wirc june final - rajkot-icai.org

Rajkot Branch of WIRC of the Institute of Chartered Accountants of India

NEWSLETTERJUNE-2021


NEWSLETTER JUNE-2021

...02

Dear Members, Namaste!

Greetings from Rajkot Branch of WIRC of ICAI!!!

ICAI, being a true partner in Nation Building, has always proactively acted to various initiative, be it

literacy in financial matters pertaining to accounting and taxation or government vision to make

India Aatmanirbhar. In this tough time, expectations from government, business and other

stakeholders i.e. society have increased. In this direction, we need to gear up and support to the

government and society in every possible manner.

Last two months, i.e. April and May were very tough for Rajkot in this

pandemic. We have seen so many unpleasant things happening around

us. I appreciate that during this period, many of us came forward to be

helpful to the society in different manner. We at Rajkot Branch, have

taken many initiatives in this regard. We have arranged food parcel

services for the members and students and their families. We have

arranged tele-consultation to boost immunity through Ayurveda. We

have created Special Covid-19 task force to help members and

students 24x7 in finding Oxygen Cylinder, Refilling Station, Bed,

Medicines, etc. We have served society with the help of our members

and students by sending food parcels at door step to those who are Covid affected and in home

isolation. We feel satisfied by contributing to fraternity and society during this time.

Government has come out with various relaxation in GST and Income Tax Acts. As a professional

we need to be updated irrespective of challenges. Rajkot Branch has made sure that learning should

not stop and accordingly has organized various Virtual CPE meetings for the benefit of the fraternity.

Members have actively participated to the unique program for Practice Management Strategy for

Rajkot. We are planning various workshops and CPE meetings in this month as well.

We are adopting the changes in work place environment. In this scenario, many of us are working

from or working with very limited staff and resources. We are known to face any kind of challenges

and we have proved this in recent days by serving our clients and society without any interruption. At

the same time, we need to be very careful in this scenario by taking proper precautions strictly so as

to be in good health and protect our near and dear ones. We need to be strong at our health, physical

and mental with the hope that this tough time will pass soon.

Take care and stay safe.

Sincere Regards,

CA. Hardik Vyas

Chairman

CHAIRMAN'S MESSAGE

Inside this Issue

Managing & Sub Committee

Stress & Oral Health

Producer Companies under Company Law – what we must know

Key Changes in TAX Audit

Purusha & Nature

Glimpses of Past Events

APPEAL TO CONTRIBUTE KNOWLEDGE SHARING :

We wholeheartedly invite articles, professional news and updates and other useful miscellanea.

Please send/write to us on Rajkot Branch at

[email protected]

or

to any of the committee members.

SUBCOMMITTEEMEMBERS



...03

CA. Hardik Vyas

[email protected]

98794 28512

cajigneshrathod@gmail. com

99245 16576

[email protected]

99240 06399

ca,[email protected]

94272 63462

[email protected]

96389 82500

[email protected]

99747 41312

[email protected]

99043 47388

CA. Jignesh Rathod

Ankit Kothari

Dhaval Doshi

Dhaval Gorasiya

Kashyap Soni

Kinnari Mehta

Mitul Mehta

Paras Sheth

Raivat Shah

Raj Marvaniya

Ramesh Patel

Siddhi Dalal

Vishal Rachchh

CA. Bhavin Doshi

CA. Sanjay Lakhani

CA. Vinay Sakariya

CA. Bhavin Mehta

CA. Deepti Savjani

Chairman

Vice chairman

Secretary

&

WICASA Chairman

Treasurer

Imm. Past Chairman

Past WICASA

Chairperson &

Managing

Committee Member

Past Chairman &

Managing

Committee Member

MANAGING COMMITTEE 2021-22



...04

Producer Companies

under Company Law

– what we must know



...05

CS Lalit [email protected]

inistry of Corporate Affairs (MCA)

through introduction of the Companies M(Amendment) Act, 2020 vide gazette A Producer Company can be established / registered

notification id CG-DL-E-28092020-222070 dated for the lawful objects, related to improving the standard of

28.09.2020 has inserted a new Chapter XXIA which deals living of those involved in the agricultural sector,

with the provis ions regarding PRODUCER specified under the provisions of Section 378B of the COMPANIES the Companies Act, 2013 and the same has Companies Act, 2013, which includes the followings:been notified on 11.02.2021by the Central Government, a) production, harvesting, procurement, grading, MCA, through a separate gazette notification idCG-DL- pooling, handling, marketing, selling, export of primary E-11022021-225115 (click here) dated 11th February, produce of the Members or import of goods or services for 2021. their benefit, either by itself or through other institution;

b) processing including preserving, drying, distilling, brewing, vinting, canning and packaging of produce of its Members;

As per the Provisions: "Producer Company" c) manufacture, sale or supply of machinery, means a body corporate having objects or activities equipment or consumables mainly to its Members;specified in section 378B and registered as Producer d) providing education on the mutual assistance Company under this Act or under the Companies Act, principles to its Members and others;

1956; e) rendering technical services, consultancy services, training, research and development and all other In general, Producer Company can be defined a activities for the promotion of the interests of its legal Body Corporate, registered under the Companies Members;Act 2013 or under applicable provisions of the Companies

f) generation, transmission and distribution of Act 1956, as the case may be, and which includes farmers / power, revitalization of land and water resources, their agriculturists and is working with a vision / object to use, conservation and communications relatable to

improve the standard of their living and ensure a good primary produce;

status of their available support, incomes and profitability.g) insurance of producers or their primary produce;

Further "producer" means any person engaged in h) or other activities which may promote the principles

any activity connected withor relatable to any primary of mutuality and mutual assistance amongst the Members

producein any other manner;

List of Activities/objects to be carried

out by Producer Company:

Define Producer Company under the

Company Law:


NEWSLETTER MAY-2021

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Key Points to be kept in mind while doing

Incorporation of Producer Company:

Provisions related to Annual General

Meeting (AGM)

Registration Timeline:

Provisions related to Board Meeting of

Producer Company

Maximum gap between

two Board Meeting 3 months

Notice of Board Meeting Shallbe given in writing 1. Who can form a Producer Company?

to every director at his i) Any 10 or more individuals, each of them being a

u s u a l a d d r e s s i n producer or/

Indiaatleast 7 days prior ii) two or more Producer Institutionsor/

the date of meeting. iii) a combination of ten or more individuals and Producer

Quorum of the Institutions)

Board Meeting Shallbe one-third (1/3rd) 2. Objects: As mentioned above and can refer section

of the total strength of 378B of the Companies Act, 2013.

directors, subject to a 3. Board Composition: Every Producer Company shall

minimum of 3 directors.have at least 5 and not more than 15 directors

4. Type of Capital: The share capital of a producer

company consists only of equity shares.

5. Name Style: The name of a producer company must 1. First AGM: Within a period of 90 days from the date end with the words 'Producer Company Limited'. of its incorporation, wherein the company must adopt its

articles of association and appoint the directors of its

board.After successful submission of all the required documents 2. A producer company must hold an annual general and information with Ministry of Corporate Affairs

meeting of its members every year.(MCA), The authority will do a check. If satisfied that all

3. Gap between two AGM’s: not more than 15 months requirements regarding registration have been complied

shall elapse between the date of one annual general with, the Concerned Registrar of Companies will register

meeting of a Producer Company and that of the next. the memorandum, articles and other documents, if any,

and issue a certificate of incorporation under the 4. Thequorum for a general meeting of a producer

Companies Act 2013 within 30 days of receipt of the company is one-fourth of the total members, unless the

requisite documents. articles of the Producer Company provide for a larger

number

5. A general meeting of the Producer Company shall be

called by giving not less than 14 days prior notice in Provisions Details

writing.Minimum no. of Meetings

in a Financial Year At least 4 meetings



NEWSLETTER MAY-2021

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Some Important Provisions:

Annual Compliance related to Producer Company


NEWSLETTER MAY-2021

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The Producer Companies Rules, 2021Analysis:

Key Highlights:

office of a Producer Company from one State to another.

Ministry of Corporate Affairs (MCA) vide Gazette ID No.

Rule(s) under the Companies (Incorporation) CG-DL-E-11022021-225116 and F. No. 5 /1 /2020-CLI Rules, 2014dated11thday of February, 2021 has released the the 27 Notice and Verification of Change of Situation of the Producer Companies Rules, 2021 in section 378H (4) and Registered Office.-section 378ZL (1) read with section 469 (1) & (2) of the

The notice of change of the situation of the Companies Act, 2013, and in supersession of the Producer registered office and verification thereof shall be filed in Companies (General Reserve) Rules, 2003,except as Form No.INC.22 along with the fee and shall be attached respects things done or omitted to be done before such to the said form, the similar documents and manner of supersession.verification as are specified for verification of Registered Applicability: office on incorporation in terms of sub-section (2) of They shall come into force on the date of their publication section 12.in the Official Gazettei.e. w.e.f. 11.02.2021.30. Shifting of Registered office from one State or To whom Applicable:Union Territory to another stateThese rules shall apply to a Producer Company as referred

(1) An application under sub-section (4) of section in clause (l) of section 378A.13, for the purpose of seeking approval for alteration of

memorandum with regard to the change of place of the

1. Key definition clause: registered office from one State Government or Union

Rule 3 (1) (c) “co-operative society” means a society territory to another, shall be filed with the Central

registered or deemed to be registered under any law Government in Form No. lNC.23 along with the fee and

relating to co-operative societies for the time being in shall be accompanied by the following documents

force in any State. required under this sub – rule.

Rule 3 (2) Words and expressions used in these rules but ( read full read at

not defined and defined in the Act or in the Companies http://ebook.mca.gov.in/Default.aspx?page=rules )

(Specification of Definitions Details) Rules, 2014, shall 31 Certified Copy of Central Government's Order

have the same meanings respectively assigned to them in The certified copy of the order of the Central

the Act or in the said rules.Government, approving the alteration of the

Rule 4. Change of place of registered office from one memorandum for transfer of registered office of the

State to another.-company from one State to another, shall be filed in Form

The rules 27, 30 and 31 of the Companies (Incorporation) No.INC.28 along with the fee as with the Registrar of the

Rules, 2014, including the forms stated therein shall be State within thirty days from the date of receipt of certified

applied for the purpose of change of place of registered copy of the order.



NEWSLETTER MAY-2021

...09

Rule: 5. Investment of general reserves.- e. in the shares or securities of any other inter-State

A Producer Company shall make investments from and co-operative society or any co-operative society; or

out of its general reserves in any one or in combination of f. in the shares, securities or assets of public

the following, namely:- financial institutions specified under clause (72) of

a. in approved securities, fixed deposits, units and section 2 of the Act.

bonds issued by the Central Government or State

Governments or co-operative societies or scheduled Disclaimer:Every effort has been made to avoid errors or

bank; or omissions in this material. In spite of this, errors may

b. in a co-operative bank, State co-operative bank, creep in. Any mistake, error or discrepancy noted may be

co-operative land development bank or Central co- brought to our notice which shall be taken care of in the

operative bank; or next edition. In no event the author shall be liable for any

c. with any other scheduled bank; or direct, indirect, special or incidental damage resulting

d. in any of the securities specified in section 20 of from or arising out of or in connection with the use of this

the Indian Trusts Act, 1882 (02 of 1882); or information


x



...10

Key Changes

in TAX Audit



...11

CA Gaurav Gupta

ax Applicability and Procedure 2017:

Audit of accounts of certain persons carrying (e) carrying on the business shall, if the provisions of Ton business or profession. sub-section (4) of section 44AD are applicable in his

case and his income exceeds the maximum amount

44AB. Every person, which is not chargeable to income-tax in any

(a) carrying on business shall, if his total sales, turnover previous year,

or gross receipts, as the case may be, in business get his accounts of such previous year audited by an

exceed or exceeds one crore rupees in any previous accountant before the specified date and furnish by

year; or that date the report of such audit in the prescribed

(b) Carrying on profession shall, if his gross receipts in form duly signed and verified by such accountant

profession exceed Fifty lakh rupees in any previous and setting forth such particulars as may be

year; or prescribed :

(c) carrying on the business shall, if the profits and Provided that this section shall not apply to the

gains from the business are deemed to be the profits person, who derives income of the nature referred to

and gains of such person under section 44AE or in section 44B or section 44BBA, on and from the

section 44BB or section 44BBB, as the case may be, 1st day of April, 1985 or, as the case may be, the

and he has claimed his income to be lower than the date on which the relevant section came into force,

profits or gains so deemed to be the profits and gains whichever is later :

of his business, as the case may be, in any previous

year; or However in order to reduce compliance burden on small

(d) carrying on the business shall, if the profits and and medium enterprises, The Finance Act 2020 has

gains from the business are deemed to be the profits increased the threshold limit for a person carrying on

and gains of such person under section 44AD and he business from Rs 1 crore to Rs 5 crore in case where

has claimed such income to be lower than the profits cash receipt and payment made during the year does

and gains so deemed to be the profits and gains of not exceed 5% of total receipt or payment, as the case

his business and his income exceeds the maximum may be.

amount which is not chargeable to income-tax in any

previous year, Summarized description of some clauses of form 3CD

Following clause (e) shall be inserted after clause (d) of Clause 15 :- Particulars of capital asset converted into

section 44AB by the Finance Act, 2016, w.e.f. 1-4- stock in trade

[email protected]



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There are Following sub clauses in Clause 15, which is be the full value of the consideration

as follows:- illustrative list of capital receipts (Sub Clause (e)) not

• Description of Capital Asset [Sub clause (a)] credited to Profit & Loss Account

• Date of Acquisition [Sub clause (b)] • Capital subsidy received in the form of government

• Cost of Acquisition [Sub clause ©] grants which are in the nature of promoters’

• Amount at which asset is converted into stock in trade. contribution.

[Sub clause (d)] • Government grants related to specific fixed asset.

For reporting under Clause 15, the following • Compensation for surrender of rights.

provisions need to be considered: • Profit/loss on sale of fixed assets/investments to the

extent not credited in the profit and loss account.

1) Section 2 (14) - Definition of capital asset:

Capital asset means property of any kind held by an Clause 17:-Transfer of Land & Building at a value

assesse whether or not connected with his business or lesser than Stamp duty value

profession but does not include ; Where any land and building or both is transferred

I. Stock in trade, raw materials or consumable stores. during the previous year for a consideration less than

ii Personal effects of movable nature. the value adopted or assessed or assessable by any

iii. Rural agricultural land. authority of a State government referred to in Section

iv. Gold deposit bonds. 43CA or 50C.

2) Section 2(47) - Definition of transfer: For reporting under Clause 17, the following

Transfer, in relation to capital asset, includes, inter provisions need to be considered:

alia, - conversion of capital asset into stock in trade of a 1) Section 43CA - Special provision for full value of

business carried on by the assessee consideration for transfer of assets other than capital

assets in certain cases:

3) Section 45 – Capital Gains: It is applicable where an asset (other than capital asset)

n Under sec 45(2) the capital gains arising from such being land or building or both has been transferred and

conversion a capital asset into, or its treatment as the value of such an asset is less than the value adopted

stock-in-trade of a business shall be chargeable to for the purpose of payment of stamp duty. The value so

income-tax as his income of the previous year in adopted shall be deemed to be the full value of

which such stock-in-trade is sold or otherwise consideration and the gain arising there from is taxable

transferred as business income.

n Further, the fair market value of the asset on the date 2) Section 50C - Special provision for full value of

of such conversion or treatment shall be deemed to consideration in certain cases:




...13

It is applicable where a capital asset being land or Income Tax Act, 1961 be allowed as deduction.

building or both has been transferred and the value of

such an asset is less than the value adopted for the Matters to be considered:

purpose of payment of stamp duty. The value so • What would be the disallowance in case the auditor is

adopted shall be deemed to be the full value of liable to pay any interest under MSME Act but he

consideration and the gain arising therefrom is taxable has not provided the interest in his accounts?

as capital gain. • In such a case, what would be the situation when he

actually pays and claims such interest?

Clause 22 :-Amounts inadmissible under Section 23 • Where the auditor has relied on the auditee for

• As per section 23 of MSME Act the interest classifying and identifying the suppliers covered

payable or paid by the buyer, under or in accordance under the MSME Act, 2006 whether a note

with provisions of Section 16 of the Act , shall not explaining the reliance placed on auditee is enough

for the purpose of computation of income under to discharge the onus?




...14


Meaning of Micro, small and Medium Enterprises:-Organization which has fulfilled the following criteria has been defined Micro, Small and Medium Enterprises. Recently Government has revised the limit in all cases, which is as follows.:

Clause 23:- Payments to Related parties Particulars of payments made to persons specified u/s. 40A(2)(b)


NEWSLETTER

...15

Oral Health

Stress &

Dr. Shradhdha [email protected]

Gum Diseases

Stress and anxiety can give rise to gum diseases. This

frequently leads toSoft and red gums

Bleeding gum

Bad breath and many more

Stress obstructs the immune system causing

inflammation and increased number of disease bacteria.

The habit of smoking and grinding of teeth under stress Researchers studied the link between stress and gum

accelerates the condition.disease. They found out that the body loses its ability to

n

n

n

tress is the most prevalent cause of health problems and oral health is no exception.With unexpected things happening all around you, coping with stress may be difficult and can start to take a toll on Syour body. Research has found strong link between stress and deterioration of oral health than people

can imagine. Along with impact on mental and emotional state, stress can have severe consequences on oral health too. Few most common oral conditions that results due to stress are as given below:

JUNE-2021



...16

Stress Oral Health&

produce immune cells used for protection against Behaviour changes.Biofeedback.bacteria when experiencing stress which causes various

(If you're having a hard time changing your habits, periodontal problems making a person more prone to

you may benefit from bio feedback, a method that gum diseases.

uses monitoring procedures and equipments teach

you to control muscle activity in your jaw.)Treatment/Preventive Measures:

Brush twice daily.

Use soft bristle toothbrush.

Visit dentist for regular dental cleaning 6 months.

Use tongue cleaner daily. Canker sores or mouth

Use mouthwashes to avoid bad breath. sores (white spots found

Manage stress. on the soft tissue of the

mouth) are harmless but

can be painful. One of

the main causes of mouth

ulcers is emotional stress Many conditions can They will usually go away be linked with teeth

grinding and stress is on their own within 1-2 one of them. Teeth weeks. If the problem clenching is done by a

does not resolve on itsown, one must visit a dentist.person during sleep. Grinding of teeth can

Treatment/Preventive Measureslead to various problems such as:

Take folic acid daily.

Use over the counter oral anaesthetic.HeadacheDamaged jaw Avoid spicy food.Fractured teeth, if not treated

Consume vitamin C rich food and drinks.Changes in facial appearanceDon’t smoke or use Tobacco.

Treatment/Preventive Measures: Avoid or limit alcohol consumption.

Drink plenty of water and fruit juices.Get a tooth guard or night guard from dentist to

Visit dentist if symptoms persist over 15 days.avoid sliding of teeth on one another during sleep

preventing any sort of damage to oral cavity.Stress and anxiety management.

••

•

•

•

•

•

•

•

•n n •n

•n

•

•

••

•

•

Mouth sore (Mouth Ulcer)

Teeth Grinding



...17

Dry Mouth Temporomandibular

(TMJ) Joint DisorderDry mouth is a side effect of

both stress and medication Temporomandibular joints are used for treating depression the joint use for moving the and stress. The mouth often lower joint and they are found uses saliva as a defence below the ear. Swelling of this against therefore, dry mouth joint can lead to TMJ disorder. leads to an increase in infection, tooth decay, and Research has shown that stress is many moreone of the major causes of TMJ

disorder. This is because people tend to overuse the Treatment/Preventive Measuresjaw muscle when stressed. When stressed, we tend to

do more teeth grinding and jaw clenching which can Sip water.lead to TMJ disorder.Chew sugar-free gums.

Try over the counter saliva substitutes.Treatment/Preventive Measures:

Breath through mouth.

Moisturize your lips. Avoid overuse of jaw muscles by taking small bites Use fluoride toothpaste and mouth rinse to avoid and avoiding hard food.teeth decay. Use hot and cold packs on the side of the face to

Visit dentist every six months for prescription alleviate pain.Consult dentist for stretching exercise to strengthen medication.jaws and massage therapy for relaxation of jaw

muscles.Consult dentist for further diagnosis with the help of

X-rays, CT scans and MRI’s.Use over the counter anti-inflammatory medicines for

symptomatic relief.

•

•

•

•

• ••

•

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•

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Stress Oral Health&

x



...18

Purusha Nature

&



...19

emanating from Nature and consented by Purusha, will ach person or existence has two sides made up of be of mental manifestation. Thus the manifestation takes Purusha and Nature. Purusha itself is the Divine place according to the concentration of consciousness in Ein its origin but according to the plane of the existence/being. These Purusha and Nature are not Consciousness it manifests through the executive Force only in man but also in everything that exists. They are of the Divine. This executive force is Natur. This Nature there in the whole manifestation right from the Cosmos to or executive force cannot act in its own but with the help the tiny cell in our body. Purusha is a centre, like an axis, and support of the divine element in us i.e. Purusha.by which and through it Prakruti acts through her powers

We have earlier seen that the manifestation of five sheaths and forces. The actions of Prakruti pervade everything of our being (for details see Newsletter October 2020) for and even beyond like Purusha supports everything yet which it can be better understood according to the plane it beyond it. Both are individual, cosmic and represents. transcendental.

But, we are trapped in the Ignorance, darkness, falsehood

and inertia(tamas). Thus, the manifestation our will is

deformed and not true according to the Divine’s Will.

Thus, in Nature there is the higher and the lower, the true

and the false movements and activities. How to liberate

from these lower movements of the Nature?

All the actions of the Nature are supported by the

respective purusha. Though Purusha and Prakriti both are We are sons of God and must be even as he:

Divine in their origin but due the law of ignorance, they His human portion, we must grow divine.manifest according to the plane and activity of each plane Our life is a paradox with God for key.of consciousness. For example, if someone is normally -Sri Aurobindo

dwelling in mental sheath, his/her actions, through

: Light & Delight :

CA K C [email protected]

x



...20


Virtual Seminar on “ICAI Code

of Ethics- Recent Changes and

Important Aspects”

CA. Mangesh Kinare, Past

Chairman WIRC & Ex - CCM

Date : 08/05/2021

Speaker

Virtual CPE Meeting on New

Scheme of Registration of Trusts

under Income Tax

CA. Suhas Malankar, Goregaon

Date : 15/05/2021

Speaker

Virtual CPE Meeting on Practice

Management Strategy for Rajkot

CA. Umesh Sharma, RCM

Date : 14/05/2021

Speaker



...21


Virtual CPE Meeting on “Recent

Amendments in Schedule III

CA. Chintan Patel, RCM

Date : 21/05/2021

Speaker

Virtual CPE Meeting on Right to Information Act, 2005

Virtual CPE Meeting on

"Workshop on Google Data

Studio”

CA. Ahmed Ali, Indore

Date : 28/05/2021

Speaker

Speakers

CA. Mahadev Birla, Ahmedabad

Adv.(CA) Nipun Singhvi, Ahmedabad

Date : 29/05/2021



...22

RAJKOT BRANCH OF WIRC OF INSTITUTE OF CHARTERED ACCOUNTANTS OF INDIA

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