ACA Journal Nov-17

Allied Laws Corner

Crore during the raid conducted by the 294 and State of Maharashtra v.Vishwanath
Income Tax Department on 6/8 October, Maranna Shetty, [2012] 10 SCC 561 dealt
2016 in his office and residential with an analogous provision in the
premises. No reliable and credible Maharashtra Control of Organised Crime
documents were forthcoming from the Act, 1999. It has been expounded that the
appellant about the source from where Court at the stage of considering the
he had obtained such a huge quantity application for grant of bail, shall consider
of cash. The possibility of the same being the question from the angle as to whether
proceeds of crime cannot be ruled out. the accused was possessed of the requisite
Hence, it noted that the question of mens rea. The Court is not required to
granting bail did not arise, taking into record a positive finding that the accused
consideration the serious allegations had not committed an offence under theAct.
against the appellant and other facts The Court ought to maintain a delicate
including severity of the punishment balance between a judgment of acquittal
prescribed by law. Accordingly, the bail and conviction and an order granting bail
application of the appellant came to be much before commencement of trial. The
rejected.As a consequence, the pending duty of the Court at this stage is not to
application which was considered along weigh the evidence meticulously but to
with the bail application was also arrive at a finding on the basis of broad
disposed of by the impugned judgment probabilities.
and order dated 5th May, 2017 passed
by the High Court. 3. It is not necessary to multiply the authorities
on the sweep of Section 45 of the Act of
D. Findings of the Supreme Court : 2002 which, as aforementioned, is no more
res integra. The decision in the case of
1. The consistent view taken by this Court Ranjitsing Brahmajeetsing Sharma v. State
is that economic offences having deep- of Maharashtra and Anr., [2005] 5 SCC
rooted conspiracies and involving huge 294 and State of Maharashtra v.Vishwanath
loss of public funds need to be viewed Maranna Shetty, [2012] 10 SCC 561 dealt
seriously and considered as grave offences with an analogous provision in the
affecting the economy of the country as a Maharashtra Control of Organised Crime
whole and thereby posing serious threat Act, 1999. It has been expounded that the
to the financial health of the country. Court at the stage of considering the
Further, when attempt is made to project application for grant of bail, shall consider
the proceeds of crime as untainted money the question from the angle as to whether
and also that the allegations may not the accused was possessed of the requisite
ultimately be established, but having been mens rea. The Court is not required to
made, the burden of proof that the monies record a positive finding that the accused
were not the proceeds of crime and were had not committed an offence under theAct.
not, therefore, tainted shifts on the accused The Court ought to maintain a delicate
persons under Section 24 of the Act of balance between a judgment of acquittal
2002. and conviction and an order granting bail
much before commencement of trial. The
2. It is not necessary to multiply the authorities duty of the Court at this stage is not to
on the sweep of Section 45 of the Act of weigh the evidence meticulously but to
2002 which, as aforementioned, is no more arrive at a finding on the basis of broad
res integra. The decision in the case of probabilities. Further, the Court is required
Ranjitsing Brahmajeetsing Sharma v. State
of Maharashtra and Anr., [2005] 5 SCC

Ahmedabad Chartered Accountants Journal November, 2017 441

Allied Laws Corner

to record a finding as to the possibility of 46. The duty of the court at this stage is not to
the accused committing a crime which is weigh the evidence meticulously but to
an offence under the Act after grant of bail. arrive at a finding on the basis of broad
In Ranjitsing Brahmajeetsing Sharma probabilities. However, while dealing with
(supra), in paragraphs 44 to 46 of the said a special statute like MCOCA having
decision, this Court observed thus: regard to the provisions contained in Sub-
section (4) of Section 21 of the Act, the
“44. The wording of Section 21(4), in our Court may have to probe into the matter
opinion, does not lead to the conclusion deeper so as to enable it to arrive at a
that the Court must arrive at a positive finding that the materials collected against
finding that the applicant for bail has not the accused during the investigation may
committed an offence under the Act. If such not justify a judgment of conviction. The
a construction is placed, the court intending findings recorded by the Court while
to grant bail must arrive at a finding that granting or refusing bail undoubtedly
the applicant has not committed such an would be tentative in nature, which may
offence. In such an event, it will be not have any bearing on the merit of the
impossible for the prosecution to obtain a case and the trial court would, thus, be
judgment of conviction of the applicant. free to decide the case on the basis of
Such cannot be the intention of the evidence adduced at the trial, without in
Legislature. Section 21(4) of MCOCA, any manner being prejudiced thereby.”
therefore, must be construed reasonably. It
must be so construed that the Court is able 4. Reverting to the decision in the case of
to maintain a delicate balance between a Manoranjana Sinh v. Central Bureau of
judgment of acquittal and conviction and Investigation [2017] 5 SCC 218 , the
an order granting bail much before Supreme Court held that the same is on the
commencement of trial. Similarly, the facts of that case. Even in the said decision,
Court will be required to record a finding the Court has noted that the grant or denial
as to the possibility of his committing a of bail is regulated to a large extent by the
crime after grant of bail. However, such facts and circumstances of each case. In the
an offence in futuro must be an offence case of Sanjay Chandra v. Central Bureau
under the Act and not any other offence. of Investigation [2012] 1 SCC 40, the Court
Since it is difficult to predict the future was not called upon to consider the efficacy
conduct of an accused, the court must of Section 45 of the Act of 2002 which is a
necessarily consider this aspect of the special enactment.
matter having regard to the antecedents of
the accused, his propensities and the nature 5. Keeping in mind the dictum in the aforesaid
and manner in which he is alleged to have decisions, the Apex Court held that “we
committed the offence. find no difficulty in upholding the opinion
recorded by the Sessions Court as well as
45. It is, furthermore, trite that for the purpose the High Court in this regard. In our
of considering an application for grant of opinion, both the Courts have carefully
bail, although detailed reasons are not analysed the allegations and the materials
necessary to be assigned, the order on record indicating the complicity of the
granting bail must demonstrate appellant in the commission of crime
application of mind at least in serious punishable under Section 3/4 of the Act of
cases as to why the applicant has been 2002. The Courts have maintained the
granted or denied the privilege of bail. delicate balance between the judgment of
acquittal and conviction and order granting

442 Ahmedabad Chartered Accountants Journal Novemer, 2017

Allied Laws Corner

bail before commencement of trial. The years”, the words “which may extend to
material on record does not commend us ten years” had been substituted.”
to take a contrary view”.
7. As the fulcrum of Section 3 quoted above,
6. Realizing this position, the learned counsel is expression ‘proceeds of crime’, the
appearing for the appellant would contend dictionary clause in the form of Section
that even if the allegations against the 2(1)(u) is of some relevance. The same
appellant are taken at its face value, the reads thus:
incriminating material recovered from the
appellant or referred to in the complaint, “2(1)(u) ‘proceeds of crime’ means any
by no stretch of imagination, would take property derived or obtained, directly or
the colour of proceeds of crime. In fact, indirectly, by any person as a result of
there is no allegation in the charge-sheet criminal activity relating to a scheduled
filed in the scheduled offence case or in offence or the value of any such property
the prosecution complaint that the or where such property is taken or held
unaccounted cash deposited by the outside the country, then the property
appellant is as a result of criminal activity. equivalent in value held within the
Absent this basic ingredient, the property country;”
derived or obtained by the appellant
would not become proceeds of crime. To It will be useful to advert to the meaning
examine this contention, it would be of expression “property” as predicated in
useful to advert to Sections 3 and 4 of the Section 2(1)(v). The same reads thus:
Act of 2002. The same read thus:
“2(1)(v) “property” means any property
“3. Offence of money-laundering.- or assets of every description, whether
Whosoever directly or indirectly attempts corporeal or incorporeal, movable or
to indulge or knowingly assists or immovable, tangible or intangible and
knowingly is a party or is actually involved includes deeds and instruments evidencing
in any process or activity connected title to, or interest in, such property or
proceeds of crime including its assets, wherever located;
concealment, possession, acquisition or
use and projecting or claiming it as The expression ‘scheduled offence’ has
untainted property shall be guilty of been defined in Section 2(1)(y) of the Act
offence of money-laundering. of 2002. The same reads thus:

4. Punishment for money-laundering.- “2(1)(y) ‘scheduled offence’means-
Whoever commits the offence of money-
laundering shall be punishable with (i) the offences specified under Part A of
rigorous imprisonment for a term which the Schedule; or
shall not be less than three years but which
may extend to seven years and shall also (ii) the offences specified under Part B of
be liable to fine. the Schedule if the total value involved
in such offences is one crore rupees
Provided that where the proceeds of crime or more; or
involved in money-laundering relates to
any offence specified under paragraph 2 (iii) the offences specified under Part C of
of Part A of the Schedule, the provisions the Schedule;”
of this section shall have effect as if for
the words “which may extend to seven 8. Indisputably, the predicate offence is
included in Part A in paragraph 1 of the
Schedule in the Act of 2002, in particular
Sections 420, 467, 471 and 120B of IPC.
Indeed, the expression “criminal activity”

Ahmedabad Chartered Accountants Journal November, 2017 443

Allied Laws Corner

has not been defined. By its very nature appellant should be in a position to persuade
the alleged activities of the accused the Court that the allegations in the
referred to in the predicate offence are complaint and the materials on record taken
criminal activities. The possession of at its face value do not constitute the
demonetized currency in one sense, offence under Section 3 read with the
ostensibly, may appear to be only a facet schedule of the Act of 2002 as in force.
of unaccounted money in reference to the
provisions of the Income Tax Act or other 10. It has been brought to our notice that the
taxation laws. However, the stated activity decision in Gorav Kathuria (supra) was
allegedly indulged into by the accused challenged before this Court by way of
named in the commission of predicate Criminal Appeal No.737 of 2016, which
offence is replete with mens rea. In that, has already been dismissed on 12th
the concealment, possession, acquisition August, 2016. The order originally passed
or use of the property by projecting or on the said criminal appeal reads thus:
claiming it as untainted property and
converting the same by bank drafts, would “Though the High Court has granted
certainly come within the sweep of certificate to appeal, after arguing the
criminal activity relating to a scheduled matter for some time, learned counsel for
offence. That would come within the the petitioner concedes that the impugned
meaning of Section 3 and punishable judgment of the High Court is correct.
under Section 4 of the Act, being a case
of money-laundering. The expression This appeal is, accordingly, dismissed.”
‘money-laundering’is defined thus:
11. However, that order has been subsequently
“2(1)(p) “money-laundering” has the revised which reads thus:
meaning assigned to it in section 3;
“Though the High Court has granted
9. The appellant then relies upon the decision certificate to appeal, we have heard the
in the case of Gorav Kathuria v. Union of learned counsel for some time and are of
India, (2016 SCC Online P & H 3428 of the opinion that the impugned judgment
the Punjab and Haryana High Court which of the High Court is correct.
has taken the view that Section 45(1) of
the Act of 2002 requires to be read down This appeal is, accordingly, dismissed.”
to apply only to those scheduled offences
which were included prior to the 12. At the same time the respondents have
amendment in 2013 in the Schedule. It is drawn our attention to a chart contained
contended that the offence, in particular, in their written submissions pointing out
under Sections 420, 467 and 471 of IPC, that other High Courts have disagreed
may not be treated as having been included with the principle expounded in Gorav
in the scheduled offences for the purpose Kathuria’s case. The said chart reads thus:
of the Act of 2002. Further, if any other
view was to be taken, the provision would (i) Crl. Misc. Application (for Regular
be rendered ultra vires.We are in agreement Bail) No.7970/17 Jignesh
with the stand taken by the respondents that Kishorebhai Bajiawala v. Stateof
the appellant cannot be permitted to raise Gujarat & Ors.Manu/GJ/1035/20 17
the grounds urged in the writ petition, High Court of Gujarat
hearing whereof has been deferred on the
request of the appellant. In other words, the (ii) Crl. Petition No.366/2017 SC
Jayachandra v. Enforcement
Directorate, Bangalore 2017 (349)
ELT 392 KAR High Court of
Karnataka at Bengaluru

444 Ahmedabad Chartered Accountants Journal Novemer, 2017

Allied Laws Corner

(iii) WP[Crl.] No.333 of 2015 Kishin S. by the Delhi High Court. These statements
Loungani v.. UOI & ors.[2017] 1 are admissible in evidence, in view of
KHC 355 High Court of Kerala at Section 50 of the Act of 2002. The same
Ernakulam makes out a formidable case about the
involvement of the appellant in commission
(iv) Crl. Mic. Application (for Regular of a serious offence of money-laundering.
Bail) No.30674/16 Pradeep It is, therefore, not possible for us to record
Nirankarnath Sharma vs Directorate satisfaction that there are reasonable
of Enforcement 2017 (350) ELT 449 grounds for believing that the appellant is
(GUJ) High Court Gujarat at not guilty of such offence. Further, the
Ahmedabad Courts below have justly adverted to the
antecedents of the appellant for considering
(v) Crl. Writ Petition No.3931/2016 the prayer for bail and concluded that it is
Chhagan Chandrakant Bhujbal v. not possible to hold that the appellant is not
Union of India & Ors.2016 SCC likely to commit any offence ascribable to
Online Bom 9983 High Court of the Act of 2002 while on bail. Since the
Bombay threshold stipulation predicated in Section
45 has not been overcome, the question of
13. For the time being, it is not necessary for considering the efficacy of other points
us to examine the issues arising from the urged by the appellant to persuade the Court
decision of the Punjab and Haryana High to favour the appellant with the relief of
Court or the rejection of criminal appeal regular bail will be of no avail. In other
by this Court against that decision. The words, the fact that the investigation in the
constitutional validity of Section 45 of the predicate offence instituted in terms of FIR
Act of 2002 will have to be examined by No.205/2016 or that the investigation qua
this Court in the writ petition on its own the appellant in the complaint CC No.700/
merits. The summary dismissal of criminal 2017 is completed; and that the proceeds
appeal will not come in the way of of crime is already in possession of the
considering the correctness of the decision investigating agency and provisional
of the Punjab and Haryana High Court in attachment order in relation thereto passed
view of the conflict of opinion with the on 13th February, 2017 has been
other High Courts. confirmed; or that charge-sheet has been
filed in FIR No.205/2016 against the
14. Suffice it to observe that the appellant has appellant without his arrest; that the
not succeeded in persuading us about the appellant has been lodged in judicial
inapplicability of the threshold stipulation custody since 2nd January, 2017 and has
under Section 45 of the Act. In the facts of not been interrogated or examined by the
the present case, we are in agreement with Enforcement Directorate thereafter; all these
the view taken by the Sessions Court and will be of no consequence.
by the High Court. We have independently
examined the materials relied upon by the 15. It was urged on behalf of the appellant
prosecution and also noted the inexplicable that Demonetization Notification dated
silence or reluctance of the appellant in 8th November, 2016 imposes no limit
disclosing the source from where such in KYC compliant accounts on the
huge value of demonetized currency and quantum of deposit and no restrictions
also new currency has been acquired by on non-cash transactions. The relevant
him. The prosecution is relying on portion of the said notification reads
statements of witnesses/accused already thus:
recorded, out of which 7 were considered

Ahmedabad Chartered Accountants Journal November, 2017 445

Allied Laws Corner which grants immunity to the appellant
from prosecution for an offence of
“(iii) there shall not be any limit on the money-laundering. In other words, the
quantity or value of specified bank property derived or obtained by the
notes to be credited to the account appellant was the result of criminal
maintained with the bank by a activity relating to a scheduled offence.
person, where the specified bank The argument of the appellant that there
notes are tendered; however, where is no allegation in the charge-sheet filed
compliance with extant Know Your in the scheduled offence case or in the
Customer (KYC) norms is not prosecution complaint that the
complete in an account, the unaccounted cash deposited by the
maximum value of specified bank appellant is the result of criminal activity,
notes as may be deposited shall be will not come to the aid of the appellant.
Rs. 50,000/-; That will have to be negatived in light of
the materials already on record. The
(vii) there shall be no restriction on the possession of such huge quantum of
use of any non-cash method of demonetized currency and new
operating the account of a person currency in the form of Rs.2000/- notes,
including cheques, demand drafts, without disclosing the source from
credit or debit cards, mobile wallets where it is received and the purpose for
and electronic fund transfer which it is received, the appellant has
mechanisms or the like;” failed to dispel the legal presumption that
he was involved in money-laundering
16. We fail to understand as to how this and the property was proceeds of crime.
argument can be countenanced. The fact
that no limit for deposit was specified, 17. Taking overall view of the matter, therefore,
would not extricate the appellant from we are not inclined to interfere with the well
explaining the source from where such considered opinion of the Sessions Court and
huge amount has been acquired, the High Court rejecting the prayer for grant
possessed or used by him. The volume of regular bail to the appellant. However,
of demonetized currency recovered from considering the fact that the appellant is in
the office and residential premises of the custody since 28th December, 2016 and the
appellant, including the bank drafts in offence is punishable with imprisonment for
favour of fictitious persons and also the a term extending to seven years only, but not
new currency notes for huge amount, less than three years, the Trial Court will be
leave no manner of doubt that it was the well advised to proceed with the trial on day-
outcome of some process or activity to-day basis expeditiously. We clarify that the
connected with the proceeds of crime Trial Court must examine the evidence/
projecting the property as untainted material brought on record during the trial
property. No explanation has been on its own merit and not be influenced by
offered by the appellant to dispel the the observations in this decision which are
legal presumption of the property being limited for considering the prayer for grant
proceeds of crime. Similarly, the fact that of regular bail.
the appellant has made declaration in
the Income Tax Returns and paid tax hhh
as per law does not extricate the
appellant from disclosing the source of
its receipt. No provision in the taxation
laws has been brought to our notice

446 Ahmedabad Chartered Accountants Journal Novemer, 2017

From Published Accounts

Accounting Standard 22 – Taxes on Income Tax CA. Pamil H. Shah
Annual Report 2016-17 [email protected]

Advanced Enzyme Technologies Ltd deferred tax assets can be realized against future
taxable profits.
I. Income Tax
At each balance sheet date the company re-
Income tax expense comprises current tax (i.e. assesses unrecognized deferred tax assets. It
amount of tax for the period determined in recognizes unrecognized deferred tax assets to
accordance with the income tax law), deferred the extent that it has become reasonably certain
tax charge or credit (reflecting the effects or or virtually certain, as the case may be that
timing differences between accounting income sufficient future taxable income will be
and taxable income for the period) and available against which such deferred tax assets
Minimum Alternate Tax (MAT) credit can be realized.
entitlement.
Minimum Alternate Tax
Current Tax
Minimum Alternate Tax (MAT) under the
Current tax is computed and provided for in provision of Income Tax Act, 1961 is
accordance with the applicable provisions of recognised as current tax in the Statement of
the Income Tax Act, 1961. Profit and Loss. The credit available under the
Act, in respect of MAT paid is recognised as
Deferred tax an asset only when and to the extent there is
convincing evidence that the company will pay
Deferred tax is recognized on timing normal income tax during the period for which
differences, being the difference between the the MAT credit can be carried forward for set
taxable income and the accounting income that off against the normal tax liability. MAT Credit
originate in one period and are capable of recognised as an asset is reviewed at each
reversal in one or more subsequent periods. balance sheet date and written down to the
Deferred tax is measured based on the tax rates extent the aforesaid convincing evidence no
and the tax law enacted or substantively enacted longer exists.
at the balance sheet date. Deferred tax assets
are recognized only to the extent that there is a Claris Lifesciences Ltd.
reasonable certainty that sufficient future
taxable income will be available against which Current Tax
such deferred tax assets can be realized. If the
Company has unabsorbed depreciation or carry Current income tax assets and liabilities are
forward tax losses, differed tax assets are measured at the amount expected to be recovered
recognized only if there is a virtual certainty from or paid to the taxation authorities. The tax rate
supported by convincing evidence that such and tax laws used to compute the amount are those
that are enacted or substantively enacted, at the
reporting date.

Ahmedabad Chartered Accountants Journal November, 2017 447

From Published Accounts recognizes tax credits as an asset, the said asset is
created by way of tax credit to the statement of profit
Current income tax relating to items recognised in and loss. The company reviews such tax credit asset
correlation to the underlying transaction either in at each reporting date and writes down the asset to
OCI or directly in equity. The management the extent the company does not have convincing
periodically evaluates positions taken in the tax evidence that it will pay normal tax during the
returns with respect to situations in which applicable specified periods. Deferred tax includes mat tax
tax regulations are subject to interpretation and credit.
establishes provisions where appropriate.
The carrying amount of deferred tax assets is
Deferred taxes reviewed at each reporting date and reduced to the
extent that is no longer probable that sufficient
Deferred tax is provided using the balance sheet taxable profit will be available to allow all or part
method on temporary differences between the tax of the deferred tax asset to be utilized. Unrecognised
bases of assets and liabilities and their carrying deferred tax assets are reassessed at each reporting
amounts for financial reporting purposes at the date and are recognised to the extent that it has
reporting date. become probable that future taxable profit will be
allow the deferred tax asset to be recovered.
Deferred tax liabilities are recognised for all taxable
temporary differences except when the deferred tax Deferred tax assets and liabilities are measured at
liability arises from the initial recognition of the tax rates that are expected to apply in the year
goodwill or an asset or liability in a transaction that when the asset is realized or the liability is settled,
is not a business combination and at the time of the based on tax rates (and tax laws) that have been
transaction, affects neither the accounting profit nor enacted or substantively enacted at the reporting
taxable profit or loss. date.

Deferred tax assets are recognised for all deductible Deferred tax relating to items recognized outside
temporary differences, the carry forward of unused profit or loss is recognized outside profit or loss
tax credit and any unused tax losses. Deferred tax (either in other comprehensive income or in equity).
assets are recognised to the extent that it is probable Deferred tax items are recognized in correlation to
that taxable profit will be available against which the underlying transaction either in OCI or directly
the deductible temporary differences, and the carry in equity.
forward of unused tax credits and unused tax losses
can be utilised, expect when the deferred tax assets Deferred tax assets and deferred tax liabilities are
relating to the deductible temporary deference arises offset, if a legally enforceable right exists to set-off
from the initial recognition of an asset or liability in current tax assets against current tax liabilities and
a transaction that s not a business combination and, the deferred taxes relate to the same taxable entity
at the time of the transaction, affects neither the and the same taxation authority.
accounting profit nor taxable profit or loss.
Prestige Estates Projects Ltd
The company recognizes tax credits in the nature
of MAT credit as an asset only to the extent that 2.10 Income Taxes
there is convincing evidence that the company will
pay normal income tax during the specified period, Income tax expense represents the sum of the
i.e., the period for which tax credit is allowed to be tax currently payable and deferred tax.
carried forward. In the year in which the company

448 Ahmedabad Chartered Accountants Journal Novemer, 2017

a. Current Tax From Published Accounts

Current tax assets and liabilities are subsequently enacted by the end of the
measured at the amount expected to be reporting period and are expected to apply
recovered from or paid to the taxation when the related deferred tax asset is
authorities. The tax rate and tax laws used realized or the deferred tax liability is
to compute the amount are those that are settled.
enacted or substantively enacted, at the
reporting date. Current tax relating to items Deferred tax assets are recognized for all
recognised outside statement of profit and deductible temporary differences and
loss is recognised outside statement of unused tax losses only if it is probable that
profit and loss (either in other future taxable amounts will be available to
comprehensive income or in equity). utilize those temporary differences and
Current tax items are recognised in losses.
correlation to the underlying transaction
either in OCI or directly in equity. Deferred tax assets and liabilities are offset
when there is a legally enforceable right to
b. Deferred Tax offset when the deferred tax balances relate
to the same taxation authority. Current tax
Deferred tax recognized on temporary assets and tax liabilities are offset where
differences arising between the tax bases the entity has a legally enforceable right to
of assets and liabilities and their carrying offset and intends either to settle on a net
amounts in the financial Statement. basis, or to realise the asset and settle the
However, deferred tax liabilities are not liability simultaneously.
recognized if they arise from the initial
recognition of goodwill. Current tax and deferred tax is recognised
in statement of profit and loss, except to
Deferred tax is also not accounted for if it the extent that it relates to items recognised
arises from initial recognition of an asset in other comprehensive income or directly
or liability in a transaction other then a in equity. In this case, the tax is also
business combination that at the time of the recognised in other comprehensive income
transaction affects neither the accounting or directly in equity, respectively.
profit nor taxable profit(tax loss).
hhh
Deferred tax is determined using tax rates
(and Laws) that have been enacted or

Ahmedabad Chartered Accountants Journal November, 2017 449

From the Government

Income Tax CA. Kunal A. Shah
[email protected]
1. Clarification on Cash sale of agricultural
produce by cultivators/agriculturist in respect of transactions relating to an event
or occasion from a person. Therefore, any cash
In this context, it is stated that the provisions of sale of an amount of Rs. 2 lakh or more by a
section 40A (3) of the Income-tax Act, 1961 cultivator of agricultural produce is prohibited
(‘the Act’) provides for the disallowances of under section 269ST of the Act.
expenditure exceeding Rs. 10000 made
otherwise than by an account payee cheque/ 4. Further also the provisions relating to quoting
draft or use of electronic clearing system of PAN or furnishing of Form No.60 under
through a bank account. However, rule 6DD rule 114B of the IT Rules do not apply to the
of the Income-tax Rules, 1962 (‘IT Rules’) sale transaction of Rs. 2 Lakh or less.
carves out certain exceptions from application
of the provisions of section 40A (3) in some 5. In view of the. above, it is clarified that cash
specific cases and circumstances, which inter sale of the agricultural produce by its cultivator
alia include payments made for purchase of to the trader for an amount less than Rs 2 Lakh
agricultural produce to the cultivators of such will not:-
produce. Therefore, no disallowance under
section 40A (3) of the Act can be made if the a) result in any disallowance of expenditure
trader makes cash purchases of agricultural under section 40A (3) of the Act in the case
produce from the cultivator. of trader.

3. Further, section 269ST, subject to certain b) attract prohibition under section 269ST of
exceptions, prohibits receipt of Rs. 2 lakh or the Act in the case of the cultivator; and
more otherwise than by an account payee
cheque/draft or by use of electronic clearing c) require the cultivator to quote his PAN/ or
system through a bank account from a person furnish Form No.60.
in a day or in respect of a single transaction or
(Circular No. 27/2017, dated 03/11/2017)

hhh

450 Ahmedabad Chartered Accountants Journal Novemer, 2017

Association News

CA. Riken J. Patel CA. Maulik S. Desai
Hon. Secretary Hon. Secretary

1 Forthcoming Programmes Programmes Venue
Date/Day Time
Sardar Patel Stadium,
30.12.2017 8.30 a.m. Cricket Match - CA Association Vs. Navrangpura, Ahmedabad
Onwards IT Bar Association
M.S. University
21.01.2018 9.00 a.m. Cricket Match - CA Association Vs. Ground at Baroda
Onwards Baroda Branch of WIRC of ICAI

Glimpses of Past Events

15.12.2017 – CAA Foundation Day Celebration with Walkathon

15.12.2017 - Lecture meeting on “Current Issues in GST and Latest Judicial Decisions under Income
Tax” organised by Memorial Lecture (Late Shri K T Thakor& C F Patel) Committee

25.11.2017 – Cricket Match with Rajkot Branch of WIRC of ICAI – AT Rajkot 451
Ahmedabad Chartered Accountants Journal November, 2017

ACAJ Crossword Contest # 43

Across Down
1. All taxpayers would file return in FORM 4. We are a beautiful _____________ of words,

GSTR-3B along with payment of tax by 20th flesh, thoughts, blood, and energy, but it does
of the succeeding month till _________ 2018. not entirely belong to us.
2. Failure comes only when we forget our ideals 5. ___________ means any treatment or process
and objectives and ______. undertaken by a person on goods belonging to
3. The term Intellectual property was initially another registered person.
termed as ____________ property under the 6. The action of reopening of assessment can be
Paris Convention. resorted to by the Assessing Officer only if he
has __________ material at his command.

14

2

6
5

3

Notes:

1. The Crossword puzzle is based on previous Winners of ACAJ Crossword Contest # 42
issue of ACA Journal. 1. CA. Mohan Akalkotkar
2. CA. Bhadresh Mehta
2. Two lucky winners on the basis of a draw will
be awarded prizes.

3. The contest is open only for the members of ACAJ Crossword Contest # 42 - Solution
Chartered Accountants Association and no
member is allowed to submit more than one Across 2. Purusartha
entry. 1. Supply
3. One
4. Members may submit their reply either
physically at the office of the Association or Down 5. Corpus
by email at [email protected] on or 4. Speculative
before 01/01/2018. 6. Ratnamani

5. The decision of Journal Committee shall be final
and binding.

hhh

452 Ahmedabad Chartered Accountants Journal Novemer, 2017