them, to the incoming auditors not to accept the appointment as auditors, in the case of unjustified removal of the earlier auditors?
👉 Ans :Yes,in exercise of the powers conferred by Clause (1) of Part II of the Second Schedule to the Act, the Council of the Institute issued Council General Guidelines, 2008, chapter XI of which specifies that a member of the Institute in practice shall be deemed to be guilty of professional misconduct, if he does not follow the direction given, by the Council or an appropriate Committee or on behalf of any of them, to the incoming auditors not to accept the appointment as auditors, in the case of unjustified removal of the earlier auditors.
🏵️ FAQ:What is the status of a Chartered Accountant who is a salaried employee of a Chartered Accountant in practice or a firm of such Chartered Accountants?
👉 Ans :An associate or a fellow of the Institute who is a salaried employee of a Chartered Accountant in practice or a firm of such Chartered Accountants shall, notwithstanding such employment, be deemed to be in practice for the limited purpose of the trainin of articled assistants. He may hold Certificate of Practice but he is not entitled to do attest functions w.e.f. 1.4.2005.
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