CAduniya.com : CA India Blog

MUMBAI: Equity benchmarks closed flat on Thursday in a choppy trade as investors hesitated to buy at higher levels ahead of the extended weekend. 
The market will stay closed on Friday on account of Gandhi Jayanti.

On Thursday, the 30-share Sensex, which breached the 17000-point mark on Wednesday, added over 7 points to close at 17134.55 points. The 50-share Nifty tested the crucial 5100-point level, but settled lower to close at 5083.40, up 0.55 points. In the broader market, declining shares outnumbered advancing shares in the ratio 1663:1123 on BSE.

“There is not really too much left in terms of the pure recovery trade because valuations have surged almost 100% and the upgrade to earnings has been marginal,” said Vetri Subramaniam, head — equity funds at Religare Mutual Fund.

“I think there is perhaps a little bit of upside surprise to come through on these but even if you factor that in, that markets are really trading close to almost around 19 times FY10 earnings and that really does not leave you with too much room for comfort in terms of valuations,” he added.

According to technical analysts, if Nifty manages to break 5100 on good volumes next week, the index could surge to 5200 levels. As per NSE provisional figures, foreign portfolio investors were net buyers of shares worth Rs 976 crore. Domestic institutions net sold shares worth Rs 332 crore.  source - ET
 

The circular no 5 dated 26-07-2007 states the following:

” The report of audit under section 44AB is not to be attached with the return. It should not be furnished separately also before or after the due date. However, an assessee should get the report of audit from an accountant under said section before the due date of the furnishing of the return and should fill out the relevant columns of these forms on the basis of such report. The assessee should retain the report with himself. It may be furnished in original during the assessment proceedings. No penalty under section 271B shall be initiated or levied for not furnishing the tax audit report on or before the due date. However, if the audit report has not been obtained before the due date, provisions of section 271B shall be attracted. ”

It is very much evident that the circular lays down in an Unequivocal manner that  the assesses should fill out the relevant columns of these forms on the basis of audit report and No penalty under section 271B shall be initiated or levied for not furnishing the tax audit report

The non penalty clause can’t be interpreted in isolation of the preceding lines. One can not segment it to suit to one’s convenience.

In my opinion, “filling the out the relevant columns of ITRs on the basis of Audit Report” is ‘furnishing” of Audit report as envisaged under section 44AB and 271B.

If for any reason ITR can’t be filed before 3oth September, I strongly recommend that the assessee should fill out only Tax Audit Part (i.e., Part A-OI) in applicable ITR and file it (just like the ITR either manually or electronically as the case may be ) by due date (i. e. 30-09-2009). No doubt, it will require a revision of the ITR later (with all of its drawbacks) . However To me this seems the only pragmatic solution.

Please note that audit report is not required to be filed in paper form whatsoever.

The rate of CST at present is 4% against C-form. Though it is a Central Sales Tax, the Central government does not get any revenue and is totally a revenue receipt of the selling State. The CST at present contributes a substantial amount exchequer to the States and is deep rooted in the tax structure. Also, we have an unbalanced state wise economy in which some states have considerable revenue from CST but majority are consumer states. It was for all such reasons that CST is continued in the VAT regime.  

The Government has proposed to reduce CST to 2% in 2006 and ultimately abolish it in 2007. However, CST and VAT are not compatible. CST has not been made VATable. That is, CST paid cannot be claimed for credit under present VAT system.  

Today, all the business units needs to find a local sourcing of materials for a temporary period of two years, which would not be possible for many traders who have been dealing on inter-state purchases for the last several years. The additional tax burden have to be ultimately borne by the final consumer. Until CST is abolished, the main objective of VAT will be lost and will seriously undermine the benefits of VAT in rationalizing the supply chain management and removing distortions in inter-state movement of goods.