Saturday, April 16, 2011

Article on contempt of court

Contempt of Court: It is a charge which can be laid against someone for interrupting the process of justice in a court of law When contempt of court proved, can result in fines or imprisonment.Failure to respect the court directive will lead to contempt of court.

Section 2 of Contempts of Courts Act, 1971 defines contempt of court. There are two kinds of contempt of court. One is Civil nature and another is criminal nature.

Essentials
The elements generally needed to establish a contempt are:
1. the making of a valid court order,
2. knowledge of the order by respondent,
3. ability of the respondent to render compliance, and
4. wilful disobedience of the order.


Civil contempt means wilful disobedience to any judgment, decree, direction, order, writ or other process of a court or wilful breach of an undertaking given to a court.

Criminal contempt means the publication (whether by words, spoken or written, or by signs, or by visible representations, or otherwise)of any matter or the doing of any other act whatsoever which; scandalises, prejudices or interferes the administration of justice in any other manner. (For better clarification one has to refer the provisios of Section 2 of the Contempt of cours Act

For the concept of Contempt of Court, the Contempt of Court Act, 1971 was passed which dealt with such a concept. Article 129 and 215 of the Constitution of India empowers the Supreme Court and High Court respectively to punish people for their respective contempt. Section 10 of The Contempt of Courts Act of 1971 defines the power of the High Court to punish contempts of its subordinate courts. Power to punish for contempt of court under Articles 129 and 215 is not subject to Article 19(1)(a).

A case of contempt is C.K. Daphtary v. O.P. Gupta (1971 1 SCC 626), the respondent published and circulated a booklet in public purporting to ascribe bias and dishonesty to Justice Shah while acting in his judicial capacity. Mr C.K. Daphtary, along with others, filed a petition alleging that the booklet has scandalised the judges who participated in the decision and brought into contempt the authority of the highest court of the land and thus weakened the confidence of the people in it. The Supreme Court, in examining the scope of the contempt of court, laid down that the test in each case is whether the impugned publication is a mere defamatory attack on the judge or whether it will interfere with the due course of justice or the proper administration of law by the court.

Another contempt of court case posted in CNN IBN Live.com which was reproduced below:

New Delhi: Eighteen people including four top functionaries of the West Bengal government have been convicted for contempt of court after no action was taken to help resume work in the New Jalpaiguri district court.

The Calcutta High Court on Friday sentenced the Director General of Police, District Magistrate and Superintendent of Police of Jalpaiguri district to six months imprisonment for criminal contempt of court.

The three faced the court's ire along with 15 others for the "constitutional breakdown" in the district during an agitation demanding setting up of a circuit bench of the High Court there.

Court proceedings were stalled for almost a month due to the protest. The bench observed that even after its order, the officers did not act to remove obstructions and road blocks, which were dismantled by the protestors themselves.

After almost a month of inaction, the High Court took suo moto cognizance and convicted 18 people. However, the court has stayed the conviction for the next three weeks.

The court directed that apart from the six months' simple imprisonment, they would have to undergo another one month's imprisonment if they fail to pay a fine of Rs 2,000 each.

In a scathing indictment of the state police chief A B Vohra, the court observed that he had not cared to even monitor the situation in Jalpaiguri or ask his officers to restore normalcy despite specific directions to that effect by the High Court.

Observing that Vohra and the district police officers had committed the crime of letting the protestors hold the Constitution and fundamental rights of people to ransom for a month, the bench said that it was not expected for the police chief to say in his reply that no law and order problem was created as the agitation was peaceful.


Limitation for contempt of court: The Limitation period for actions of contempt has been discussed under Section 20 of the Contempt of Courts Act of 1971 and is a period of one year from the date on which the contempt is alleged to have been committed.


Legal Heirs

I have made an attempt to explore legal heirs status with respect to various act viz Transfer of Property Act, Employee Provident Fund Act, Income Tax Act, Wokmen Compensation Act, Motor vehicles Act, Insurance Act, Depositories Act , Companies Act and various other status. In this article series, i am going to highlight all the above acts as well as the status of legal heirs, how the legal heirs is different from nominees. For example Income taxAct, the following are the provisions.

Section 238 – IT Act:Person entitled to claim refund in certain special cases

As per Sub section (2) of Section 238 provides death, incapacity, insolvency, liquidation or other cause, a peson is unable to claim or receive any refund due to him, his legal representative or the trustee or guardian or receiver shall be entitled to claim or receive such refund for the benefit of such person or his estate.

Further Department circular No.22(LXXII-17) dated 8-8-1961 provides that when there is no dispute amongst the legal heirs, the refund due to estate of a deceased person should be paid to his son/widow or other legal heirs on their furnishing an indemnity bond,supported by the guarantee of one or two solvent sureties and without the production of succession certificates or letters of administration etc.

According to Webster Law dictiionary

1. a person who inherits or is legally entitled to inherit, through the natural action of the law, another's property or title upon the other's death

2. anyone who receives property of a deceased person either by will or by law

3. a person who appears to get some trait from, or carries on in the tradition of, a predecessor

If a person dies without writing a will , it is known as succession by “intestate”. The succession laws are different for different religions. The applicable laws of succession are as follows.

Without making a valid will ( Intestate)

Hindu Succession Act - For Hindu, Sikh, Jain and Buddhists

Indian Succession Act - For Christian Paris, Jew

Muslim law - for Muslim

After making a valid will ( Testate)

Indian Succession Act - Hindu, Sikh, Buddhist, Christian, Paris, Jew

Muslim Law Muslim

The Hindu Succession Act applies where a Hindu male or female dies without making a will and leaves behind property.

The Hindu Succession Act provides property of an intestate Hindu male devolves on the following orders

The property of an intestate Hindu male devolves on the following heirs in the order specified below.

A) Class I heirs

B) Class II heirs

C) Agnates

D) Cognates

a) The devolvement of property upon Hindu male to class I heirs : Class I heirs are Son, daughter, widow, mother, son of a pre-deceased son, daughter of a pre-deceased son, son of a pre-deceased daughter, daughter of a pre deceased daughter, widow of a pre-deceased son, son of a predeceased son of a predeceased son, daughter of a pre-deceased son of a pre deceased son, widow of a pre-deceased son of a pre-deceased son.

b) The devolvement of property upon Hind male will lies to Class II heirs if there is no Class I heirs:

a) Father

b) Son’s daughte’s son, daughter’s son’s daughter daughter’s daugher’son, Daughter’s Daughter’s daughter

c) Brother’s son, Sister’s son, Brother’s daughter sister’s daughter

d) Father’s fathter, father’s mother

e) Father’s widow, brother’s widow

f) Father’s brother, father’s sister

g) Mother’s father, mother’s mother

h) Mother’s brother, mother’s sister

C) The devolvement of property upon Hindu male will lies to Agnates if there is no Class II heirs. Agnates is a relations whose chain of relationship to the propositus can be traced uninterruptedly through males. Example Brother’s son’s son, Father’s brother’s son’s son

D) The devolvement of property upon Hindu male will lies to Cognates if there is no Agnates. Cognates is a relations in whose chain of relationship to the propositus there is at least one female link.


NBFC check list

Requirements to be complied with and documents to be submitted to RBI by NBFCs for obtaining certificate and Registration from RBI

An indicative list of documents/information to be furnished along with the application. All documents/information is to be submitted in duplicate.

1.

Minimum NOF requirement Rs. 200 lakh.

2.

Application to be submitted in two separate sets tied up properly in two separate files.

3.

Annex II to be submitted duly signed by the director/Authorized signatory and certified by the statutory auditors.

4.

Annex III (directors’ profile) to be separately filled up for each director. Care should be taken to give details of bankers in respect of firms/companies/entities in which directors have substantial interest.

5.

In case the directors are associated or have substantial interest in other companies, indicate clearly the activity of the companies (whether NBFC or not).

6.

Board Resolution specifically approving the submission of the application and its contents and authorising signatory.

7.

Board Resolution to the effect that the company has not accepted any public deposit, in the past (specify period)/does not hold any public deposit as on the date and will not accept the same in future without the prior approval of Reserve Bank of India in writing.

8.

Board resolution stating that the company is not carrying on any NBFC activity/stopped NBFC activity and will not carry on/commence the same before getting registration from RBI.

9.

Auditors Certificate certifying that the company is/does not accept/is not holding Public Deposit.

10.

Auditors Certificate certifying that the company is not carrying on any NBFC activity.

11.

Net owned fund as on date.

12.

Certifying compliance with section 45S of Chapter IIIC of the RBI Act, 1934 in which director/s of the company has substantial interest.

13.

Details of changes in the Memorandum and Articles of Association duly certified.

14.

Last three years Audited balance sheet along with directors & auditors report.

15.

Details of clauses in the memorandum relating to financial business.

16.

Details of change in the management of the company during last financial year till date if any and reasons thereof.

17.

Details of acquisitions, mergers of other companies if any together with supporting documents.

18.

Details of group companies/associate concerns/subsidiaries/holding companies.

19.

Details of infusion of capital if any during last financial year together with the copy of return of allotment filed with Registrar of Companies.

20.

Details of the bank balances/bank accounts/complete postal address of the branch/bank, loan/credit facilities etc. availed.

21.

Business plan for next three years indicating market segment to be covered without any element of public deposits.

22.

Cash flow statement, asset/income pattern statement for next three years.

23.

Brief background note on the activities of the company during the last three years and the reasons for applying for NBFC registration.

24.

II(b) is the company engaged in any capital market activity? If so, whether there has been any non-compliance with SEBI Regulations? (Statement to be certified by Auditors).

25.

Whether any prohibitory order was issued in the past to the company or any other NBFC/RNBC with which the directors/promoters etc. were associated? If yes, details there of.

26.

Whether the company or any of its directors was/is involved in any criminal case, including under section 138(1) of the Negotiable Instruments Act? If yes, details thereof.

27.

Whether the company was granted any permission by ECD to function as Full-fledged Money Changers?

28.

Whether the company was/is authorised by ECD to accept deposits from NRIs.

29.

Whether “Fit and Proper” Norms for Directors have been fulfilled.

ECD= EXPORT CREDIT DIVISION

XBRL Technology

Welcome to XBRL India

XBRL (eXtensible Business Reporting Language) is a language for electronic communication of business and financial data which is revolutionising business reporting around the world. It offers major benefits to all those who have to create, transmit, use or analyse such information. XBRL has been developed by XBRL International, a not-for-profit consortium of over 450 companies and organisations which is promoting its worldwide use.

XBRL India is the Indian Jurisdiction of XBRL International. Its main objective is to promote and encourage the adoption of XBRL in India as the standard for electronic business reporting in India. Members of XBRL India include regulators, stock exchanges, software companies and others.

XBRL India has developed draft General Purpose Financial Reporting XBRL taxonomy for Commercial and Industrial Companies. It is currently developing XBRL Taxonomy for the banking sector.

About XBRL India

XBRL India is a Company registered under Section 25 of Companies Act, 1956, incorporated for managing the affairs of Indian Jurisdiction of XBRL International. XBRL International is comprised of Jurisdictions which represent countries, region or international bodies and focus of XBRL in their area. XBRL Indian Jurisdiction is an established Jurisdiction of XBRL International. Its objectives are:

  • To promote and encourage the adoption of XBRL in India as the standard for electronic business reporting in India
  • To facilitate education and marketing of XBRL
  • To develop and manage XBRL taxonomies
  • To keep the developed XBRL taxonomies updated with regard to international developments
  • To represent Indian interests within XBRL International
  • To contribute to the international development of XBRL
  • XBRL Taxonomies

    Taxonomies are dictionaries used by XBRL. They define the specific tags for individual items of data (such as "net profit"). Different taxonomies will be required for different financial reporting purposes. Different XBRL jurisdictions may have their own financial reporting taxonomies to reflect their local accounting regulations. Many different organisations, including regulators, specific industries or even companies, may require taxonomies to cover their own business reporting needs.

    General Purpose Financial Reporting XBRL Taxonomy for Commercial and Industrial Companies – Acknowledged by XBRL International

    XBRL Banking Taxonomy - Acknowledged by XBRL International

    HTML Version of Taxonomies

New Income Tax return - announced by the IT dept

New Income Tax Return Forms for Assessment Year 2011-12
CBDT notifies New Income Tax Return Forms for the Assessment Year 2011-12
CBDT has notified new income tax return forms for the AY 2011-12. These forms can be accessed by clicking on the following link:-

http://law.incometaxindia.gov.in/DITTaxmann/IncomeTaxRules/PDF/ay2011-12/itr62Form1-9(New2011-12)_2.htm

Trade notice

Service Tax : Introduction of remedial measures to mitigate difficulties faced by service tax assessees in e-filing of Service tax returns

TRADE NOTICE, DATED 17-2-2011

Members of the Trade and public are hereby informed that the Directorate General of Systems and Data Management, Customs & Central Excise, New Delhi, have taken due care of their difficulties faced by Service Tax Assessees in "e-filing" and introduced remittal measures as detailed below :-

(i) A Service Desk has been set up with a national toll-free number 1800 425 4251 which can be accessed by taxpayer between 9AM to 5PM on all working days (Monday to Friday). Besides they can send e-mails (24×7) at e-mail ID (aces.servicedesk@icegate.gov.in). ACES Service Desk generates a unique number called the ticket number and ticket is closed only on resolution of the problem and confirmation by the complainant. If the user gives the required details, the issue is analyzed for resolving at Service desk itself (L-1) and if not possible, the issues are escalated to the L2/L3 team for resolution. Once the resolution is received the same is communicated to the persons concerned, via e-mail and on receipt of confirmation the calls are closed. Since the existing Nos. of telephones are not sufficient to handle pressure during peak filing periods as sometimes the phone lines may be busy, the taxpayers are hereby advised to send e-mails to Service desk.

(ii) ACES Certified Facilitation Centres (CFCs) have also been operationalised in October 2010 and an taxpayer would visit the CFC line in the ACES website for more details. So far, 343 number of CFCs, in more than 90 cities have been set up by members of ICAI, ICWAI & ICSI. These centres have been set up by Members of these institutes, who have valid Certificates of Practice Authorised persons of ACES Certified Facilitation Centres (CFCs) set up by ICAI, ICWAI, ICSI and other can work in ACES on behalf of Central Excise and Service Tax taxpayer. This initiative aims at providing services to taxpayers who may not have requisite IT infrastructure/resources, to use ACES. The services would be available on payment of prescribed service charges for various services such as digitization of paper documents and on-line filing/uploading of documents such as Application for Registration, Returns, Claims, Permissions, intimations etc. in ACES. The CFCs can perform all the functions in ACES on behalf of taxpayers who authorize them to work in ACES.

(iii) The taxpayers who need the services of the CFCs can avail the benefit. Similarly, the local members of ICAI, ICWAI and ICSI, may apply to their respective institutes for setting up of CFCs in their jurisdiction for taking the benefit of the scheme.

(iv) In the help section ACES website (www.aces.gov.in) the Learning Management Software has been provided, which taxpayer can download and see page by page as to how to work on ACES application. In this Section, User Manuals has also been provided for ease of taxpayers. It is requested that the users are advised to go through it, to get clarification on the issue raised by them.

(v) The taxpayers are also advised to get in touch with the jurisdictional Range Officers for updation/correction of their email IDs and regeneration of TIPIN & Password, as Range Officers are empowered in ACES to do these tasks.

(vi) Frequently, while lodging complaints with Service Desk the taxpayers do not provide their xml File which they are trying to upload. It is requested that the taxpayers may send it along with their complaints to the Service Desk.

(vii) As regards blocking of accounts, please note when the users enter wrong passwords five times, the accounts get blocked. For unblocking the accounts the taxpayers are requested to visit their jurisdictional officers. The Directorate General of Systems and Data Management, New Delhi, are now automating the process so that by providing taxpayer’s Registration No. and hint Question and answer, password will be generated automatically and sent to their e-mail ID.

All the Trade Associations and Chambers of Commerce and Industries are requested to bring contents of trade facility to the notice of the members of the Association.

source: rss feeds from www.taxmann.com

Preliminary expenses - source Hindu Business Line

Preliminary expenses from start to finish
M. V. Kali Prasad

Audit of a company in the first year of its incorporation involves audit of preliminary expenses. Over the next few years, there is the write off of these expenses, says M. V. Kali Prasad


WHAT are preliminary expenses? These are incurred for the incorporation of a company. They may be paid by the promoters before the company is incorporated or by the company after it is incorporated. And they include the following: a) professional charges paid for drafting of memorandum of association and articles of association; b) professional charges for consultation in incorporating the company; c) cost of printing of the initial copies of MoA and AoA; d) stamp duty for the documents; e) registration fee paid to the Registrar of Companies (RoC) for incorporation; f) bank charges incurred on the above; and g) incidental expenses such as stationary, conveyance, and so on.

Are share issue expenses preliminary expenses? Preliminary expenses are those incurred in connection with the incorporation of the company. Shares are issued after the company is incorporated. Share issue expenses are not a part of preliminary expenses. Therefore, it is a wrong to disclose share issue expense as part of preliminary expenses. No accounting entry would be permissible under this head once the company is incorporated.

How to record share issue expenses? These are to be recorded under a separate head of account. Section 78 of the Companies Act, dealing with utilisation of securities premium, states defraying of preliminary expense under a clause different from the clause defraying expenditure incurred on issue of shares and/or debentures. It also indicates that share issue expenses are different from preliminary expenses.

Recognising preliminary expenses: Since the expenditure is incurred and paid by the promoters even before the company is incorporated, there is normally a clause that the promoters are reimbursed of all the expenditure. It would not be proper to treat these expenses as accrued as on the date of incorporation of the company and to show them as outstanding expenditure. There cannot be any transactions entered into by the company before it is incorporated.

Accounting treatment of preliminary expenses: Preliminary expenses are capitalised and amortised over a reasonable period of time. Format of balance-sheet of a company provides for disclosure of un-amortised preliminary expenses under the head "Miscellaneous items".

Accounting Standard on preliminary expenses: AS 26 dealing with intangible assets covers preliminary expenses as well. The period over which these preliminary expenses are to be amortised is best left to the judgment of the directors of the company. AS 26 suggests writing off intangible assets over a period of 10 years, though a different period is permissible if it is justified in the opinion of the management. It is a common practice to write off these preliminary expenses in a period of five years, though there is no legal provision to this effect. A company can as well write off its preliminary expenses in the same year as it incurs.

Preliminary expenses in other forms of organisation: Setting up other forms of organisation, such as partnership firms, does not involve much expenditure. Perhaps, for this reason, there is no provision of preliminary expenses under the Partnership Act

Audit of preliminary expenses: Audit of a company in the first year of its incorporation involves audit of preliminary expenses. Over the next few years, the only matter to be concerned with is write off of preliminary expenses. At the planning stage, the auditor should enquire of the company about the details of preliminary expenses. Reference to the minutes of the first meeting of board of directors indicates the quantum of preliminary expenses and the period over which it is proposed to be written off. The auditor would do well to retain a copy of the minutes for his documentation.

It is common practice that the chartered accountant associated with the incorporation of a company is appointed as first auditor of the company; this is not essential, though. Incorporation of a company can as well be made with the help of other professionals such as company secretaries, advocates, and so on. During the course of audit, the auditor should vouch the expenditure with reference to the bills and vouchers of expenditure.

There would be certain expenses, such as stamp duty affixed on the memorandum and articles of association, which is filed with the Registrar for incorporation. Therefore, the audit evidence in support of stamp duty paid is less conclusive. Under these circumstances, the auditor can verify the receipt issued by the Registrar of Stamps for stamps issued by him. Additionally, he may require the company to produce a photocopy of the memorandum and articles of association, duly attested by a director of the company.

Audit of preliminary expenses is a peculiar situation since these are incurred even before the company is incorporated. The auditor should read the memorandum and articles of Association to see if the clause of reimbursing the preliminary expenditure is contained therein.

Possibly, preliminary expenditure could have been incurred by more than one person. Each one of the promoters who incurs the expenditure in connection with the incorporation of the company has to produce a statement of expenditure to seek reimbursement. Such a statement should be supported by the details of expenditure and the relevant bills and receipts.

The minutes of the board of directors would be helpful to quantify the expenditure. The board should adopt the preliminary expenditure and also decide the period over which it has to be written off.

Another area of concern to the auditor would be the mode of reimbursement of preliminary expenditure. It can be by way of reimbursement in cash or allotment of shares. If shares are allotted through reimbursement of preliminary expenditure, it amounts to allotment of shares in consideration other than cash, and the disclosure norms as per Schedule VI would apply.

Section 227(1A) requires an auditor to satisfy that transactions represented merely by way of book entries are not prejudicial to the interests of the company and its shareholders. Write-off of preliminary expenditure being one such, the auditor should use his diligence to satisfy himself about both the quantum of preliminary expenditure as well as the period over which it is to be written off.

Auditor and preliminary expenses: When the chartered accountant engaged by the company for its incorporation is also the first auditor, the auditor should be cautious about the restrictions of Section 226(3). He would be disqualified to be the auditor of the company if he accepts shares in consideration of his professional services.

Audit and Assurance Standard 26, on letters of engagement, suggests separate letters of engagement for separate assignments.

Therefore, the auditor should issue separate letters of engagements for incorporation of the company and or its audit. After all, his engagement for incorporation is by the promoters and his appointment as an auditor is by the company.

Preliminary expenses under the Income-Tax Act: The I-T Act provides for amortisation of preliminary expenses. Section 35 D specifies the expenditure to be included in preliminary expenditure, which under the I-T Act is allowable for all types of assesses. Conceptually, this is different from preliminary expenses under company law.

Allowability of share issue expenses under the I-T Act: Share issue expenses are not normally allowable as business expenditure. The only possibility of claiming share issue expenses under the I-T Act is provided in Section 35 D. Preliminary expenses under this section covers expenditure incurred for raising funds for the project.

As a result, if shares are issued to fund the project, such expenditure can be included under preliminary expenses and claimed for amortisation under Section 35 D.

More powers for ROC

Registrar of Companies (RoC) field officers to get more powers

16 Apr, 2011, 01.44AM IST, Souvik Sanyal,ET Bureau

NEW DELHI: The ministry of corporate affairs will give its investigating arms greater independence by doing away with the need for seeking multiple administrative approvals before launching prosecution against defaulting companies, a government official has said.

To this end, it is delegating a large part of investigation-related work to the level of regional directors, encouraging the use of emails and stepping up hiring at its field offices to speed up probes.

"We will strengthen the functioning of the Registrar of Companies , or RoC, so that they (the officers) are not subjected to prolonged delays while investigating a case," said a senior official with the ministry, adding that excessive delays have often enabled companies to tamper with crucial evidence.

In a series of recent meetings with the RoC, the ministry said it planned to give greater liberty to its officers in initiating criminal action against defaulters once they were convinced of the companies' connivance in an illegal action.

He, however, said the greater power for the field officers would come with increased accountability as they have been directed not to harass company directors or senior professionals without substantial evidence.

There are several challenges the government faces before a formal case is initiated in the courts. For instance, issuing summons to defaulters takes several years because prosecuting officers need the go-ahead from higher authorities who are often not quick to act. Then there are delays because of the involvement of multiple RoCs in a case. Multiple jurisdictions leads to multiplicity of approvals, a concern that is being handled through the increased use of electronic communication, the official said.

During the last four years, over 13,000 companies were prosecuted for non-compliance of various provisions of the Companies Act but a substantial number of these cases is still pending. To add to the problems, the prosecution arm of the RoC is severely understaffed. Although several measures like compounding of offences by payment of fines and easy exit scheme for defunct companies have had some impact, the delay in the process of prosecution is still a cause for concern.


Source: http://economictimes.indiatimes.com/news/economy/policy/registrar-of-companies-roc-field-officers-to-get-more-powers/articleshow/7995947.cms



SME EXCHANGE AN ANALYSIS

We are happy to release sme exchange analysis. The Volume of Regional stock exchange volume has reduced to the extent. The volume of Regional stock exchange is attached It appeared in today's Business Standard. SEBI and Government should take necessary steps to introduce stock exchange reforms. The opportunity to be available to small and medium enterprises. The opening up of SME exchanges will be beneficial both for corporate and professionals.


Best Regards




ANALYSIS OF SME STOCK EXCHANGES - CS A Rengarajan/Alok Rudra/CS Richa sharma



SME Exchange is already under consideration.{Chapter XA under Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) (Third Amendment) Regulations, 2010}]

AN OPEN LETTER TO SEBI CHAIRMAN FOR LISTED ENTITIES

There are more than 900000 companies active in MCA portal across country. Daily 100-200 companies are incorporated by professionals. Whereas the total listed entities are only 6000 out of which shares of 3000 companies are regularly traded in the stock exchange. To have better corproate governance and Small and Medium companies to access global markets, it is necessary to formulate SME stock exchange reforms.


Introduction:

During 1988, the Government has announced tax concession of 15% for widely held companies i.e. listed entities. Lot of companies voluntarily availed this concession and listed in major stock exchanges. The concession was subsequently withdrawn due to single rate for corporate sector.and one single rate for domestic and another rate for foreign companies.

The budget speech of then Hon’ble Finance Minister is as follows. (Budget speech 1988)

I now propose to introduce a provision whereby every company will have to pay a “minimum corporate tax” on the profits declared by it in its own accounts. Under this new provision, a company will pay tax on at least 30% of its book profit. In other words, a domestic widely held company will pay tax of at least 15% of its book profit. This measure will yield a revenue gain of approximately Rs.75 crores.

Stock Exchanges: Prior to 1994 Bombay Stock Exchange and regional stock exchanges used to function. Among them Bombay Stock Exchange considered to be premier one. After 1994, National stock exchange was started and initiated paper less trading. Subsequently, Bombay stock exchange also adopted the same. The Regional stock exchange was functioning before 2000 after that the mandatory clause was removed from listing agreement due to the fact that NSE making inroads in rural and semi urban areas, urban areas by screen based trading. The NSE which was replaced the regional stock exchanges and they are surviving with minimum turnover

Regional Stock Exchange: The same can be renamed as SME exchange to provide liquidity to the Small and Medium enterprises. SME segment which wants to global to sell their products but raising of funds from Venture capital or Private Equities are very difficult. The Funding authority’s procedure is much complex one. The Government can initiate stock exchange reforms in line with Telecommunication reforms, as the affordability of mobile phones to the common man. The same principle should be applied to Stock exchange reforms.

Shareholding pattern at SME Exchanges: The SEBI should relax the minimum and maximum shareholding pattern. The company shares are to be widely held in these companies. They should fix at least 100 members in these companies. There should be provision to be contained in the SME listing agreement.

The government should come forward to make stock exchange reform and add more companies by introducing SME exchanges with lesser compliance and companies should come forward for listing as well as follow good corporate governance.

Conclusion: The present limit of 6000 to 15000 companies will be listed provided government should initiate SME stock exchange reforms with the following concessions.

1) Reduce joining fees and annual listing fees

2) Limited paper work

3) Simpler delisting formalities

4) Minimal documentations.

5) Tax concession for Listed companies.


Admissibility of entries in the books of account

  The Bhartiya Sakshya Adhiniyam 2023 (Indian Evidence Act 2023) Section 28 deals with the admissibility of entries in the books of accoun...