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Bangalore Branch of SIRC of the Institute of Chartered Accountants of India

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Bangalore Branch of SIRC of the Institute of Chartered Accountants of India

CALENDAR OF EVENTS - May & June2011 Date/Day

Topic /Speaker

Venue/Time

CPE Credit

04.05.11 Wednesday

Enterprise Risk Management CA. R Raghuraman

Branch Premises 06.00pm to 08.00pm

07.05.11 Saturday

Workshop on “FDI Investments in India - Latest Amendments” CA. R Sharath Rao & CA. Gautham Lokande Delegate Fee: ` 250/-

Branch Premises 10.00am to 01.00pm

09.05.11 Monday

Discussion on the Public Trusts Bill 2011 Shri. K G Raghavan, CA. Dr. N Suresh & CA. N Nityananda Details at page no: 13

Branch Premises 05.00pm to 08.00pm

11.05.11 Wednesday

Capacity Building through Information and Knowledge Management for CAs CA. B C Chechani

Branch Premises 06.00pm to 08.00pm

2 hrs

12.05.11 Thursday

Appeals and Revisions under Income Tax Act 1961 Mr.H Naginchand Khincha Delegate Fee: ` 250/-

Sri Bhagawan Mahaveer Jain College Auditorium, Next to Bangalore Stock Exchange 05.00pm to 08.00pm

3 hrs

14.05.11 Saturday

Seminar on Investment Banking Opportunity CA. Raghunath A & CA. Srinivas MRS ` 500/Delegate Fee :` Details at page no: 15

Branch Premises 09.45am to 05.00pm

6 hrs

18.05.11 Wednesday

Indian Constitution : Public Accountability, Distribution of Tax to State & Centre Shri. T Sethumadhavan, IA & AS (Retd)

Branch Premises 06.00pm to 08.00pm

2 hrs

2 hrs 3 hrs 3 hrs

23.05.11, Workshop on “Accounting Standards” Monday to CA. K. Gururaj Acharya, 27.05.11 Workshop Co-ordinator Friday (except ` 1000/25.05.11 Delegate Fee:` Details at page no: 14 Wednessday)

Branch Premises 04.00pm to 08.00pm

25.05.11 Wednesday

LLP & Multi Disciplinary Partnerships CA. D S Vivek

Branch Premises 06.00pm to 08.00pm

2 hrs

27.05.11 Friday

Delegate Fee: ` 1750/-

National Seminar on XBRL

Lalit Ashok, Kumara Krupa, High Grounds,Bangalore - 560 001 10.00am to 05.30pm

6 hrs

Details at page no: 17

16 hrs

01.06.11 Wednesday

Discussion on Finance Act 2011 CA. K K Chythanya & CA. H Padamchand Khincha

Branch Premises 06.00pm to 08.00pm

2 hrs

08.06.11 Wednesday

Service Tax-Recent Budget Amendments CA. A Saiprasad

Branch Premises 06.00pm to 08.00pm

2 hrs

18.06.11 Saturday & 19.06.11 Sunday

“Golden Jubilee State Level Conference” SAMVIT - POTENCY OF KNOWLEDGE Details at page : Inside back cover

Jnana Jyothi Convention Centre, Central College Campus, Palace Road,Bangalore-560 001 09.00am to 06.00pm

12 hrs

Note : High Tea at 5.30 pm for programmes at 6.00 pm at Branch Premises. Advertisement Tariff for the Branch Newsletter Colour full page Outside back ` 30,000/Inside back ` 24,000/-

Inside Black & White Full page ` 15,000/Half page ` 8,000/Quarter page ` 4,000/Advt. material should reach us before 22nd of previous month.

Editor

: CA. Venkatesh Babu T.R.

Sub Editor : CA. Ravindranath S.N.

DISCLAIMER : The Bangalore Branch of ICAI is not in anyway responsible for the result of any action taken on the basis of the advertisement published in the newsletter. The members, however, bear in mind the provision of the code of ethics while responding to the advertisements. The views and opinions expressed or implied in the Branch Newsletter are those of the authors and do not necessarily reflect that of Bangalore Branch of ICAI.

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TAX UPDATES MARCH 2011 CA. Chythanya K.K., B.com, FCA, LL.B., Advocate VAT, CST, ENTRY TAX, PROFESSIONAL TAX PARTS DIGESTED: a) 2010-11(15) KCTJ Part 11 & 12 b) 38 VST – Part 3 to 5 c) 39 VST – Part 1 Reference/Description [2011] 38 VST 488 (Ker) HC: Cheerans Auto Agencies v. State of Kerala In the instant case an exchange mela was conducted by a dealer engaged in the sale of two wheelers. Old vehicles of customers were purchased at a price fixed by broker who was arranged by the dealer. The price of the old vehicle was reduced from the price of the new vehicle purchased by the customer. There was no privity of contract between the customer and the broker. The Kerala High Court noted that the transaction as between the broker and dealer was not relevant. The Court held that the dealer was liable to declare and pay tax on the purchase and sale of old vehicles. The Court noted that failure to do so would amount to evasion of tax.It is an important case for dealers who would promote exchange sales and such dealers would do well to remember that such exchange would mean purchase by them of goods from URDs. Such purchase may be exigible to purchase tax. [2011] 38 VST 501 (Guj) HC: Gopal Rayon Industries Pvt. Ltd. v. State of Gujarat and Others In the instant case the Petitioner had made payment of Entry Tax under the Form meant for payment of Value

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Added Tax, however the fact of the same was clearly stated therein that the amount paid was towards Entry Tax and the counterfoils of the same were deposited regularly with department. In such a case the Gujarat High Court held that the department was not entitled to treat the entire tax as not paid and the dealer as in default. The Court set aside the assessment Order and held that the demand for the entire tax with interest and penalty, attachment of bank account and refusal to grant input tax credit by the Department was unwarranted. The Court further while directing the Department to refund of the sums paid under the wrong Form and also directed the dealer to pay the tax with the correct Form.This ubiquitous high-handedness of the Department sometimes leads to farcical/ludicrous actions on their part – blinded by the self-clothed cloak of power, their thought process is mired. The direction of the Hon. High Court to mollify the Department’s pedantic approach with the instruction to rectify the defect with the usage of the correct Forms seems to be the olive branch for the belligerent Department! [2011] 39 VST 44 (All) HC: A.C.P.L. Jewels Private Ltd. v. Union of India and others In the instant case the Allahabad High Court dealing with the matter of stock transfer/goods returned and the nonavailability of Form F, while relying on the judgement of the Apex Court in Ambica Steels [2009] 24 VST 356, held that where the State (s) is/are, issuing Form F, the assessee would be

provided Form F for making assessment; where however Form F was not being issued by the State(s), it would be open for the assessing officer to complete the reassessment proceedings on its own merits after examining the transaction between the parties, keeping in mind the circumstance that the assessee was not in a position to obtain the Form F, for no fault of his.Procedural lapses/ adherence should/could never establish a factual aspect of a case. The acts have intents and purposes which cannot be gauged by the absence/presence of certain procedural document. A document by no means can be the sole criteria to establish the intents and purposes of an act.

INCOME TAX PARTS DIGESTED: a) 331 ITR – Part 4 & 5 b) 332 ITR – Part 1 & 2 c) 197 Taxman – Part 2, 4 to 6 d) 8 ITR(Trib) – Part 1 to 3 e) 129 ITD – Part 1 to 4 f) 136 TTJ – Part 4 to 6 g) 42-B BCAJ – Part 6 h) 4 International Taxation – Part 3 Reference/Description [2011] 331 ITR 449 (P&H) [FB] HC: CIT v. Varindera Construction Co. In the instant case the High Court decided on the extent of applicability of Circular F.No. 279/Misc. 56/07/ITJ dt. June 5, 2007, with regard to the monetary limits applicable for appeals filed by the Department. The Court held that the Circulars which stipulate the said monetary limits would only control or rather need to be satisfied at the time of filing of the appeals and not at the time of hearing.


Bangalore Branch of SIRC of the Institute of Chartered Accountants of India

In other words, it was clarified that the limits prevailing at the time of filing are be considered and not the limits prevailing at the time of hearing on the question of law. [2011] 332 ITR 1 (Delhi) HC: CWT v. Motor and General Finance Ltd. In the instant case the Delhi High Court was dealing with the aspect of best judgement assessment under the Wealth Tax Act. The Court dealt with the aspect of second proviso to Section 16(5), which dispensed with the requirement of issue of notice in a case where a notice was already issued pursuant to Section 16(4). The Court noted that the said proviso stated so without any qualification as to either clause (i) or (ii) of sub-section (4). The Court therefore held that the same meant that if a notice under clause (i) in the case where return was not filed or a notice under clause (ii) calling upon to file documents, etc., had been issued, that was enough to dispense with issue of another notice of hearing opportunity contemplated in the first proviso to sub-section (5).Applying the aforesaid ratio in the context of Income tax Act, it would mean that a prior issue of notice under sec 142(1) would permit the assessing officer to effect a best judgement assessment without issuing a show cause notice. This should put on alert those assessees who have received a notice under sec 142(1) on whatever count as in all such cases, the AO may surprise them by handing over best judgment assessment without notice. [2011] 332 ITR 58 (SC) Electronics Corporation of India Ltd. v. Union of India and OthersIn the instant case the Apex Court held that the Committee on Disputes which

had been suggested by the Apex Court itself, for the purpose of deciding disputes between entities of State has outlived its utility and in view of the changed scenario the earlier orders of the Apex Court in certain cases had to be recalled. The idea behind the setting up of that Committee was to ensure that the resources of the State are not frittered away in inter se litigation between entities of the State which was best resolved by an empowered Committee. However, despite the best efforts of the Committee the mechanism did not achieve the results for which it was constituted while on the contrary it had in fact delayed litigation. [2011] 332 ITR 63 (Bom) HC: CIT v. Parle Plastics Ltd. and another The Bombay High Court in the instant case dealing with the deduction allowable under Section 80-IA held that while computing the deduction under the said Section for the purpose of determination of business income, depreciation as per the provisions of Section 32 had to be necessarily allowed even in a case where the same was not claimed by assessee.With due respect, this decision is not in line with the provisions of section 80B and section 80AB. The overruling of nature of section 80AB over all other sections was re-emphasized in IPCA Lab [266 ITR 521] by the Apex Court. [2011] 332 ITR 122 (Karn) HC H. Ebrahim and others v. Dy.CIT and anotherIn the instant case the Karnataka High Court was dealing with the liability of directors of private company in liquidation as provided under Section 179. The Court held that ‘tax’ as contemplated by the said Section did not include

penalty and interest.Further the Court noted that as per the said Section in order to not penalise the Directors it must be proved that there was absence of gross neglect or misfeasance or breach of duty on their part. In the instant case where the Company had failed to the file returns for more than a decade and amounts were due to Commercial Tax Department and banks, it was held that the Directors were liable.With due respect, the Hon. High Court may have missed the then prevailing section 139(1) which did not mandate a company to file a return unless it had total income chargeable to tax. The facts reveal that the returns were not filed as there were losses. In such cases, non executive directors cannot be fastened with the liability. [2011] 332 ITR (St.) 1: C B D T Instructions – Instruction No. 3 of 2011, dated 9th February, 2011 The CDBT vide the aforesaid instruction has raised the monetary limit for filing of appeals by the Department before the ITAT, HC and SC. The aforesaid Instruction is in supersession of Instruction No. 5 of 2008, dated May 15, 2008. The limits are as follows:Appeal before ITAT – Rs.3,00,000Appeal before HC – Rs.10,00,000Appeal before SC – Rs.25,00,000The Department therefore would not be able to file the appeal unless the tax effect is above the said limit at the various stages. The same is effective as from appeals to be filed on or after 9th February 2011. [2011] 332 ITR 222 (Delhi) HC : CIT v. Dynamic Vertical Software India P. Ltd. In the instant case the assessee had purchased/imported software from ‘M’ and sold in the Indian market. The

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AO had treated the payment made by the assessee to ‘M’ as royalty and had disallowed the expense under Section 40(a)(i) for want of deduction of tax under Section 195. The Delhi High Court held that the assessee having purchased the software from ‘M’ and selling the same in the Indian was acting as a dealer of ‘M’ and the same could not be termed as ‘royalty’ and therefore Section 40(a)(i) could not be invoked in his case.The aforesaid decision is a big relief and will overrule the earlier decision of Delhi ITAT in Gracemac (Microsoft) case. An adverse decision has been dictated in the open court by the Karnataka High Court in the case of Synopsis Ltd., although the said decision is yet to be released. [2011] 332 ITR 224 (Delhi) HC: Kim Royal Dutch Airlines and another v. Dy. DIT In the instant case the Delhi High Court while setting aside the Order refusing stay without considering existence of prima facie case held that such an Order must be a composite one and that is should specifically deal with the existence of a prima facie case. [2011] 332 ITR 253 (Bom) HC: CIT v. Qatar Airways In the instant case agents of airline companies were permitted to sell air tickets at any rate between the fixed minimum commercial price and the published price. In the matter of deciding the liability to deduct tax, the Bombay High Court held that the difference between the commercial price and the published price did not amount to commission or brokerage and therefore the provisions of Section 194H was not attracted. The Court while holding so observed that it would be impracticable and unreasonable to expect the assessee to get a feed back from its numerous

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agents in respect of each ticket sold. The permission granted to the agents to sell the tickets at a lower price could neither amount to commission nor brokerage in the hands of the agent. [2011] 332 ITR 255 (Ker) HC : Vodafone Essar Cellular Ltd. v. Assist. CIT (TDS) In the instant case the Kerala High Court held that in a case of sale of SIM cards and recharge coupons the same was not in the nature of sale of goods. The commission or brokerage paid for the said mobile telephone service in the nature of discount given to distributors was liable to TDS under Section 194H. [2011] 197 Taxman 249[2010] 6 taxmann.com 120 (Mum.) : Bhatia Nagar Premises Co-operative Society Ltd. v. Union of India The Bombay High Court in the instant case held that Section 50C, dealing with the special provisions for full value of consideration (stamp value etc.) in certain cases of sale of land or building etc., was within the legislative competence and was not violative of Article 14 of the Constitution. [2011] 10 taxmann.com 4 (Ker.)[2011] 197 Taxman [BN - LI] [Issue-5] : CIT v. O. Abdul Razak In the instant case it was held that an assessee setting up own business abroad satisfies the condition of going abroad for purpose of employment as is covered by Explanation (a) to Section 6(1)(c). It was noted that for the purpose of the said Explanation, employment includes self-employment like business or profession taken up by the assessee abroad. [2011] 10 taxmann.com 87 (Mum – ITAT) [2011] 197 Taxman [BN – LXV] [Issue – 6] : Tata Sons Limited v. Dy. CIT

In the instant case it was held that an assessee is entitled to benefit of Section 91, that is entitled to tax credits, even though he was covered by scope of India-US & India–Canada DTAA. It was observed that the fact that a taxpayer is entitled to make a particular claim, in accordance with a tax treaty provision, does not disentitle him to make the claim in accordance with the provisions of the Act. It was noted that the provisions of Section 91 are to be treated as general in application and the said provision would yield to the treaty provisions only to the extent the provisions of the treaty were beneficial to the assessee. [2011] 10 taxmann.com 78 (Ahd. – ITAT) [2011] 197 Taxman [BN – LXVI] [Issue – 6] : Navine Fluorine International Ltd v. ACIT In the instant case it was held that items of scrap which are not generated out of assessee’s manufacturing activities would not form part of the definition of the scrap as was provided in Explanation (b) to Section 206C. Therefore, it was held that the assessee could not be held to be in default for not collecting tax at source under Section 206C(6) on sale of such scrap. [2011] 8 ITR (Trib) 187 (Delhi) : Amadeus India Pvt. Ltd. v. Assist. CIT In the instant case the Delhi Tribunal held that the power of the TPO under Section 92CA was limited to making adjustments in respect of transactions as was referred to him. It was held that he had no power to take up any other transaction suo motu.This decision has been effectively nullified by amending the provisions of section 92CA by the Finance Act, 2011.


Bangalore Branch of SIRC of the Institute of Chartered Accountants of India

RECENT JUDICIAL PRONOUNCEMENTS IN INDIRECT TAXES N.R.Badrinath, Grad C.W.A., F.C.A., Madhur Harlalka, B. Com., F.C.A SERVICE TAX  The appellants were engaged in

providing taxable service under the category of clearing and forward agents. A show-cause notice proposing to confirm service tax for the period April 2001 to March 2003 on the said activities was issued which was dropped by the Additional Commissioner vide his order. The said order had attained finality as the same was not appealed against. Another show-cause notice for the period July 2003 to March 2005 was issued invoking the longer period of limitation on the finding that the activities of promoting the business on commission basis amounted to business auxiliary services (‘BAS’). However, it was held that the Revenue was fully aware of the activities and hence if the Revenue was of the opinion that the appellants activity fell under BAS, it should have either advise them to pay service tax or should have proceeded to take action within the normal period of limitation. As the income from BAS was reflected in the ledger account and balance sheet, there was no wilful suppression or mis-statement with an intention to evade payment tax as contended by the Revenue. Hence, the show-cause notice issued invoking extended period cannot be sustained and the pre-deposit of tax was waived and the stay petition was allowed.

[Rama Paper Mills vs. Commissioner of Central Excise, Meerut. 2011 (22) S.T.R 19 (Tri - Delhi)]  The appellant was providing the service of mandap keeper and during the course of investigation it was found that the appellant was also engaged in renting of party plot to various customers for which, consideration was received partly in cash. Accordingly, it was found that the appellant had short paid service tax and after adjudication, service tax demand was confirmed with interest and penalties under sections 76 and 78 of the Finance Act, 1994. The appellant contended that penalty under section 78 may be reduced to 25% which they had already paid by them and the penalty under section 76 may be set aside since penalty cannot be imposed under both sections. However, it was held that the penalty under section 78 was paid beyond 30 days from the date of the order in original. The reason given by the appellant that the party plot is not used on a regular basis and hence the order was received by them late cannot be accepted. Based on the decision of the Hon’ble High Court of Kerala in the case of Krishna Poduval [2006(1) STR 185 (Ker)], it was held that imposition of penalty are distinct and separate even if offences are committed in the course of same transaction. Hence the appeal was

dismissed. [Dhaval Corporation vs. Commissioner of Service Tax, Ahmedabad. 2011 (22) S.T.R 26 (Tri – Ahmd.)]  The applicants had filed application for the waiver of pre-deposit of duty and penalty. The Commissioner (Appeals) directed the applicants to deposit an amount of Rs. 10 lakh for hearing which, was deposited by the applicants by way of reversing the credit. The Commissioner (Appeals) did not accept such reversal on the opinion that the pre-deposit should be made in cash or through PLA and dismissed the appeal. The applicants relied on the decision of the Hon’ble Allahabad High Court in the case of India Casting Co. vs. CEGAT, New Delhi [1998 (104) ELT 17 (All.)],wherein it was held that the assessee is entitled to make predeposit by way of reversal from Cenvat account. It was held that the applicant is entitled to make predeposit by reversal of credit based on the above cited decision. Therefore, the pre-deposit of the remaining amounts of duty and penalty was waived and the stay application was allowed. [Ballarpur Industries Limited vs. Commissioner of Central Excise, Customs and Service Tax, BBSR-I. 2011 (22) S.T.R. 125 (Tri – Kolkata)]  The petitioner, a Government contractor entered into contracts for construction of residential complex wherein nothing was mentioned whether the service tax would be paid either by the petitioner or by the respondent. After the execution of the contract, the respondent issued notices to the petitioner to deposit service tax. The petitioner, relying on

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the resolution No. 12 taken up by the Board of Directors of the respondent contended that the when there was no condition for payment of service tax and the contract was already executed, the service tax would be paid by the respondent, but in all cases for future the service tax would be paid by the contractor. The petitioner relied on the decision of the Apex Court in the case of ABL International Limited vs. Export Credit Guarantee Corporation in India Limited (2004) 3 SCC 553 where it was held that, the State being a party to the contract has an obligation to act fairly, justly and reasonably as per Article 14 of the Constitution of India. Accordingly, it was contended that the respondent is liable to pay tax under the contract. However, it was held that the liability to pay tax is on the service provider. It cannot be said that the petitioner is not liable to pay tax as a service provider. Having decided that the liability would be of the petitioner, whether the petitioner is entitled to be reimbursed under the contract has to be decided by a Court of competent jurisdiction. The petitioner would be free to make an application before the competent authority which shall decide the same and accordingly the petition was dismissed. [Ravishankar Jaiswal vs. Jabalpur Development Authority. 2011 (22) S.T.R 5 (MP)] VALUE ADDED TAX  The petitioner filed petition against

the denial of deduction on the discounts by the respondent on the ground that the discounts had been granted through credit notes raised subsequent to the tax invoices which resulted in reduction of the turnover and thereby the tax liability. The

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petitioner contended that the decision of the respondent is arbitrary, illegal and ultra vires as per sections 2(36), 4 and 30 of the Karnataka Value Added Tax Act, 2003 read with Rule 31 of the Karnataka Value Added Tax Rules, 2005. In the decision in the case of Deputy Commissioner of Sales Tax (Law), Board of Revenue (Taxes), Ernakulam vs. Advani Oerlikon Private Limited [(1950-2004) 7 SCST 7115 : AIR 1980 SC 609 : (1980) 45 STC 32 (SC) : (1980) 1 SCC 360, the Apex Court, with reference to the taxable turnover, while defining what is ‘sale price’ and ‘trade discount’, has held that the discount extended is not includable in taxable turnover. Hence the impugned order passed the Assessing Officer was quashed. However, it is for the Assessing Officer to restrict calculation of the taxable turnover based on the discounts and to calculate the actual tax to be paid. Accordingly, the writ petitions were allowed. [TV Sundaram Iyengar and Sons Limited, Bangalore vs. State of Karnataka and Another. 2011 (70) Kar. L. J 372 (HC)]  The appellant is a registered dealer engaged in manufacture and sale of granite monuments. The AA held that the consumable machine tools used in sawing and polishing the granite are parts of machinery and levied the entry tax. The appellant contended that the machine tools concerned are consumables and in the First Schedule to the Karnataka Tax on Entry of Goods Act, 1979, there is no entry specified for such consumables. However, it was held that the State can levy entry tax on goods specified under Schedule I only by issuance of

a notification. There is no such notification under section 3(1) to levy tax on consumables. The goods involved in the present case are of consumables since they are used for the purpose of drilling or to bore holes in the wall or any hard substance by loosening their sharpness though not completely exhausted. Tools like drill bits, cutters are consumables for the reason of being exhausted fastly and are not accessories. Hence, the impugned orders passed by the AA and FAA holding that the goods concerned as machinery parts and accessories are against the law. Accordingly, the appeal was allowed and the impugned orders of AA levying entry tax on machine tools as accessories as confirmed by FAA were set aside. [V Ramanna Naidu vs. State of Karnataka. 2011 (70) Kar. L.J 155 (Tri.) (DB)]  The appellant is engaged in the design, manufacture, supply and installation of UPVC doors and windows and had claimed deduction of 25% of the contract value towards labour charge. The PA had disallowed the labour deductions claimed on the ground that the manufacturing activities are completed at the factory level itself and the excise duty is collected at the applicable rates on the assessable value and hence the activity carried on by the appellant is a sale of UPVC doors and windows and not a works contract. Reassessment order was passed excluding excise duty and cess from the contract value in arriving at the deduction for labour charges. However, it was held that the value of contract is aggregate amount for which the goods are sold. It cannot


Bangalore Branch of SIRC of the Institute of Chartered Accountants of India

be said that the excise duty and cess refers only to the value of the goods and is not part of the contract value. The appellant had charged the customers excise duty and as result, the contract value has increased. Hence, 25% of the value of the contract which includes excise duty and cess is to be considered for arriving at the labour charges for deduction. Accordingly, the order passed by FAA holding that the excise duty does not form part of the contract value to calculate labour charges for the purpose of claiming deduction was set aside. [Fenesta Building Systems, Bangalore vs. State of Karnataka. 2011 (70) Kar. L.J 216 (Tri) (DB)]  The petitioner challenged the

reassessment order passed by the respondent and the consequential demand on the ground that the petitioner was not granted an opportunity to of personal hearing. The petitioner contended that the respondent had not followed principles of natural justice by not

granting an opportunity for personal hearing despite specific request. However, it was held that the Statute does not provide for the giving of opportunity of hearing. Condition precedent for passing an order is the issuance of show-cause notice. No ratio is laid down to the effect that the reassessment order has to be quashed if the personal hearing is not afforded. Provisions of Act or Rules framed thereunder do not provide for personal hearing. Section 39(1)(b) of the Karnataka Value Added Tax Act, 2003 only speaks of the opportunity of showing cause against the proposed reassessment. When the statue provides only for giving of opportunity of showing cause, the opportunity of personal hearing cannot be imported into the statue. Hence, reassessment of tax and subsequent notice of demand cannot be said be vitiated fore not giving personal hearing. [Navayuga Engineering Company Limited, Bangalore vs. State of Karnataka and Another. 2011 (70) Kar. L.J 145 (HC)]

 The petitioner made certain purchases from M/s. Kaytee Switch Gear Limited (‘the Company’) and had paid input tax at 12.5%. The petitioner subsequently sold the goods at 4% and made a claim before the respondents for the refund of the excess input tax paid which, was paid by the respondent. However, the respondent refused to pay interest on the delayed refund. The Company had failed to remit the tax collected from the petitioner and the respondent initiated coercive steps and recovered the same with interest and penalty. It was held that the respondent is entitled to retain the input tax at 4% and consequent interest and penalty on delayed payment. The respondent is liable to refund the excess input tax together with interest as per section 50 of the Karnataka Value Added Tax Act, 2003 read with Rule 128 of the Karnataka Value Added Rules, 2005. [Kirloskar Electric Company Limited vs. The Assistant Commissioner of Commercial Taxes and Another. 2011 (70) Kar. L.J 305 (HC)]

AN APPEAL TO THE MEMBERS Sub: XV Batch of the Course on Finance for Non Finance Executives under the aegis of Management Development Programmes (MDP) Duration: June 2011 to October 2011 Timings: 03.00 pm to 06.30 pm (Only on Saturdays) Course Fee: Rs.12000/Course Contents:  Financial Accounts & Company Accounts  Direct Taxes  Financial Analysis  Project Reports  Indirect taxes  Corporate Finance  Cost Accounts

For Whom: The course is open to Non-Finance Executives such as Engineers, Architects, Doctors, Human Resource personnel, Department Heads, Administrators and other executives. The course does not call for any prior knowledge in Accountancy, Finance and Tax Laws. The course coverage will be basic in all subjects. We request you to pass on this information to your Clients to avail the benefits of this course. Contact Tel : 080 - 30563500 / 511 / 512 E-mail

: bangalore@icai.org / blrprogrammes@icai.org

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Campus Placement Programme For Newly Qualified Chartered Accountants Exclusively structured for Small & Medium sized Enterprises (SMEs) & the Small and Medium sized CA Firms CA .K. Raghu, Chairman, CMII of ICAI & Chief Coordinator – Placement Programme

The schedule for Campus Interview, May-2011 The CMII provides opportunity to the employers to interact with newly qualified Chartered Accountants and makes all arrangements at its centres, thereby providing a cost effective mode of recruiting newly qualified Chartered Accountants. The Institute of Chartered Accountants of India (ICAI) is pleased to welcome all Firms of Chartered Accountants (CAs) and leading companies to the forthcoming Exclusively Structured Campus Placement Programme for Small & Medium Sized Enterprises (SMEs) and the Small and Medium Sized CA Firms. In its endeavor to provide quality Accounting, Finance, Tax, Audit and Management Consultancy personnel to small and medium sized Industries and to provide a platform to the newly qualified Chartered Accountants, CMII would be conducting Campus Placement Programme as per below mentioned schedule. Campus Interview Dates Centres

Dates

Bangalore, Chennai, Kolkata, Mumbai and New Delhi

18th & 19th May, 2011

Ahmedabad, Indore, Kanpur, Ludhiana , Pune, Chandigarh, Coimbatore, Hyderabad , Jaipur & Nagpur.

19th May, 2011

Last date for Company Registration for all the centres

2nd May 2011 ( Upto 05:00 PM)

Last date for Shortlisting by Companies for all the centres

12th May 2011 (Upto 05:00 PM)

Consent sending by Candidates

15th May - 16th May 2011 Upto 11:00 AM (Morning)

ICAI CAMPUS INTERVIEW AT BANGALORE – A SNAPSHOT CA .K. Raghu, Chairman, CMII of ICAI & Chief Coordinator – Placement Programme The Committee for Members in Industry of the Institute conducted campus interviews at Hotel Bangalore International from 22nd to 25th March 2011. 21 Companies participated in the placement programme at Bangalore Centre. The organizations participating were as under – Banking Sector Public Sector Companies IT/ ITES Companies Other Companies CA Firms ● Coal India Limited ● Infosys Technologies ● ITC ● Canara Bank ● S.R Baliboi & ● BEL ● Wipro Ltd ● Robert Bosch ● Axis Bank Associates ● HSBC Technology & ● Reckitt Benckise ● Bank of Baroda ● PWC Services ● Sunrise Sports (India) Pvt. Ltd ● Deloitte Haskins ● TCS ● United Spirits Ltd & Sells ● Cognizant ● Puma Sports Pvt. Ltd ● Phillipose & Co ● Weir Minerals India Pvt. Ltd Highlights: 1. 226 Candidates attended the Campus Interviews and received 112 offers. 108 offers were accepted by the candidates. 2. The candidates were mostly from the States of Karnataka, Kerala, Tamilnadu, Andhra Pradesh, Maharashtra, West Bengal, Uttar Pradesh and Rajasthan. 3. The highest pay package offered was Rs 14 lacs by Reckitt Benckiser and average pay package offered was 6.0 lacs. I had the opportunity and occasion on 25th March 2011 to interact with the executives of the companies & the candidates. This initiative was supported by the Bangalore Branch under the Chairmanship of CA T RVenkatesh Babu. We would like to wish all the candidates a very bright career ahead.

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Bangalore Branch of SIRC of the Institute of Chartered Accountants of India

Details of Certificate Course on International Taxation We are pleased to announce that Second Batch at Bangalore Centre of Certificate Course on International Taxation is scheduled in the first week of June 2011 subject to the minimum registration of 50 candidates. The other details are mentioned below: A.

B.

General The Certificate Course on International Taxation shall comprise of a course of theoretical/ practical training and a certificate in the appropriate form shall be granted to those who qualify for the same, as hereinafter provided. Duration of the Course 200 hours consisting of Workshop (including case study) Self Study

C.

D.

E.

F.

100 hours 100 hours

Eligibility for Admission No candidate shall be admitted to the said course unless he is a member of the ICAI at the time of admission. Names of the cities where the course is to be conducted The above-mentioned Certificate Course being organized by the Committee on International Taxation of ICAI at various places across the country initially at Delhi, Mumbai, Hyderabad, Chennai, Bangalore, Kanpur, Kolkata and thereafter in other cities. Registration Registration will be on first come first serve basis. The registration form along with the requisite fee may be sent to the Nodal Officer at the mentioned address. Overall scheme The participants would be required to attend the workshop on Saturday and Sunday. They would also be

Course Coordinator for Bangalore Centre: CA. K. Raghu Central Council Member, ICAI Email: kraghu9999@gmail.com kraghu@kraghu.com

G.

H.

I.

J.

K.

L. M.

required to devote time for self study and case study given to them. Participants would be grouped for preparing case studies. The participants must complete the self study hours and case study for appearing in the Assessment test. Course fee Rs. 25000/- (Rupees Twenty five thousand only) inclusive of first assessment fee shall be payable at the time of Registration. Course fee once paid is nonrefundable under any circumstances. Evaluation Participants who successfully complete the workshop with at least 90% of attendance would be eligible to appear in the Assessment test. Periodicity of Examinations Assessment shall be conducted after the completion of workshop at such date and time as may be decided by the Committee. Eligibility to qualify A candidate has to secure 60% marks in aggregate in the Assessment test. Limit to the number of attempts for the Assessment test There will be no limit to the number of attempts for the assessment test. The participants can re-appear for the test and the re-appearance fee will be Rs. 1000/-. The participants will be allowed to re-appear for the test only after six months from the first attempt. No. of seats For every session -50 CPE Hours 100 CPE Hours will be provided to all the registered members as per the CPE guidelines.

For further details please contact Assistant Secretary ICAI, Bangalore dcobangalore@icai.org, 080 30563541 / 543

ANNOUNCEMENT Income tax jurisdiction in Bangalore City: Under e-filing scenario, quoting correct jurisdiction of income-tax assessing officer is assuming lot of importance. Therefore, an excel sheet facilitating easy finding of jurisdiction is being hosted in the website of Bangalore branch for the benefit of members. The excel sheet can be downloaded also. Please visit www.bangaloreicai.org

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May 2011


SRI BALAJI BOOKS Available at Rajajinagar on Rajkumar Road, on rent 200 Sq. Feet office with all infrastructure facilities like cabins, chairs, tables, partitions, storage etc, suitable for a Chartered Accountant Office.

MOBILE BOOK STORES BOOKS ON : INCOME TAX / SALES TAX / COMPANY LAWS / BANKING LAWS / INSURANCE LAWS/ CUSTOMS/CENTRAL EXCISE/ LABOUR LAWS / SERVICE LAWS / CIVIL LAWS / CRIMINAL LAWS /ALL TYPES OF STUDENT BOOKS OF C.A. ICWA/CS/LLB/LEATHER BINDING & PROFESSIONAL BOOKS ALSO. FREE DOOR DELIVERY WITH 15% DISCOUNT

Contact: 87622- 27491

CONTACT : C. MANI KUMAR,

May 2011

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Advt. Advt.

Advt.

Advt.

9880451046, 9663158287


Bangalore Branch of SIRC of the Institute of Chartered Accountants of India

Certificate Course on Valuation First Batch of Course on Valuation is proposed to commence from 2nd week of June 2011 at Bangalore Certificate course on valuation was launched in compliance of the decision of the Council of the Institute of the Chartered Accountants of India for its members and students of CA course who have qualified the final examinations. In the light of the emerging diversities & complexities in valuation jobs, the course has been designed to empower the members to be the leaders in the global service market. The objective of the Course is  To enable the members to gain acumen, expertise and indepth knowledge on various methods of valuation;  To empower the members with the technical skills as well as analytical and decision-making discretion in the valuation job;  To provide through knowledge of the global best practices as well as procedural and documentation aspects of the valuation job;  To provide expertise on the legal and regulatory framework of the valuation job in the cross-border transactions Apart from the comprehensive theoretical aspects, this course, first of its kind in India, will sharpen the expertise and excellence of our members through multiple case studies across the industry and service sector like pharmaceuticals, retail, manufacturing, banking, insurance, valuation, mining, infrastructure, private equity valuation, and cross-border transactions. The duration of the course will be 300 Hours comprising of: 

Self Study Class room teaching  Case Study in Groups and project preparation 

200 hours 50 hours 50 hours

Course Fee is ` 20000/The candidates registered for the Course will have to attend the class room training on alternate Saturdays/ Sundays Course Coordinator for Bangalore CA K Raghu, Central Council Member Mob: 9341219091 E-mail: kraghu@kraghu.com

For any query, please contact: Course Coordinator: Corporate Laws and Corporate Governance Committee Ph: 0120 3045969 E-mail: valuation@icai.org

You may also contact Institute’s Office at Bangalore - 080 3056 3541 / 3543 , dcobangalore@icai.org

Discussion on the Karnataka Public Trusts Bill 2011 The Karnataka Public Trusts Bill affect all public trusts and societies which are in the fields of education , medical relief and other charitable activities in the state of Karnataka. The State government will be exercising direct and indirect control on activities and also impose restrictions on property acquisitions, disposal and also borrowings by the trusts which will have far reaching implications. As we CAs, it is imperative on our part to be fully knowledgeable on the implications of these bills once it is operative and represent the government. Hence this discussion. Speakers: 1. Shri. K G Raghavan, Senior Advocate 2. CA. Dr. N Suresh 3. CA. N Nityananda

Date: 09.05.201(Monday)

CPE

3 Hrs

Time: 05.00pm to 08.00pm Venue: Branch Premises

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May 2011


Workshop on “Accounting Standards” Organized by

Bangalore Branch of SIRC of ICAI

CPE

16 Hrs

at Branch Premises between 04.00pm & 08.00pm on Monday, 23rd, Tuesday, 24th, Thursday, 26th and Friday, 27th, May 2011 The mandatory status of an Accounting Standard implies that while discharging the attest functions, it will be the duty of the members of the Institute to examine whether the Accounting Standard is complied with in the presentation of financial statements covered by their audit. In the event of any deviation from the Accounting Standard, it will be their duty to make adequate disclosures in their audit reports so that the users of financial statements may be aware of such deviation. The workshop would deal with: ❖ Highlights of each standard. ❖ Specific issues in each standard. ❖ Common mistakes committed in the financial statement with regard to the standard. ❖ Key difference with IND-AS.

Date

23.05.11 Monday

24.05.11 Tuesday

26.05.11 Thursday

27.05.11 Friday

Session 1

Session 2

(04.00pm – 06.00pm) Topic

(06.00pm – 08.00pm) Topic

AS- 1-Disclosure of A/c’ing Policies AS – 3 – CFS AS – 4 - Contingency & events after B/s date AS – 5- P&L for period / prior & changes in a/c policies Speaker : CA. Vinayak Pai AS – 14 – Amalgamations AS – 21- CFS AS – 23- Investment in associates in CFS AS – 27- Interest in Joint Ventures Speaker : CA. Vikas Oswal AS – 2 - Valuation of Inventory AS – 13 - Investment AS – 19- Leases AS – 24- Discontinuing Operations Speaker : CA. Naina Gadia

AS – 30, AS – 31, AS – 32 - Financial Instrument

AS – 7- Construction Contracts AS – 9- Revenue Recognition AS – 11- Effects of changes in forex rates AS – 12- Govt grants Speaker : CA. Cherian K Baby

AS – 15- Employee Benefit AS – 16- Borrowing Cost AS – 22- Taxes on Income AS – 29- Provision /Contingent asset & liability Speaker : CA. Ganesh Swaminathan

Workshop Co-ordinator: CA. K Gururaj Acharya Delegate Fees: ` 1,000/-

Speaker : CA. S Sundaresan

AS – 17- Segment Reporting AS – 18- Related Party AS – 20- EPS AS – 25- Interim Reporting Speaker : * CA. Shyam Ramadhyani AS – 6- Depreciation AS – 10- Fixed Asset AS – 26- Intangible Asset AS – 28- Impairment of Asset Speaker : CA. Pritesh K Shah

*Confirmation awaited For further details please contact: Mrs. Roopashree Tel: 080-30563500 / 3513 Email: blrregistrations@icai.org

“VIEW CPE HOURS CREDIT AT THE CLICK OF A MOUSE” Follow the simple procedures as below:1. Log into Website; www.cpeicai.org 2. 3. 4. 5. 6.

May 2011

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Log in by feeding your 6 digit membership number (XXXXXX) Feed Password as-cpe followed by 6digit membership number (e.g. cpeXXXXXX) Page of Event Attendance (structured Learning) of year 2011 will open. To view CPE Credit of other calendar year click in the corresponding year Click ‘ULA Attendance’ to view unstructured learning activities credit of particular calendar year.


Bangalore Branch of SIRC of the Institute of Chartered Accountants of India

One day seminar on

“Investment Banking Opportunity” Organized by

Bangalore Branch of SIRC of ICAI Saturday, 14th May 2011 at Branch Premises between 09.45am & 05.00pm

CPE

6 Hrs

Investment Banking domain is growing its relevance in India and offers great opportunity for CA professionals. CA skill set is apt for Investment Banking. Keep in this in view, in the interest of our members, this seminar is being organized. Session

Timing

1st Session

Topic

09:45 AM – 10:30 AM

Relevance of Business Finance

nd

10:30 AM – 11:00 AM

Role of Investment Banking in Business Finance

rd

11:00 AM – 11:30 AM

Investment Banking Boom

11:30 AM – 11:45 AM

Tea Break

11:45 AM – 01:30 PM

Functional Scope of Investment Banking

2 Session 3 Session th

4 Session

01:30 PM – 02:15 PM

Lunch Break

th

02:15 PM – 02:45 PM

Professional Skill-set for Investment Banking

th

02:45 PM – 03:45 PM

Opportunities for CAs in Investment Banking

03:45 PM – 04:00 PM

Tea Break

04:00 PM - 05:00 PM

Opportunities for CAs in Investment Banking (Contd...)

5 Session 6 Session 6th Session

Speakers: CA. Raghunath A & CA. Srinivas MRS Delegate Fees: ` 500/-

For further details please contact: Mrs. Roopashree Tel: 080-30563500 / 3513 Email: blrregistrations@icai.org

Congratulations!!! Mr.K.Raghu, Central Council Member has been appointed as: 1) Director of XBRL India (Section 25 Company) as a nominee of ICAI to promote the use of XBRL (Extensible Business Reporting Language) in India. XBRL India is a member of XBRL International, a consortium of 550 organizations worldwide. 2) ICAI representative on the MCA 21 Stakeholders Committee constituted by Ministry of Corporate Affairs for ensuring continuous improvement in service delivery under MCA 21. Members can send their views and suggestions to cakraghu@kraghu.com to make MCA 21 more user friendly.

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May 2011


IMPORTANT DATES TO REMEMBER DURING THE MONTH OF MAY 2011 5th May 2011

Payment of Excise Duty for April 2011 Payment of Service Tax for April 2011 by Corporates

th

6 May 2011

E-Payment of Excise duty for April 2011 E-Payment of Service Tax for April 2011

th

7 May 2011 th

10 May 2011

Deposit of TDS/TCS Collected during April 2011 Monthly Returns for Production and Removal of Goods and CENVAT Credit for April 2011 Monthly Return of excisable Goods Manufactured & Receipt of Inputs & Capital Goods by Units in EOU,STP,HTP for April 2011 Monthly Returns of Information relating to Principal Inputs for April 2011 by Manufacturer of Specified Goods who Paid Duty of Rs.1 Crore or More during Financial Year 2010-11 By PLA/ CENVAT/Both

12th May 2011

Half Yearly Return for ESI Contribution for the Half year ending 31st March 2011

15th May 2011

Payment of EPF Contribution for April 2011 Return of Employees Qualifying to EPF during April 2011 Quarterly Returns for Tax Deducted at Source Payments during January to March 2011 Quarterly Returns for Tax Deducted at Source Collected during January to March 2011 Statement of Tax Deducted at Source from Interest, Dividend, or any other sum payable to Non Resident during January to March 2011.

20th May 2011

Monthly Return and Payment of CST and VAT Collected During April 2011

21st May 2011

Deposit of ESI Contributions and Collections for April 2011

25th May 2011

Consolidated Statements of Dues and Remittances Under EPF and EDLI for the April 2011 Monthly Returns of Employees Joined the organisation during April 2011 Monthly Return of Employees left the organisation during April 2011

th

30 May 2011

TDS Certificate for Deductions made except Salaries for the quarter January to March 2011 Annual Return for Professional Tax for the Financial year 2010-2011.

st

31 May 2011

Issue of TDS Certificate for Deductions from Salaries for the Financial year 2010-2011 Return of TDS from Contributions paid by the Trustees of an approved Superannuation Fund.

Requirement of Land / Building for Bangalore Branch Bangalore Branch of SIRC of ICAI is looking out for land /building for outright purchase /long lease for additional premises within the city of Bangalore. Minimum required land is 15,000 sqft. upto 20,000 sqft. The land should be situated close to the Bangalore Metro Station and having easy accessibility and wide roads. Any builtup building facility of about 20,000 sq ft. and having adequate parking facilities can also be considered. The branch is also open to consider long lease of atleast 25 years. Please mail the details of land or building available to blrbuilding@icai.org

May 2011

16


Bangalore Branch of SIRC of the Institute of Chartered Accountants of India

National Seminar on XBRL – Extensible Business Reporting Language Organized by CPE

XBRL India

6 Hrs

Jointly with the

Continuing Professional Education Committee (CPE) and Committee for Members in Industry (CMII) of the ICAI Hosted by:

Bangalore Branch of SIRC of ICAI

Date & Time 27th May , Friday, 2011 9.00 am – 5.00 pm Venue: Hotel Lalit Ashok Kumar Krupa, High Grounds Bangalore - 51 Technical Session – 4

Technical Session – 1 An Introduction to XBRL ● What is XBRL ● XML/XBRL Basic Concepts ● Advantages of XBRL ● Global XBRL Initiatives Speakers CA. Jayshree Narayanan CA Atul Bheda Bangalore Central Council Member Mumbai Technical Session – 2 XBRL Taxonomies ● Key concepts of taxonomies ● Indian GAAP Taxonomy ● Mapping, Tagging and assigning context ● Creating Instance documents Speakers Mr. K. Balachandran Iris Business Services, Mumbai

Opportunities for Chartered Accountants in XBRL India- Roadmap Speakers CA Anand Jangid Infosys Technologies Ltd Bangalore CA.K. Raghu Central Council Member Delegate Fees

Technical Session – 3 Financial reporting and XBRL ● XBRL based Financial Reporting- Case Studies ● XBRL based Regulatory Reporting - Case Studies Speakers Ms. Gargi Ray Infosys Technolgies LtdBangalore

CA K.Raghu Programme Chairman and Director, XBRL India

XBRL Implementation Tool ● Implementing XBRL solutions ● Overview of XBRL Generation Process ● XBRL Tools and Solutions – Case studies ● Taxonomy Editing and Extensions Speakers Mr. Aman Puri Ms. Shweta Gupta Fujitsu Consulting India, Iris Business Services, New Delhi Mumbai Technical Session- 5

CA Sumantro Guha Chairman CPE Committee of ICAI

Member ` 1750/-

Non Member ` 2000/-

Cheque / Cash in favour of “Bangalore Branch of SIRC of ICAI” For further details please contact Mrs. Roopashree Tel : 080-30563500 / 3513 Email: blrregistrations@icai.org CA. Atul Bheda Programme Coordinator and Director, XBRL India

CA. Venkatesh Babu T.R. Chairman Bangalore Branch

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May 2011


National Conference for IT Industry at Bangalore Organised by Committee

for Members in Industry Hosted by Bangalore Branch of SIRC of ICAI 24th and 25th June (Friday & Saturday), 2011 at Hotel Le-Meridian, Sankey Road, Bangalore Timing: 9.00 am – 5.30 pm Inaugural Session by

CA G. Ramaswamy, President, ICAI & CA. Jaydeep N Shah, Vice-President, ICAI

CPE

12 Hrs

DAY 1 Timings Technical Session 1 10:45 a.m. – 01:00 p.m. Technical Session 2 01:45 p.m –03:45 p.m. Technical Session 3 04:00 p.m. – 05:30 p.m.

Topics to be discussed Taxation of Employees Expatriates & On-site employees, Residential status, Allowances, Foreign tax Credit with holding Tax ESOP’s etc. Indirect Tax issues impacting the IT Industry Classification and Valuation of Services, Exemptions, Abatements & Special Rates, CENVAT Credits VAT – Issues currently affecting the IT industry Customization of software, Manpower deployment, Maintenance Contracts, Double Taxation (Vat & Service Tax), Upgrade of Software & Hardware, Sale in the course of import, Recent Judgments

DAY 2 Technical Session 1 10:00 a.m. – 11:00 a.m. Technical Session 2 11:15 a.m. – 12:15 p.m. Technical Session 3 02:00 p.m. – 03:15 p.m. Technical Session 4 03:30 p.m. –05:00 p.m.

Service Tax - Issues specific to the IT/ITES Industry Export and Import of Services, Expediting refunds, Goods v/s services Accounting Standards for the IT Industry - Issues International Taxation – Framework for the IT Industry Royalties and Technical Fees – Judicial Trends, Withholding Tax - Issues International Taxation– Other issues Transfer Pricing – Recent trends, Transfer Pricing – Issues arising during Assessments

Delegate Fees : ` 3000/- for Members, `4000 /- for Non Members Payment should be made by Cheque / DD in favour of “Bangalore Branch of SIRC of ICAI” payable at Bangalore and should be sent to - Bangalore Branch of ICAI, The Institute of Chartered Accountants of India, ICAI Bhawan, 16/O, Millers Tank Bed Area, Vasant Nagar, Bangalore - 560 052 Programme Chairman

Programme Coordinator

CA K.Raghu

CA Venkatesh Babu

Chairman – Committee for Members in Industry

Chairman, Bangalore Branch of SIRC of ICAI

For Registration and Further Details please contact :

Bangalore branch of the ICAI : Telephone- 080- 3056 3541 Email: dcobangalore@icai.org

May 2011

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Bangalore Branch of SIRC of the Institute of Chartered Accountants of India

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May 2011


May 2011

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Bangalore Branch of ICAI May 2011  

Bangalore Branch of ICAI