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Society News for the month of June 2024



1. FEMA Study Circle meeting – “Compounding under FEMA and Practical aspects” by CA Hardik Mehta was held on 16th May, 2024 @Zoom which was attended by approximately 118 participants, wherein the following was covered:

(i) Overview of FEMA Compounding Provisions:

  •  Explanation of the Foreign Exchange Management Act (FEMA) and its objectives.
  •  Understanding the concept of compounding as an alternative to litigation for resolving contraventions under FEMA.

(ii) Eligibility for Compounding:

  •  Criteria for entities and individuals eligible to apply for compounding.
  •  Types of contraventions that can be compounded under FEMA.

(iii) Application Process:

  •  Step-by-step process for filing a compounding application with the Reserve Bank of India (RBI).
  •  Key documents and information required for the application.

(iv) Authorities Involved:

  •  Role of the Reserve Bank of India (RBI) and the Enforcement Directorate (ED) in the compounding process.
  •  Jurisdiction and powers of the compounding authorities.

(v) Calculation of Penalties:

  •  Methods and principles used by the RBI to calculate the penalties for various contraventions.
  •  Factors considered in determining the quantum of the penalty.

(vi) Timeline and Procedure:

  •  Expected timelines for the processing of compounding applications.
  •  Detailed procedure followed by the RBI fromreceipt of application to the issuance of compounding orders.

(vii) Common Contraventions and Case Studies:

  •  Discussion of frequently observed contraventions under FEMA, such as delayed reporting of foreign investments and non-compliance with ECB guidelines.
  •  Analysis of recent case studies and RBI orders to understand the practical application of compounding provisions.

(viii) Benefits of Compounding:

  •  Advantages of opting for compounding over litigation, including faster resolution and avoidance of prolonged legal battles.
  •  Impact on the company’s or individual’s compliance record.

(ix) Post-Compounding Compliance:

  •  Obligations and steps to be followed by the applicant post-compounding to ensure full compliance.
  •  Monitoring and reporting requirements after the compounding order is passed.

(x) Practical Challenges and Solutions:

  •  Discussion of practical challenges faced by entities in the compounding process

2. Direct Tax Laws Study Circle meeting on Taxation of LLPs by CA Chirag Wadhwa was held on Tuesday, 30th April, 2024 @Zoom, which was attended by approximately 77 participants, wherein the following was discussed:

1. Concepts of Limited Liability Partnerships

2. Detailed comparison of Company vs. LLP with respect to:

i. Compliance Procedures

ii. Regulatory Requirements

3. Comparison between Firms and LLP’s and FAQ’s relating to the same.

4. Income-tax implications in case of LLPs in respect of:

i. Deduction w.r.t Partner’s remuneration

ii. Carry forward of losses

iii. Assessment of LLPs

iv. Applicability of Alternate Minimum Tax to LLPs

5. Detailed explanation relating to conversion of Partnership Firm to an LLP and conversion of Company along with explanation relating to definition of “Transfer” as per Section 2(47) of the Income-tax Act, 1961, w.r.t conversion of a Company to an LLP.

The speaker concluded the session by sharingpractical experiences and challenges faced on conversion to LLP and transfer to LLP. The session wasinteractive and gave comprehensive understanding of the topic.

3. “Blood Donation & Organ Donation Awareness Drive” on 25th April, 2024

On Thursday, 25th April, 2024, the BCAS Foundation, jointly with the Seminar, Public Relations & Membership Development Committee of BCAS, held the annual “Blood Donation Drive”, enlisting the support of Tata Memorial Hospital (TMH) together with a campaign on awareness for organ and skin donation.

National Service Scheme (NSS) students (from Vidyalankar School of Information Technology) were deputed around the vicinity (including Churchgate Station), with placards to create awareness amongst the general public and commuters. Interested would-be donors were escorted to BCAS by the students.

Doctors and technicians from TMH screened 63 potential donors (including 31 brought in by the NSS students) through the detailed questionnaire filled in by them. Contrary to popular belief, patients diagnosed with cholesterol, thyroid, blood pressure issues could also donate blood, provided they met certain criteria. 43 units of blood were collected from eligible donors, which also included the President, Trustee of BCAS Foundation and few Past Presidents, BCAS members and staff.

To create awareness and dispel the myths about organ donation, an “Organ Donation Awareness Drive”, supported by Project Mumbai’s ‘Har Ghar Hai Donor’ initiative was also held. A separate desk was also provided to the Rotaract Club of Bombay North (RCBN) Skin Bank to advocate the noble act of donating skin. RCBN Skin Bank caters to the needs of the National Burns Centre (NBC), amongst others.

Through their noble act, each of the donors BeCame an Asli Superhero!

4. International Economics Study Group — “Analysing current Geopolitical & economic challenges” by CA Harshad Shah held on Monday, 22nd April, 2024 @Zoom which was attended by approximately 24 persons

In a world already embroiled in conflicts, from the volatile landscapes of Ukraine and Gaza to the tense standoff between Iran & Israel, the looming specter of confrontation casts a dark shadow over global stability. As geopolitical tensions escalate, their reverberations echo through international markets. The resulting volatility poses a significant risk, potentially triggering widespread repercussions that could have a ripple effect across economies worldwide. Adding to these geopolitical anxieties are the formidable economic challenges (stubborn inflation & unsustainable debt) confronting the world’s two largest economies, USA and China. Despite these daunting hurdles, financial markets in key regions such as the USA, Europe, Japan & India continue their upward trajectory,scaling unprecedented heights. Meanwhile, India finds itself at a crucial juncture as it navigates through a General Election. With political temperatures soaring, the spotlight is on the election manifestos of major political parties and their potential impacts on the Indian economy.

5. FEMA Study Circle meeting — “Recent updates in FEMA; Case studies in Overseas Investment — Part 1 & 2” by Naisar Shah and moderated by Harshal Bhuta was held on 16th& 22nd April, 2024 @Zoom, which was attended by approximately 111 participants, wherein the following was discussed:

The session was bifurcated into two events on two different dates

– Manner of Receipts and Payments under FEMA

– Direct Listing of Shares in Overseas Markets

– Listing on equity shares in permissible jurisdiction

– FAQs issued by Government

– Direct listing v/s depository receipts?

– Status of an unlisted public company will change upon direct listing

– Minimum public shareholding requirement?

– Resident HNIs investing indirectly?

– NRIs investing through FPI v/s. NRI investing directly

– Investment by Foreign Citizens

– CA valuation permitted even in cases where the book-building process would be done by a merchant banker

– FPI v/s. direct listing

6. Indirect Tax Laws Study Circle Meeting on Issues in Real Estate Sector by Group Leader CA Raghavender Kuncharapu and CA Sanket Shah was held on Monday, 22nd April, 2024 @Zoom which was attended by approximately 95 participants

Group leaders had prepared case studies and presentation covering various issues & challenges faced by taxpayers in Real Estate Sector under the GST law. The case studies covered the following aspects for detailed discussion on the following:

  1.  GST Registration
  2. Reversal of Input Tax Credit under Rule 42 in regard to commercial-cum-residential projects
  3.  Reverse Charge Mechanism (80:20 Rule)
  4.  Valuation, Time of Supply and GST Rate in case of RCM on following transaction:

– Transfer of Development Rights under residential redevelopment project

– Transfer of Development Rights by agriculturist

– Development agreement for shopping mall

– Additional FSI / TDR Purchase

– Buy TDS Scrip / Certificate

Participants appreciated the efforts of group leader.

7. Direct Tax Laws Study Circle meeting on Section 9B & Section 45(4) of the Income-tax Act, 1961 by Adv. Shashi Bekal was held on Friday, 12th April 2024 @Zoom, which was attended by approximately 90 participants, wherein the following points were discussed:

  1.  Difference between Partnership Firms and Limited Liability Partnerships.
  2.  Detailed analysis of section 9B of the Act, reason for its introduction, along with various frequently asked questions and his views thereon.
  3.  Detailed analysis and understanding of Section 45(4) of the Act and comparison of the same with the old provision.
  4.  FAQ’s on section 45(4) of the Act, 1961 along with methodology of computing gains as per the said section.
  5.  Interplay between section 9B and Section 45(4) ofthe Act.

The speaker’s thorough analysis of Sections 9B and 45(4) of the Act shed light on various critical aspects, offering valuable insights into their implications. The session provided clarity on the technical intricacies of these provisions and highlights their significance in taxation.

8. RRR – Read, Remember, Renew Yourself held on Saturday, 6th April, 2024 @BCAS

The Human Resources Development Committee organised a Workshop on the topic “RRR – Read Remember Renew Yourself” on 6th April, 2024, which was attended by 36 participants.

Faculty Mr. Pavan Bhattad, taught the techniques of reading and remembering.

The key takeaways from the workshop are given below:

  1.  Hardly one percent people read. If you are in those 1 per cent, it is a great thing.
  2.  Taking a book and going through it is not reading. You should be able to filter what is useful and implement the knowledge you get from the book.
  3.  Through reading we get ready knowledge gained by writers who write in various publications based on their reading, experience, research, experiments, etc. Reading gives you opportunity to grow beyond these writers. For every challenge, aspiration, goal in life there is a book for it.
  4.  Reading purposefully helps us to renew ourselves through implementing the learning from reading.
  5.  Techniques to remember what we read.
  6.  Faster we read the better we understand, still sometimes we are told to read slowly and carefully because it is important. This makes us infer that we have to read slowly, else we will not understand. Faster we read we get the gist.

9. Suburban Study Circle Meeting on “Case Studies – Interplay Between Income Tax and GST” by CA Gaurav Save and CA Kinjal Bhuta as Group Leaders in two sessions was held on 31st January and 19th March, 2024 at c/o Bathiya & Associates LLP, Andheri (E), which was attended by 10 participants.

The Group Leaders prepared very interesting case-studies through which group had very insightful discussions. They shared their views on the following:

  •  Justification of addition under section 69A.
  •  GST liability on transfer of tenancy right.
  •  Defense strategies for reassessment cases.
  •  Defense against GST mismatch notices, especially regarding NGTP credits.
  •  Inclusion of GST turnover in gross receipts calculation.
  • Applicability of sections 44AD or 44ADA for taxation.
  •  Audit requirement under section 44AB considering practice income and F&O losses.
  •  Availability of GST records to income tax authorities and AO’s access during assessments, etc.

The session was thought-provoking, grounded in real-world application, and comprehensively addressed various perspectives, with plentiful examples drawn from both practical experience and logical reasoning. This approach greatly enhanced the group’s comprehension and engagement with the subject matter.

The session saw lively engagement from the participants, with numerous questions raised and effectively addressed by the group leaders. The interactive nature of the discussion enriched the experience for everyone involved.

10. Half day Seminar on Restructuring of Family Owned Businesses (BCAS jointly with IMC & CTC) held on Friday, 15th March, 2024 @IMC.

First Session: Family-owned Business –Succession / Estate planning (Live case studies) – Including to cover conversion from firm / LLP / Companies – Private Trust etc.

Taxation Committee organised a Half Day Seminar on Restructuring of Family owned businesses at Walchand Hirachand Hall in a hybrid mode.

There was an introduction given by the representatives from all the three organisations.

Moderator CA Anil Sathe started the proceedings after the brief introduction of the panelists. All the three panelists touched upon the brief aspects of the need for restructuring in the family-owned businesses.

CA Sweta Shah explained the various scenarios which the family-owned business groups faces while restructuring for different reasons. She highlighted the reasons beyond tax for such restructurings involving Estate and Succession Planning.

CA Amrish Shah touched upon tax nuances and also the popular structures most organisations adopt in Estate and Succession Planning. Trust as a vehicle was also discussed in detail.

CA Anup Shah explained some of the finer aspects involving corporate and other allied laws. He also explained the situations in case of foreign assets and cross-border issues under FEMA and tax. He also answered queries on HUF and its partition.

Second Session: Restructuring of Businesses – including getting ready for IPO and fund-raising and for that purpose undertaking Merger / Demerger, Slump Sale to carve out core business vs Investments vs separating Brands / Patents, etc. (live Case Studies) In the second session, there were six different case studies which were discussed by the eminent panelists.

All three panelists CA Ketan Dalal, CA Pranav Sayta, and CA Girish Vanvari were very candid in their views on the case studies which involved some real life cases.

They also explained the issues which one can face in case of mergers and demergers without any substantial reason except tax benefit. GAAR and its implications were discussed in detail.

They also emphasised the need for simple structures and avoid complex ones as they can be litigation prone. There was also a couple of case studies which dealt with cross border mergers and demergers. They explained the implications of reverse mergers and issues arising from them.

Last Session: Family Governance and need for family constitution- Impact on private vs public companies – Binding nature – can it over-ride AOA etc.

Last session was by CA Dinesh Kanabar on the various aspects of Governance of family owned businesses. His presentation was very lucid and covered most of the aspects regarding governance of family owned businesses.

He explained through various examples of both private and public companies the importance of the family constitution and the group abiding by the same.

The entire half-day seminar was well received by both physical and virtual participants. There was an overwhelming response of 200-plus registrations for the same.

This session was chaired by CA Rajan Vora.

11. Full Day Workshop on Bank Audit held on Friday, 15th March, 2024 @BCAS, attended by 52 participants.

(Jointly organised by the Accounting & Auditing & Seminar Committee)

  •  A full-day workshop was conducted to appreciate the intricacies of Central Statutory Audit and how one should approach the same.
  •  There were five sessions concluding with a Panel Discussion.
  •  The first session topic was How to Prepare for a Bank Audit which highlighted key points in audit planning, do’s & don’ts and important reference material.
  •  The second session was on Embracing Digital Transformation in Bank Audits” which highlighted the journey of auditing in digitalised environment.
  •  The third session was on “Verification of Advances” in which critical aspects such as IRAC norms were discussed while auditing bank’s advances.
  •  The fourth session was on “Finalization, Reporting and Practical Challenges for audit for FY 2023-2024“ wherein all critical points and practical challengesfaced by auditors while closing FY24 audits were discussed.
  •  The last session was on “Frauds reporting including NFRA responsibilities” wherein various reporting responsibilities were discussed.
  •  The panel discussion was conducted around changing role of bank audit and expectations from auditors.

Speakers: CA Sandeep Welling, CA Ashutosh Pednekar, CA Vipul Choksi, CA Manish Sampat, CA Priyanka Palav, CA Sushrut Chitale, CA Mukund Chitale, CA Jayant Gokhale, CA Ketan Vikamsey.

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