attractions.
************"LEADERS ARE THE READERS,READERS ARE THE LEADERS*************
Wednesday, August 27, 2008
GOLDEN QUOTE
Train the mind to dwell on the inner equipment rather than the outer
attractions.
attractions.
Over-the-Counter
Term of the Day - Over-the-Counter
OTC. A security which is not traded on an exchange, usually due to an
inability to meet listing requirements. For such securities, broker/dealers
negotiate directly with one another over computer networks and by phone,
and their activities are monitored by the NASD. OTC stocks are usually very
risky since they are the stocks that are not considered large or stable
enough to trade on a major exchange. They also tend to trade infrequently,
making the bid-ask spread larger. Also, research about these stocks is more
difficult to obtain. also called unlisted.
************"LEADERS ARE THE READERS,READERS ARE THE LEADERS*************
Quote of the Day
Quote of the Day
My approach works not by making valid predictions but by allowing me to
correct false ones. - George Soros
************"LEADERS ARE THE READERS,READERS ARE THE LEADERS*************
Tuesday, August 26, 2008
THE ROSE GARDEN
STORY-OF-THE-WEEK
THE ROSE GARDEN
Spring had brought new life to this beautiful rose garden. Each bush was
abloom with roses of different hues, shapes and sizes. The roses on three
of the bushes got talking.
The roses on the first bush were blood red in colour. The second bush had
roses in yellow with pink streaks, but their unique selling point was their
shape. Each one of them was exquisitely formed. Each fold and each petal
was a sculpted masterpiece. The third bush had soft light pink roses known
as desi-gulab or wild roses. They were not at all pretty to look at, but
they were extremely fragrant.
The red roses said, "We wish we could be given to a beloved, for red roses
are the ultimate expression of love."
The roses on the second bush said, "We are so perfect, we should be
displayed for people to see and admire."
The roses on the third bush said softly, "We hope to be able to spread our
fragrance to more and more people."
The next day, the gardener came and cut the rose stalks. He sent them to a
florist.
The red roses were bought by a rich old lady who passed them on to an
expert garland stringer. The garland stringer chopped off the stalks and
leaves. She strung the roses into an exquisite garland, adding some
asparagus ferns and silver strings. Two beautiful garlands were made and
delivered to the rich old lady. She offered them with devotion to Radha and
Krishna at the temple. The red roses were happy for they had been used by
the lady as an offering of love, to none other than Radha-Krishna the
proverbial lovers. Many devotees saw the exquisite garlands and wowed at
them. The red roses swelled with vanity. The next day the priest removed
the garlands from the deities and cast them away in a corner of the temple.
The red roses cried, "Oh Krishna! Oh Radha! We are sorry for being vain. We
were too caught up in pride to enjoy our closeness with you. Please Lord!
Give us another chance to serve you. Please do not caste us away." The
roses beseeched the Lord, but no one came forward to listen to their cries.
Meanwhile the perfect yellow roses were bought by an interior decorator and
were used to design an enormous flower arrangement along with various types
of greens. The entire set up was placed on the centre table of the entrance
of a hotel. The roses were proud for they were the centre of attraction for
all to see. Busy executives rushed past, holding their cell phones, deep in
conversation. Others hurried past, glancing at their expensive wrist
watches and talking sixteen miles to a dozen. The yellow roses preened and
smiled, but only a few people had time to stop by and admire their
perfection.
Let us pause for a moment to look into the fate of the little pink roses.
That bunch was left sitting in the shop of the florist for days, for no one
seemed to want to buy them. Eventually the florist gave them away for free
to the girl who worked in the shop. The roses wept for they felt dejected
and useless. They were almost beginning to rot and their dreams of giving
fragrance to people seemed to be quite impossible to realize. The girl took
the roses home and gave them to her mother. The mother shook off all the
petals into a huge basin of water. The petals lay immersed in the water for
days. They added some powder to the water now and then so that it would not
start stinking due to stagnation. Some days later she carefully removed the
petals and pure rose water was left behind! She bottled the rose water and
gave it to the priest in the temple. The priest used the fragrant rose
water to wash the feet of the Lord and also to sprinkle on devotees to
shower blessings on them. The roses were so happy that they literally wept
in devotion!
In the corner of the temple the repentance of the proud red roses had
finally touched the heart of the Lord. A man saw the wilting red garlands.
He picked them up and put them in the sun to dry along with many other
flowers that had been laid out for drying. When the flowers were totally
dry, they were crushed to a fine powder and some glue like substance and
some oils were added to them. A group of young workers were deputed to
hand roll the mixture onto fine sticks. Aggarbattis were made! They were
used in the temple to sanctify the area with their aroma. The red roses'
vanity was burnt away and they were reduced to nothing, but they were
happy!
What about the perfect yellow roses? They spent all their life waiting for
recognition and admiration. Eventually they wilted and the hotel cleaner
dumped them into the garbage along with the rotting peels of vegetables,
egg shells and chicken bones. Even their cries could be heard by no one.
Here is some food for thought. The end that you eventually meet with
depends upon the road you choose to take for the journey. The red roses
suffered a setback to their vanity but made up for it because they soon
realised their folly. The wild roses were focussed right from day one,
whereas the yellow roses thought about nothing, but the physical and the
mundane. Find your focus, that is of utmost importance. Perhaps you could
identify with either of the roses and in case you are on the wrong track,
this could just be the right time for you to change your track. Do you want
to end up giving fragrance to the world or do you want to end up in a
dustbin? The choice is yours!
When you came into this world, you were crying and all those around you
were smiling. Live your life such that when you are to go, you are smiling
and others are crying.
HAPPY KRISHNA JANAMASHTAMI!
SANJAY TANDON
************"LEADERS ARE THE READERS,READERS ARE THE LEADERS*************
THE ROSE GARDEN
Spring had brought new life to this beautiful rose garden. Each bush was
abloom with roses of different hues, shapes and sizes. The roses on three
of the bushes got talking.
The roses on the first bush were blood red in colour. The second bush had
roses in yellow with pink streaks, but their unique selling point was their
shape. Each one of them was exquisitely formed. Each fold and each petal
was a sculpted masterpiece. The third bush had soft light pink roses known
as desi-gulab or wild roses. They were not at all pretty to look at, but
they were extremely fragrant.
The red roses said, "We wish we could be given to a beloved, for red roses
are the ultimate expression of love."
The roses on the second bush said, "We are so perfect, we should be
displayed for people to see and admire."
The roses on the third bush said softly, "We hope to be able to spread our
fragrance to more and more people."
The next day, the gardener came and cut the rose stalks. He sent them to a
florist.
The red roses were bought by a rich old lady who passed them on to an
expert garland stringer. The garland stringer chopped off the stalks and
leaves. She strung the roses into an exquisite garland, adding some
asparagus ferns and silver strings. Two beautiful garlands were made and
delivered to the rich old lady. She offered them with devotion to Radha and
Krishna at the temple. The red roses were happy for they had been used by
the lady as an offering of love, to none other than Radha-Krishna the
proverbial lovers. Many devotees saw the exquisite garlands and wowed at
them. The red roses swelled with vanity. The next day the priest removed
the garlands from the deities and cast them away in a corner of the temple.
The red roses cried, "Oh Krishna! Oh Radha! We are sorry for being vain. We
were too caught up in pride to enjoy our closeness with you. Please Lord!
Give us another chance to serve you. Please do not caste us away." The
roses beseeched the Lord, but no one came forward to listen to their cries.
Meanwhile the perfect yellow roses were bought by an interior decorator and
were used to design an enormous flower arrangement along with various types
of greens. The entire set up was placed on the centre table of the entrance
of a hotel. The roses were proud for they were the centre of attraction for
all to see. Busy executives rushed past, holding their cell phones, deep in
conversation. Others hurried past, glancing at their expensive wrist
watches and talking sixteen miles to a dozen. The yellow roses preened and
smiled, but only a few people had time to stop by and admire their
perfection.
Let us pause for a moment to look into the fate of the little pink roses.
That bunch was left sitting in the shop of the florist for days, for no one
seemed to want to buy them. Eventually the florist gave them away for free
to the girl who worked in the shop. The roses wept for they felt dejected
and useless. They were almost beginning to rot and their dreams of giving
fragrance to people seemed to be quite impossible to realize. The girl took
the roses home and gave them to her mother. The mother shook off all the
petals into a huge basin of water. The petals lay immersed in the water for
days. They added some powder to the water now and then so that it would not
start stinking due to stagnation. Some days later she carefully removed the
petals and pure rose water was left behind! She bottled the rose water and
gave it to the priest in the temple. The priest used the fragrant rose
water to wash the feet of the Lord and also to sprinkle on devotees to
shower blessings on them. The roses were so happy that they literally wept
in devotion!
In the corner of the temple the repentance of the proud red roses had
finally touched the heart of the Lord. A man saw the wilting red garlands.
He picked them up and put them in the sun to dry along with many other
flowers that had been laid out for drying. When the flowers were totally
dry, they were crushed to a fine powder and some glue like substance and
some oils were added to them. A group of young workers were deputed to
hand roll the mixture onto fine sticks. Aggarbattis were made! They were
used in the temple to sanctify the area with their aroma. The red roses'
vanity was burnt away and they were reduced to nothing, but they were
happy!
What about the perfect yellow roses? They spent all their life waiting for
recognition and admiration. Eventually they wilted and the hotel cleaner
dumped them into the garbage along with the rotting peels of vegetables,
egg shells and chicken bones. Even their cries could be heard by no one.
Here is some food for thought. The end that you eventually meet with
depends upon the road you choose to take for the journey. The red roses
suffered a setback to their vanity but made up for it because they soon
realised their folly. The wild roses were focussed right from day one,
whereas the yellow roses thought about nothing, but the physical and the
mundane. Find your focus, that is of utmost importance. Perhaps you could
identify with either of the roses and in case you are on the wrong track,
this could just be the right time for you to change your track. Do you want
to end up giving fragrance to the world or do you want to end up in a
dustbin? The choice is yours!
When you came into this world, you were crying and all those around you
were smiling. Live your life such that when you are to go, you are smiling
and others are crying.
HAPPY KRISHNA JANAMASHTAMI!
SANJAY TANDON
************"LEADERS ARE THE READERS,READERS ARE THE LEADERS*************
GOLDEN QUOTE
Many people will want to quarrel and fight with you; realize that the only
weapons you need are a smile and a loveable attitude.
weapons you need are a smile and a loveable attitude.
************"LEADERS ARE THE READERS,READERS ARE THE LEADERS*************
GOLDEN QUOTE
A simple way to remove fear is to seek knowledge and understanding.
************"LEADERS ARE THE READERS,READERS ARE THE LEADERS*************
CONGRATULATIONS TO CS !!!!
THE FOLLOWING ARE THE GREAT PERSONALITIES OF JAB WE MET WHO HAD CLEARED
CS FINAL EXAM JUNE 2008.
JAB WE MET MEMBERS ARE HIGHLY PROUD ON THE ACHIEVEMENTS OF FOLLOWING
MEMBERS OF JAB WE MET .
NOW IT IS NOT ONLY JAB WE MET CA BUT ALSO JAB WE MET CS ! ! !
NAME QUALIFICATIONS
RAHUL 4TH RANK IN CS FINAL JUNE 2008, DOING CA FINAL
NITYA 22ND RANK IN CS FINAL JUNE 2008, CLEARED CA FINAL IN
MAY 2008
DEVESH CLEARED CS FINAL IN JUNE 2008, DOING CA FINAL
AKHIL GUPTA CLEARED CS FINAL IN JUNE 2008, CLEARED CA FINAL IN MAY 2008
WE HOPE IN FUTURE MORE MEMBERS OF JAB WE MET WILL COME UP WITH FLYING
COLORS IN WHATEVER FIELD THEY WILL JOIN.
ON BEHALF OF JAB WE MET : CONGRATULATION TO ALL !!!
SATBIR SINGH
PRESIDENT
MEMBER JAB WE MET CA
REDEFINING PROFESSIONALISM……
************"LEADERS ARE THE READERS,READERS ARE THE LEADERS*************
CS FINAL EXAM JUNE 2008.
JAB WE MET MEMBERS ARE HIGHLY PROUD ON THE ACHIEVEMENTS OF FOLLOWING
MEMBERS OF JAB WE MET .
NOW IT IS NOT ONLY JAB WE MET CA BUT ALSO JAB WE MET CS ! ! !
NAME QUALIFICATIONS
RAHUL 4TH RANK IN CS FINAL JUNE 2008, DOING CA FINAL
NITYA 22ND RANK IN CS FINAL JUNE 2008, CLEARED CA FINAL IN
MAY 2008
DEVESH CLEARED CS FINAL IN JUNE 2008, DOING CA FINAL
AKHIL GUPTA CLEARED CS FINAL IN JUNE 2008, CLEARED CA FINAL IN MAY 2008
WE HOPE IN FUTURE MORE MEMBERS OF JAB WE MET WILL COME UP WITH FLYING
COLORS IN WHATEVER FIELD THEY WILL JOIN.
ON BEHALF OF JAB WE MET : CONGRATULATION TO ALL !!!
SATBIR SINGH
PRESIDENT
MEMBER JAB WE MET CA
REDEFINING PROFESSIONALISM……
************"LEADERS ARE THE READERS,READERS ARE THE LEADERS*************
futures contract
futures contract
A standardized, transferable, exchange-traded contract that requires
delivery of a commodity, bond, currency, or stock index, at a specified
price, on a specified future date. Unlike options, futures convey an
obligation to buy. The risk to the holder is unlimited, and because the
payoff pattern is symmetrical, the risk to the seller is unlimited as well.
Dollars lost and gained by each party on a futures contract are equal and
opposite. In other words, futures trading is a zero-sum game. Futures
contracts are forward contracts, meaning they represent a pledge to make a
certain transaction at a future date. The exchange of assets occurs on the
date specified in the contract. Futures are distinguished from generic
forward contracts in that they contain standardized terms, trade on a
formal exchange, are regulated by overseeing agencies, and are guaranteed
by clearinghouses. Also, in order to insure that payment will occur,
futures have a margin requirement that must be settled daily. Finally, by
making an offsetting trade, taking delivery of goods, or arranging for an
exchange of goods, futures contracts can be closed. Hedgers often trade
futures for the purpose of keeping price risk in check. also called
futures.
************"LEADERS ARE THE READERS,READERS ARE THE LEADERS*************
DUMPING
Term of the Day
For Monday, August 25, 2008
dumping
Definition
Exporting goods at prices lower than the home-market prices. In
price-to-price dumping, the exporter uses higher home-prices to supplement
the reduced revenue from lower export prices. In price-cost dumping, the
exporter is subsidized by the local government with duty drawbacks, cash
incentives, etc. Dumping is legal under GATT (now WTO) rules unless its
injurious effect on the importing country's producers can be established.
If injury is established, GATT rules allow imposition of anti-dumping duty
equal to the difference between the exporter's home-market price and the
importer's FOB price.
dumping is in the Banking, Commerce & Finance, Customs Documentation &
Procedures, Economics, Politics, & Society and International Trade &
Relations subjects.
dumping appears in the definitions of the following terms: dual pricing,
exporter's sale price, endangerment assessment, constructed value and
release.
This content can be found on the following page:
http://www.businessdictionary.com/definition/dumping.html
with regards
For Monday, August 25, 2008
dumping
Definition
Exporting goods at prices lower than the home-market prices. In
price-to-price dumping, the exporter uses higher home-prices to supplement
the reduced revenue from lower export prices. In price-cost dumping, the
exporter is subsidized by the local government with duty drawbacks, cash
incentives, etc. Dumping is legal under GATT (now WTO) rules unless its
injurious effect on the importing country's producers can be established.
If injury is established, GATT rules allow imposition of anti-dumping duty
equal to the difference between the exporter's home-market price and the
importer's FOB price.
dumping is in the Banking, Commerce & Finance, Customs Documentation &
Procedures, Economics, Politics, & Society and International Trade &
Relations subjects.
dumping appears in the definitions of the following terms: dual pricing,
exporter's sale price, endangerment assessment, constructed value and
release.
This content can be found on the following page:
http://www.businessdictionary.com/definition/dumping.html
with regards
************"LEADERS ARE THE READERS,READERS ARE THE LEADERS*************
Thursday, August 21, 2008
Quote of the Day
The definition of a great company is one that will be great for 25 or 30
years. - Warren Buffett
years. - Warren Buffett
************"LEADERS ARE THE READERS,READERS ARE THE LEADERS*************
price to sales ratio
Term of the Day - price to sales ratio
A stock's capitalization divided by its sales over the trailing 12 months.
The value is the same whether the calculation is done for the whole company
or on a per-share basis. A low price to sales ratio (for example, below
1.0) is usually thought to be a better investment since the investor is
paying less for each unit of sales. However, sales don't reveal the whole
picture, since the company might be unprofitable. Because of the
limitations, price to sales ratio are usually used only for unprofitable
companies, since such companies don't have a price/earnings ratio (P/E
ratio).
SATBIR SINGH
PRESIDENT
MEMBER JAB WE MET CA
REDEFINING PROFESSIONALISM……
************"LEADERS ARE THE READERS,READERS ARE THE LEADERS*************
A stock's capitalization divided by its sales over the trailing 12 months.
The value is the same whether the calculation is done for the whole company
or on a per-share basis. A low price to sales ratio (for example, below
1.0) is usually thought to be a better investment since the investor is
paying less for each unit of sales. However, sales don't reveal the whole
picture, since the company might be unprofitable. Because of the
limitations, price to sales ratio are usually used only for unprofitable
companies, since such companies don't have a price/earnings ratio (P/E
ratio).
SATBIR SINGH
PRESIDENT
MEMBER JAB WE MET CA
REDEFINING PROFESSIONALISM……
************"LEADERS ARE THE READERS,READERS ARE THE LEADERS*************
adjusting events
Term of the Day
For Monday, August 18, 2008
adjusting events
Definition
Material events that occur between the date of preparation of financial
statements and the date of their approval by the management. Such events
must be reflected in the financial statements of a firm, to comply with the
requirement of giving a 'true and fair view' of its financial position. A
non-material (non adjusting) but significant event may be disclosed in the
notes (footnotes) to the financial statements. Also called post balance
sheet events.
adjusting events is in the Accounting & Auditing, Banking, Commerce &
Finance and Corporate, Commercial, & General Law subjects.
adjusting events appears in the definition of the following term: post
balance sheet events.
This content can be found on the following page:
http://www.businessdictionary.com/definition/adjusting-events.html
SATBIR SINGH
PRESIDENT
MEMBER JAB WE MET CA
REDEFINING PROFESSIONALISM……
For Monday, August 18, 2008
adjusting events
Definition
Material events that occur between the date of preparation of financial
statements and the date of their approval by the management. Such events
must be reflected in the financial statements of a firm, to comply with the
requirement of giving a 'true and fair view' of its financial position. A
non-material (non adjusting) but significant event may be disclosed in the
notes (footnotes) to the financial statements. Also called post balance
sheet events.
adjusting events is in the Accounting & Auditing, Banking, Commerce &
Finance and Corporate, Commercial, & General Law subjects.
adjusting events appears in the definition of the following term: post
balance sheet events.
This content can be found on the following page:
http://www.businessdictionary.com/definition/adjusting-events.html
SATBIR SINGH
PRESIDENT
MEMBER JAB WE MET CA
REDEFINING PROFESSIONALISM……
GOLDEN QUOTE
Success springs from calmness of the mind. It is a cold iron which cuts and
bends hot iron.
bends hot iron.
Wednesday, August 20, 2008
Quote
Quote of the Day
If all the rich people in the world divided up their money among themselves
there wouldn't be enough to go around. - Christina Stead
SATBIR SINGH
PRESIDENT
MEMBER JAB WE MET CA
REDEFINING PROFESSIONALISM……
************"LEADERS ARE THE READERS,READERS ARE THE LEADERS*************
If all the rich people in the world divided up their money among themselves
there wouldn't be enough to go around. - Christina Stead
SATBIR SINGH
PRESIDENT
MEMBER JAB WE MET CA
REDEFINING PROFESSIONALISM……
************"LEADERS ARE THE READERS,READERS ARE THE LEADERS*************
commercial paper
Term of the Day - commercial paper
An unsecured obligation issued by a corporation or bank to finance its
short-term credit needs, such as accounts receivable and inventory.
Maturities typically range from 2 to 270 days. Commercial paper is
available in a wide range of denominations, can be either discounted or
interest-bearing, and usually have a limited or nonexistent secondary
market. Commercial paper is usually issued by companies with high credit
ratings, meaning that the investment is almost always relatively low risk.
SATBIR SINGH
PRESIDENT
MEMBER JAB WE MET CA
REDEFINING PROFESSIONALISM……
************"LEADERS ARE THE READERS,READERS ARE THE LEADERS*************
An unsecured obligation issued by a corporation or bank to finance its
short-term credit needs, such as accounts receivable and inventory.
Maturities typically range from 2 to 270 days. Commercial paper is
available in a wide range of denominations, can be either discounted or
interest-bearing, and usually have a limited or nonexistent secondary
market. Commercial paper is usually issued by companies with high credit
ratings, meaning that the investment is almost always relatively low risk.
SATBIR SINGH
PRESIDENT
MEMBER JAB WE MET CA
REDEFINING PROFESSIONALISM……
************"LEADERS ARE THE READERS,READERS ARE THE LEADERS*************
MISCOMMUNICATION
************"LEADERS ARE THE READERS,READERS ARE THE LEADERS*************
MARKUP
Term of the Day
For Wednesday, August 20, 2008
markup
Definition 1
Budgeting: Line-by-line review of a budget for approval, disapproval, or
modification by a committee formed for the purpose.
Definition 2
Distribution: Difference in prices at different stages (price points)
between a producer and the ultimate buyer.
Definition 3
Pricing: Amount added to the cost price of an item to cover incidental
costs (interest, labor, taxes, utilities) and to provide for profit in the
item's selling price.
markup is in the Accounting & Auditing, Advertising, Marketing, & Sales,
Distribution & Logistics and Planning & Scheduling subjects.
markup appears in the definitions of the following terms: rich text format
(RTF), principal basis, Ramsey pricing, inventory turnover and vendor
analysis.
This content can be found on the following page:
http://www.businessdictionary.com/definition/markup.html
************"LEADERS ARE THE READERS,READERS ARE THE LEADERS*************
For Wednesday, August 20, 2008
markup
Definition 1
Budgeting: Line-by-line review of a budget for approval, disapproval, or
modification by a committee formed for the purpose.
Definition 2
Distribution: Difference in prices at different stages (price points)
between a producer and the ultimate buyer.
Definition 3
Pricing: Amount added to the cost price of an item to cover incidental
costs (interest, labor, taxes, utilities) and to provide for profit in the
item's selling price.
markup is in the Accounting & Auditing, Advertising, Marketing, & Sales,
Distribution & Logistics and Planning & Scheduling subjects.
markup appears in the definitions of the following terms: rich text format
(RTF), principal basis, Ramsey pricing, inventory turnover and vendor
analysis.
This content can be found on the following page:
http://www.businessdictionary.com/definition/markup.html
************"LEADERS ARE THE READERS,READERS ARE THE LEADERS*************
GOLDEN QUOTE
When people cannot stand by you because they do not understand you, God
will stand by you.
will stand by you.
************"LEADERS ARE THE READERS,READERS ARE THE LEADERS*************
Quote
Quote of the Day
It's one of the ironies of investing. The rich can afford to take risks,
but they don't need to. The poor need to take risks, but they often can't
afford to. - Jonathan Clements
SATBIR SINGH
PRESIDENT
MEMBER JAB WE MET CA
REDEFINING PROFESSIONALISM……
************"LEADERS ARE THE READERS,READERS ARE THE LEADERS*************
It's one of the ironies of investing. The rich can afford to take risks,
but they don't need to. The poor need to take risks, but they often can't
afford to. - Jonathan Clements
SATBIR SINGH
PRESIDENT
MEMBER JAB WE MET CA
REDEFINING PROFESSIONALISM……
************"LEADERS ARE THE READERS,READERS ARE THE LEADERS*************
letter of intent
Term of the Day - letter of intent
A letter from one company to another acknowledging a willingness and
ability to do business. A letter of intent is most often issued as
acknowledgment of the fact that a merger between companies or an
acquisition is being considered seriously. Sometimes, a letter of intent
may also be issued by a mutual fund shareholder to indicate that he/she
would like to invest certain amounts of money at certain specified times.
In exchange for signing a letter of intent, the shareholder would often
qualify for reduced sales charges. A letter of intent is not a contract and
cannot be enforced, it is just a document stating serious intent to carry
out certain business activities.
SATBIR SINGH
PRESIDENT
MEMBER JAB WE MET CA
REDEFINING PROFESSIONALISM……
************"LEADERS ARE THE READERS,READERS ARE THE LEADERS*************
A letter from one company to another acknowledging a willingness and
ability to do business. A letter of intent is most often issued as
acknowledgment of the fact that a merger between companies or an
acquisition is being considered seriously. Sometimes, a letter of intent
may also be issued by a mutual fund shareholder to indicate that he/she
would like to invest certain amounts of money at certain specified times.
In exchange for signing a letter of intent, the shareholder would often
qualify for reduced sales charges. A letter of intent is not a contract and
cannot be enforced, it is just a document stating serious intent to carry
out certain business activities.
SATBIR SINGH
PRESIDENT
MEMBER JAB WE MET CA
REDEFINING PROFESSIONALISM……
************"LEADERS ARE THE READERS,READERS ARE THE LEADERS*************
GOLDEN QUOTES
"NATURE GAVE YOU FACE , BUT YOU HAVE TO PROVIDE THE EXPRESSION"
SATBIR SINGH
PRESIDENT
JAB WE MET CA
REDEFINING PROFESSIONALISM……
************"LEADERS ARE THE READERS,READERS ARE THE LEADERS*************
SATBIR SINGH
PRESIDENT
JAB WE MET CA
REDEFINING PROFESSIONALISM……
************"LEADERS ARE THE READERS,READERS ARE THE LEADERS*************
Lessons From Phelps Life
|--------------------------------------------------------------------------|
|At 23, Michael Fred Phelps has become an international sporting sensation.|
| |
|The young American swimmer has smashed seven world records and won eight |
|gold medals at the Beijing [Images] Olympics [Images], the first athlete |
|ever to secure first place so many times at a single Olympics Games. |
| |
|Given his success, it's easy to slot Phelps into the 'born achievers' |
|category -- at 23, he's established a glorious career doing what he loves |
|best, he's a millionaire, a world record-holder and the pride of his |
|nation. |
| |
|But hold on a minute -- is Michael Phelps really a born achiever? |
| |
|He may beg to differ. |
| |
|At the age of seven Phelps, the youngest of three children, was diagnosed |
|with Attention-Deficit Hyperactivity Disorder. For those not familiar with|
|the condition, ADHD is a childhood condition characterised by constant |
|activity, impulsive behaviour and the inability to focus one's attention |
|on anything for a short span of time. |
| |
|ADHD is treated with therapy and medication, but is not classified as |
|curable -- as per information on the website WebMd.com, about 60 percent |
|of afflicted kids carry the condition into adulthood. |
| |
|To help release his pent-up energy and to emulate his older sisters who |
|were also accomplished swimmers, Phelps took up swimming, starting to |
|outshine his peers right from the start. |
| |
|At the age of nine, Michael's parents divorced. His mother brought up all |
|three children single-handedly, encouraging them to follow their dreams at|
|all costs -- one middle-school teacher even told Michael's mother he would|
|never be a success. |
| |
|But successful Phelps is, and how. |
| |
|Yes, there are the occasional set-backs. Like the time back in 2004 when |
|Phelps, then 19, was arrested for driving under the influence of alcohol. |
|He was under the legal drinking age limit of 21 in any case and to top it |
|he was driving in an inebriated state. A repentant Phelps pleaded guilty |
|and was sentenced to 18 months probation, saying in court, "I recognise |
|the seriousness of this mistake. I've learned from this mistake and will |
|continue learning from this mistake for the rest of my life." |
| |
|So who is Michael Phelps? He was a regular kid who struggled with an |
|irregular condition and the divorce of his parents. He's young, he excels |
|at what he does and like the rest of us, slips up once in a while. |
| |
|And what life lessons do his struggles and successes hold for us? |
| |
| |
|Deal with your own issues effectively -- Michael certainly dealt with ADHD|
|and his parents' divorce that way. His mother helped him cope up with his |
|condition and channeled his energy into what he loved. |
| |
|Cut out the drama -- Michael's story is inspirational but at the same |
|time, neither the young man nor his family have exploited their |
|experiences to sensationalise his life. They've told it like it is. |
| |
|Zero in on your strengths and overcome your weaknesses -- He was less than|
|an average student at school, but Michael was a passionate and dedicated |
|student of his sport. The young swimmer is known to have studied tapes of |
|his races over and over, zeroing in on mistakes and working towards |
|bettering himself constantly. Excellent is still not good enough. |
| |
|Remain focused on your goals -- At the Athens Olympics back in 2004, |
|Phelps was beaten by teammate Ian Crocker beat in the 100m butterfly. He |
|put up a poster of Crocker in his room to motivate him and keeps a list of|
|his career goals beside his bed. |
| |
|Pursue what you love with passion and put in a genuine effort -- Phelps' |
|dedication to swimming was apparent back when he was nine and began to |
|break national records in his age group. His commitment to what he does |
|has grown with him. |
| |
|It's not just his career and his unbelievable performance at the Olympics |
|that classify Phelps as a winner -- it's his story of inspiration that |
|makes him a real champion, a youth icon, somebody to look up to. |
| |
|SATBIR SINGH |
|PRESIDENT |
|MEMBER JAB WE MET CA |
|REDEFINING PROFESSIONALISM…… |
| |
|--------------------------------------------------------------------------|
************"LEADERS ARE THE READERS,READERS ARE THE LEADERS*************
|At 23, Michael Fred Phelps has become an international sporting sensation.|
| |
|The young American swimmer has smashed seven world records and won eight |
|gold medals at the Beijing [Images] Olympics [Images], the first athlete |
|ever to secure first place so many times at a single Olympics Games. |
| |
|Given his success, it's easy to slot Phelps into the 'born achievers' |
|category -- at 23, he's established a glorious career doing what he loves |
|best, he's a millionaire, a world record-holder and the pride of his |
|nation. |
| |
|But hold on a minute -- is Michael Phelps really a born achiever? |
| |
|He may beg to differ. |
| |
|At the age of seven Phelps, the youngest of three children, was diagnosed |
|with Attention-Deficit Hyperactivity Disorder. For those not familiar with|
|the condition, ADHD is a childhood condition characterised by constant |
|activity, impulsive behaviour and the inability to focus one's attention |
|on anything for a short span of time. |
| |
|ADHD is treated with therapy and medication, but is not classified as |
|curable -- as per information on the website WebMd.com, about 60 percent |
|of afflicted kids carry the condition into adulthood. |
| |
|To help release his pent-up energy and to emulate his older sisters who |
|were also accomplished swimmers, Phelps took up swimming, starting to |
|outshine his peers right from the start. |
| |
|At the age of nine, Michael's parents divorced. His mother brought up all |
|three children single-handedly, encouraging them to follow their dreams at|
|all costs -- one middle-school teacher even told Michael's mother he would|
|never be a success. |
| |
|But successful Phelps is, and how. |
| |
|Yes, there are the occasional set-backs. Like the time back in 2004 when |
|Phelps, then 19, was arrested for driving under the influence of alcohol. |
|He was under the legal drinking age limit of 21 in any case and to top it |
|he was driving in an inebriated state. A repentant Phelps pleaded guilty |
|and was sentenced to 18 months probation, saying in court, "I recognise |
|the seriousness of this mistake. I've learned from this mistake and will |
|continue learning from this mistake for the rest of my life." |
| |
|So who is Michael Phelps? He was a regular kid who struggled with an |
|irregular condition and the divorce of his parents. He's young, he excels |
|at what he does and like the rest of us, slips up once in a while. |
| |
|And what life lessons do his struggles and successes hold for us? |
| |
| |
|Deal with your own issues effectively -- Michael certainly dealt with ADHD|
|and his parents' divorce that way. His mother helped him cope up with his |
|condition and channeled his energy into what he loved. |
| |
|Cut out the drama -- Michael's story is inspirational but at the same |
|time, neither the young man nor his family have exploited their |
|experiences to sensationalise his life. They've told it like it is. |
| |
|Zero in on your strengths and overcome your weaknesses -- He was less than|
|an average student at school, but Michael was a passionate and dedicated |
|student of his sport. The young swimmer is known to have studied tapes of |
|his races over and over, zeroing in on mistakes and working towards |
|bettering himself constantly. Excellent is still not good enough. |
| |
|Remain focused on your goals -- At the Athens Olympics back in 2004, |
|Phelps was beaten by teammate Ian Crocker beat in the 100m butterfly. He |
|put up a poster of Crocker in his room to motivate him and keeps a list of|
|his career goals beside his bed. |
| |
|Pursue what you love with passion and put in a genuine effort -- Phelps' |
|dedication to swimming was apparent back when he was nine and began to |
|break national records in his age group. His commitment to what he does |
|has grown with him. |
| |
|It's not just his career and his unbelievable performance at the Olympics |
|that classify Phelps as a winner -- it's his story of inspiration that |
|makes him a real champion, a youth icon, somebody to look up to. |
| |
|SATBIR SINGH |
|PRESIDENT |
|MEMBER JAB WE MET CA |
|REDEFINING PROFESSIONALISM…… |
| |
|--------------------------------------------------------------------------|
************"LEADERS ARE THE READERS,READERS ARE THE LEADERS*************
Sunday, August 17, 2008
life lovers
THE SON'S PORTRAIT
Kripa had become old. His body had become infirm and weak. Sorrow and age
had wrought havoc on his face and dulled his vision. He had lost his only
son in a battle. The pain had been too much to bear and he had lost the
will to live. One afternoon, a visitor knocked at his door and said "Sir, I
was also a soldier in your son's army regiment. I was with him when he
died. The bullet that was meant for me, actually hit him, because he came
in the way. I owe my life to him. I have painted a portrait of your son;
please accept it as a gift." Kripa was a connoisseur of art. The walls of
his beautiful house were adorned with masterpieces of great value, but this
one touched his heart. It was put above the mantelpiece in a place of
honour.
Many years later, Kripa passed away. His lawyer had a letter that was to be
read out after the cremation. The lawyer said, "Before I read out the Will
regarding the inheritance of the property, I have special instructions
regarding his most valuable property, i.e. his collection of master pieces.
I must auction out the vast collection of paintings and utilize the sum as
directed in the letter. I have been directed to put up for auction, this
portrait of his son first of all." So saying, the old lawyer put up the
portrait of the deceased son that had been presented by the soldier. There
were no takers. Again and again the lawyer called out for someone to name a
price, but no one wanted the crudely painted picture.
The old family gardener came forward; rummaged through his worn out pockets
and said, "I can pay Rs.27/- for it." The lawyer counted "One ... Two ...
Three ... Gone. The portrait is yours." Then he reached into his pocket and
took out an envelope, cut it open and pulled out the Will. It said, "The
entire collection of paintings shall be inherited by the buyer of my son's
portrait. The rest of the property may be auctioned and the proceeds used
for setting up an orphanage for the orphans of war." That was the end of
the auction.
So it is with the Lord. If only we show love towards those whom He loves;
He showers upon us His choicest treasures and blesses us with His grace.
SANJAY TANDON
************"LEADERS ARE THE READERS,READERS ARE THE LEADERS*************
Kripa had become old. His body had become infirm and weak. Sorrow and age
had wrought havoc on his face and dulled his vision. He had lost his only
son in a battle. The pain had been too much to bear and he had lost the
will to live. One afternoon, a visitor knocked at his door and said "Sir, I
was also a soldier in your son's army regiment. I was with him when he
died. The bullet that was meant for me, actually hit him, because he came
in the way. I owe my life to him. I have painted a portrait of your son;
please accept it as a gift." Kripa was a connoisseur of art. The walls of
his beautiful house were adorned with masterpieces of great value, but this
one touched his heart. It was put above the mantelpiece in a place of
honour.
Many years later, Kripa passed away. His lawyer had a letter that was to be
read out after the cremation. The lawyer said, "Before I read out the Will
regarding the inheritance of the property, I have special instructions
regarding his most valuable property, i.e. his collection of master pieces.
I must auction out the vast collection of paintings and utilize the sum as
directed in the letter. I have been directed to put up for auction, this
portrait of his son first of all." So saying, the old lawyer put up the
portrait of the deceased son that had been presented by the soldier. There
were no takers. Again and again the lawyer called out for someone to name a
price, but no one wanted the crudely painted picture.
The old family gardener came forward; rummaged through his worn out pockets
and said, "I can pay Rs.27/- for it." The lawyer counted "One ... Two ...
Three ... Gone. The portrait is yours." Then he reached into his pocket and
took out an envelope, cut it open and pulled out the Will. It said, "The
entire collection of paintings shall be inherited by the buyer of my son's
portrait. The rest of the property may be auctioned and the proceeds used
for setting up an orphanage for the orphans of war." That was the end of
the auction.
So it is with the Lord. If only we show love towards those whom He loves;
He showers upon us His choicest treasures and blesses us with His grace.
SANJAY TANDON
************"LEADERS ARE THE READERS,READERS ARE THE LEADERS*************
GOLDEN QUOTES
What causes the most pain- the mistake or the criticism for the mistake?
satbir singh
PRESIDENT
JAB WE MET CA
REDEFINING PROFSSINALISM....
************"LEADERS ARE THE READERS,READERS ARE THE LEADERS*************
Saturday, August 16, 2008
Prior period expenses
Prior period expenses
IN A recent ruling, the Delhi high court had an occasion to deal with the tax treatment of prior period expenditure. The court held that the question as to the year in which a deduction is allowable may be material when the rate of tax chargeable is different in different years. The court opined that where tax is levied at a uniform rate, it is immaterial whether the deduction is allowed in one assessment year or another. The tax department is not at loss in any event. The high court also observed that the tax department should restrain itself from raising points which do not affect the taxability of the assessee or the tax that the Department is likely to collect from the assessee in one year or other
Thursday, August 14, 2008
Jai Hind
This is our 60th Independence Day!
Freedom is not a Right but a Feeling!
Let's be proud to feel the Freedom!
Let's say loud we are INDIANS!!!
Let all of us get to-gather &
Let's Celebrate Our Freedom!
It is our duty to preserve this Freedom!
Carry this forward to the future!
We did,We do,We will do!!!
Set the celebration on Air, Share your Joy,
Vande Mataram!
Jai Hind
SATBIR SINGH
PRESIDENT JAB WE MET CA
REDEFINING PROFESSIONALISM.......
************"LEADERS ARE THE READERS,READERS ARE THE LEADERS*************
Golden Quotes
Do not just be concerned about your rights, but consider whether or not you
are right.
are right.
SATBIR SINGH
************"LEADERS ARE THE READERS,READERS ARE THE LEADERS*************
Wednesday, August 13, 2008
Golden Quotes
"Problems in the world will increase; therefore, I should increase my capacity for dealing with problems...."
Monday, August 11, 2008
OH GOD!
OH GOD! HELP ME
Marina’s husband had just passed away to a terminal illness. Their savings had been spent to the last penny in trying to save him. She had a fourteen year old daughter and an eleven year old son. Marina’s world had just crumbled to bits. She had no work experience; she was totally a home-bird.Friends and relatives came to console her. Most of them offered, “If there is anything that we can do to help, do let us know”; “You are not alone, we will stand by you.”....A month later, Marina requested one of these friends to help her get a job as a receptionist at a local school. The friend said, “Actually Marina, they really won’t listen to anyone. I would have spoken to the Principal for you, but she is just not the obliging type....”A week later Marina applied for a job as a salesgirl, in a women’s garments store and asked a relative to put in a word for her. “You see Marina, the owner is my friend no doubt, but you are really not the type, I mean, you have to have a certain personality to look after such a job; but if there is anything else, I’m always willing to help.” This went on.... hollow words, meaningless endearments and lame excuses.Till one night, Marina broke down. The next instalment for the school fees of her children was due in a fortnight. The house rent was grossly overdue. Her expenses seemed to soar whereas her resources dwindled. She cried her heart out and prayed, “Oh God! Why did you do this to us? How shall I tend to my children? Please help me for I am absolutely alone.” She cried herself to sleep. In her dream she saw God smiling at her and blessing her.The next morning she found an advertisement in the newspaper for a walk-in-interview to fill the post of a warden for a Boarding school. She walked into the interview room with the confidence that stems only from God’s presence in you. She was offered the job, provided she could move into a residence at the hostel premises, for the warden was supposed to be present all day. The school provided free education to the wards of their employees! The school mess would also provide free meals to her wards and herself. With one stroke, all her problems were solved!
It is only God who stands by His words, when He asks you to surrender your problems to Him and forget about them. But, if you continue to worry about them, He does not take over. To surrender means, to turn your thoughts away from all your problems and leave everything into His hands saying, “Lord, Thy will be done.”When at last you realize that God is all you have left; it is then that you realize that God is all that you really needed!In one discourse Baba said, “Sometimes you feel that disasters increase instead of diminishing! Don’t get agitated. Close your eyes and tell me with faith, “Thy will be done. Thou think of it.” And when you thus speak I even accomplish a miracle when necessary. I always think of you, but I can only help you completely when you rely fully on Me.”
SANJAY TANDON
Recent Service Tax Cases
Service Tax - Nithyananda Electronics Versus Commissioner Of Central Excise Mangalore = 2008
Date of Decision: February 4, 2008 - CESTAT, BANGALORECommissioner (Appeals) rejected the refund claim & confirmed Order-in-Original on ground that the assessee is carrying on the business of marketing & distribution on behalf of M/s. Zee Turner in terms of their Distribution Agreement - appellants not produced OIO as well as the Agreement with M/s. Zee Turner even after giving sufficient opportunities – hence appeal cannot be heard - appeal is rejected granting liberty to the appellants to seek restoration after producing the same
Service Tax - TNS INDIA PVT. LTD. Versus COMMISSIONER OF CENTRAL EXCISE BANGALORE = 2008
Date of Decision: February 4, 2008 - CESTAT, BANGALOREViolation of Principles of Natural Justice – remand order of commissioner is under challenge - terms of reference for remand is beyond the terms of the Show Cause Notice - aspect pertaining to limitation is also not considered - citations relied upon by appelalnts have not been examined – Commissioner (Appeals) shall deal with all the grounds raised by the appellants - appeal is allowed by way of remand to the Commissioner (Appeals) for fresh hearing
Service Tax - Wiptech Peripherals Pvt. Ltd. Versus CCE Rajkot = 2008
Date of Decision: June 27, 2008 - CESTAT AHMEDABADInput credit of service tax denied on the ground that the service tax paid on cell-phone, land-line, courier service cannot be held to be input service for the output service “maintenance & repairs” – held that service tax paid on cell phones or land-lines used in connection with output services is available as credit - some of the cell phones in the name of individuals were not established that they were used in relation to the output services – matter remanded to verify above aspect
Service Tax - Sundaram Brake Linings Ltd. Versus CCE Chennai = 2008
Date of Decision: February 6, 2008 - CESTAT CHENNAIWhether service tax is leviable in the category of “Consulting Engineer’s Service” on the technical know-how fee paid by the appellants to their foreign collaborators for the period 28.2.99 to 31.3.03 - issue is no longer res integra as it stands settled in favour of the assessee by a line of decisions of this Tribunal - Following the consistent view taken by this Tribunal, I set aside the impugned order, wherein tax was demanded in respect of transfer of technical know-how for above period
Service Tax - M/s Industrial Security Agency Versus CCE, Allahabad = 2008
Date of Decision: May 12, 2008 - CESTAT NEW DELHI“Security Agency” service - failure to pay the tax - Commissioner (Appeals) upheld penalty u/s 77 but imposed penalty u/s 76 & 78 by modifying the OIO - appellant was under bonafide belief that it was liable to pay Service Tax only on receipt of the amount from the recipient – impugned order of commissioner (A) is modified further – held that penalty of Rs.1 lac u/s 76 and Rs.1,000 u/s 77 are justified – but penalty u/s 78 is not justified - appeal stands allowed partly
Service Tax - M/s Kurele Industries Versus CCE, Kanpur = 2008
Date of Decision: May 27, 2008 - CESTAT, NEW DELHIDemand - Clearing and Forwarding Agent - During the pendency of the matter before the Commissioner (Appeals), CCE revised Adjudication order & enhanced penalty - Commissioner (Appeals) held that the Appellants are “Commission Agent” not “C/F Agent”, so demand is not sustainable - order of the Commissioner (Appeals) was not challenged by the Revenue before the Appellate Authority - As the demand is not sustainable, enhancement of penalty by the Revision order is also not maintainable
Service Tax - CCE, Allahabad Versus M/s New Govindgarh Steel = 2008
Date of Decision: May 27, 2008 - CESTAT NEW DELHITransportation of goods by road - delay in payment of tax – non-submission of return within the stipulated period - out of penalty imposed u/s 76 & 77, commissioner set aside penalty u/s 77 - Revenue submits that waiver of penalty under Section 77 of the Act is ultra wires – commissioner has dropped penalty u/s 77 only after considering the facts and circumstances of the case, so contention of revenue is not correct - appeal filed by the Revenue is rejected
Central Excise - STRIDES RESEARCH & SPECIALITY CHEM. LTD. Versus C.C.E., MANGALORE = 2008
Date of Decision: June 14, 2007 - CESTAT, BANGALORECenvat credit - Mere for the reason that dealer mentioned incorrect address of appellant factory in invoice, it can’t be said that appellant availed credit irregularly – moreover, dealer has addressed a letter to appellant-assessee that by mistake he put incorrect address in invoice - there is sufficient record to establish that credit had not been availed irregularly – credit not deniable
====================
Income Tax Cases
Income Tax - Geoconsult ZT GmbH = 2008
Date of Decision: August 5, 2008 - AUTHORITY FOR ADVANCE RULINGS
Applicant a foreign company has entered into a JV with two Indian companies. Applicant is providing consulting services in Himachal Pradesh from Austria and for the purpose of coordinate, an engineer was deputed to visit sites in HP - held that the income of applicant is taxable in the capacity of Association of Persons (AOP)
Income Tax - RAJENDRA PRASAD BORAH Versus INCOME-TAX APPELLATE TRIBUNAL AND OTHERS = 2008
Date of Decision: April 3, 2008 - GAUHATI HIGH COURT Tribunal by the impugned order dismissed the appeals solely on the ground that the appellant-assessee had failed to appear before it on the date fixed for hearing – even if the appellant-assessee was absent before the Tribunal, the only course open to it was to dispose of the appeal on the merits - impugned order of the learned Tribunal is interfered with and is quashed
Income Tax - COMMISSIONER OF INCOME-TAX Versus GURUVIJAYA KURI CO. LTD. = 2008
Date of Decision: January 21, 2008 - KERALA HIGH COURT
Penalty u/s 271 - assessee derived income from chitty business & showed credit balance in balance-sheet in respect of kuries terminated during 1977 to 1983 – AO opined that amount of auction discounts forgone by defaulter subscribers was income of assessee – assessee failed to offer any explanation – assessee was aware that impugned amount didn’t represent liability – burden is not on department to prove concealment - penalty is justified for concealment of income
Income Tax - COMMISSIONER OF INCOME-TAX Versus RAVINDRA PLATINUM P. LTD. = 2008
Date of Decision: May 13, 2008 - RAJASTHAN HIGH COURTBusiness expenditure – assessee was not required to pay to Govt. the sales tax collected by it under Tax Deferment Scheme – during this interregnum the amount of sales tax collected was deemed to have been actually collected by Govt and disbursed as loan to assessee – assessee had certificate issued, showing that certain amount of tax collected had been converted into loan, hence assessee is entitled to deduction, as the sum was to be treated as paid for purpose of section 43B
BE POSITIVE
BE POSITIVE
Father : "I want you to marry a girl of my choice"
Son : "I will choose my own bride!"
Father : "But the girl is Bill Gates's daughter."
Son : "Well, in that case...ok"
Next - Father approaches Bill Gates.
Father : "I have a husband for your daughter."
Bill Gates : "But my daughter is too young to marry!"
Father : "But this young man is a vice-president of the World Bank."
Bill Gates : "Ah, in that case...ok" Finally Father goes to see the president of the World Bank. Father : "I have a young man to be recommended as a vice-president."
President : "But I already have more vice- presidents than I need!"
Father : "But this young man is Bill Gates's son-in-law."
President : "Ah, in that case...ok" This is how business is done!!
Moral: Even If you have nothing,You can get Anything. But your attitude should be positive
Think +++++++ve
by DIVYA
MEMEBR JAB WE MET CA
Saturday, August 9, 2008
Pros and Cons of Adopting IFRS
Pros and Cons of Adopting IFRS as Indian Standards
The use of international financial reporting standards (IFRS) as a universal financial reporting language is gaining momentum across the globe. ICAI has released a concept paper on Convergence with IFRS in India, detailing the strategy for adoption of IFRS in India with effect from April 1, 2011. This has been strengthened by a recent announcement from the ministry of corporate affairs (MCA) confirming the agenda for convergence with IFRS in India by 2011.
Even in the US there is an ongoing debate regarding the adoption of IFRS replacing US-GAAP.
Adopting IFRS by Indian corporates is going to be very challenging but at the same time could also be rewarding.
There are likely to be several benefits to corporates:
Improvement in comparability of financial information and financial performance with global peers and industry standards.
The adoption of IFRS is expected to result in better quality of financial reporting due to consistent application of accounting principles and improvement in reliability of financial statements.
This will lead to increased trust and reliance placed by investors, analysts and other stakeholders in a company’s financial statements.
Better access to and reduction in the cost of capital raised from global capital markets since IFRS are now accepted as a financial reporting framework.
A recent decision by the US Securities and Exchange Commission (SEC) permits foreign companies listed in the US to present financial statements in accordance with IFRS. This means that such companies will not be required to prepare separate financial statements under Generally Accepted Accounting Principles in the US (US GAAP).
Therefore, Indian companies listed in the US would benefit from having to prepare only a single set of IFRS compliant financial statements, and the consequent saving in financial and compliance costs.
The use of international financial reporting standards (IFRS) as a universal financial reporting language is gaining momentum across the globe. ICAI has released a concept paper on Convergence with IFRS in India, detailing the strategy for adoption of IFRS in India with effect from April 1, 2011. This has been strengthened by a recent announcement from the ministry of corporate affairs (MCA) confirming the agenda for convergence with IFRS in India by 2011.
Even in the US there is an ongoing debate regarding the adoption of IFRS replacing US-GAAP.
Adopting IFRS by Indian corporates is going to be very challenging but at the same time could also be rewarding.
There are likely to be several benefits to corporates:
Improvement in comparability of financial information and financial performance with global peers and industry standards.
The adoption of IFRS is expected to result in better quality of financial reporting due to consistent application of accounting principles and improvement in reliability of financial statements.
This will lead to increased trust and reliance placed by investors, analysts and other stakeholders in a company’s financial statements.
Better access to and reduction in the cost of capital raised from global capital markets since IFRS are now accepted as a financial reporting framework.
A recent decision by the US Securities and Exchange Commission (SEC) permits foreign companies listed in the US to present financial statements in accordance with IFRS. This means that such companies will not be required to prepare separate financial statements under Generally Accepted Accounting Principles in the US (US GAAP).
Therefore, Indian companies listed in the US would benefit from having to prepare only a single set of IFRS compliant financial statements, and the consequent saving in financial and compliance costs.
disadvantages:-However, the perceived benefits from IFRS adoption are based on the experience of IFRS compliant countries in a period of mild economic conditions. The current decline in market confidence in India and overseas coupled with tougher economic conditions may present significant challenges to Indian companies.
IFRS requires application of fair value principles in certain situations and this would result in significant differences from financial information currently presented, especially relating to financial instruments and business combinations.
Given the current economic scenario, this could result in significant volatility in reported earnings and key performance measures like EPS and P/E ratios.
Indian companies will have to build awareness amongst investors and analysts to explain the reasons for this volatility in order to improve understanding, and increase transparency and reliability of their financial statements.
This situation is worsened by the lack of availability of professionals with adequate valuation skills, to assist Indian corporates in arriving at reliable fair value estimates. This will render some of the benefits of IFRS adoption ineffective.
Please Visit the Blog : International Financial Reporting Standards
IFRS requires application of fair value principles in certain situations and this would result in significant differences from financial information currently presented, especially relating to financial instruments and business combinations.
Given the current economic scenario, this could result in significant volatility in reported earnings and key performance measures like EPS and P/E ratios.
Indian companies will have to build awareness amongst investors and analysts to explain the reasons for this volatility in order to improve understanding, and increase transparency and reliability of their financial statements.
This situation is worsened by the lack of availability of professionals with adequate valuation skills, to assist Indian corporates in arriving at reliable fair value estimates. This will render some of the benefits of IFRS adoption ineffective.
Please Visit the Blog : International Financial Reporting Standards
Sunday, August 3, 2008
FUNNY LINES
FUNNY LINES IN LEAVE APPLICATION
Letter writing:- "I am well here and hope you are also in the same well
A candidate's job application: "This has reference to your advertisement calling for a ' Typist and an Accountant - Male or Female'.... As I am both(!! )for the past several years and I can handle both with good experience, I am applying for the post.
TO BE CONTINUED TOMORROW.......
“ENJOY TODAY ,WAIT FOR BEAUTIFUL TOMORROW ”
BALD HEADED
BALD HEADED
There was tension in the air as mother stood behind her daughter’s chair in the dinning room. Today’s menu for lunch was jackfruit and curd with Roti. The little girl had her eyes and her plate full. She refused to eat the jackfruit. Mother was equally adamant. She would have to eat it! There was no way that mother was going to let the girl leave the table without eating the much detested vegetable. How else would she learn to eat all kinds of vegetables? The father had promised his wife that he would let her take the forefront when it came to discipline, so he watched in silence. Grandma looked disgusted at the attitude of the mother. The tension was unnerving.The poor child looked at the revolting mass in her plate and felt that if she ate it, she would definitely throw up. Suddenly she said, “Okay, if I eat it, will you grant me a wish?” Father grabbed the opportunity to resolve the situation and said quickly, “Yes honey, whatever you say. Just finish it fast and tell me what you want. I’ll get it for you.” The girl said, “It may not be a ‘thing’. It may be something else.” Father said, “Don’t worry; I’ve given you my promise. Now gobble it up.” The girl put a spoonful of jackfruit into her mouth and made a face as if she was tasting poison. The mother said, “See that you don’t go overboard in asking for a wish. After all, it’s just a bowl of jackfruit. It’s not such a big deal after all!”The girl ate it all up, washed it down with a whole glass of water and then said quickly, “I want to get my head shaved!”Mother’s spoon fell from her hand, with a clatter and grandma almost fainted. “What rubbish! That’s impossible; don’t even dream about it. Silly girl!” said mother. For once Grandma seemed to see eye to eye with her daughter in law but chose to keep silent. Father said, “Look my child, this is quite a ridiculous thing to ask for; be reasonable and I shall surely let you have your way.” But the girl was adamant. “Daddy you promised me. You gave me your word. It was a bargain.” Daddy said, “But darling you shall look obnoxious. Why don’t we buy you a nice Barbie doll instead?” “But I don’t want a doll; I just want to get my head shaved. You have always taught me about the value of honouring your word, what about that now? You are going back on your word. It’s so unfair!” she said in a trembling voice.Looking at the little girl’s tear filled eyes, Daddy’s heart melted, although he could not make out head or tail of why she wanted to do such a weird thing. He said, “She has done her part. If we do not honour our word, she will never learn to honour hers. And how does it matter anyway? Its just hair! It will grow back. What’s the big deal about it?” Mother said, “Who ever heard of a girl getting her head shaved? I will not allow it.” Father stood his ground. “No,” he said. “You had your way; now don’t be unfair to her and stop making a fuss!”Father took the girl to the barber and got the job done. Later in the evening, he took her to the park to play as he did every evening. A short while later a boy came to the park. Father was surprised to note that the boy too had no hair on his head. He did not understand, was this the latest fashion or what? Just then a lady, apparently the bald boy’s mother came up to him and said, “You have quite a daughter. She promised my son that she would get her head shaved, so that the other children at the park would not jeer at him. But I never thought she would actually live up to it.”The man was even more confused now, “But, why did your son have to get his head shaved?” he asked. She tried to smile bravely and said, “Oh no! My son did not have to get his head shaved. You see he has leukaemia. During the chemotherapy he lost all his hair and was refusing to come out of the house. He was afraid that the other children would make fun of him. But your daughter coaxed him on the phone to come today, saying that she too would come with her head shaved to make sure that no body laughed at him!”That is love! Pure and simple! No strings attached! Truly, the most precious things in life can not be made or bought, they are gifted to us by God; we just have to realize how precious they are.
SANJAY TANDON
Warren Buffet's- Golden Rules
CONITNUED FROM YESTARDAY......
SUCCESSFUL INVESTORS
To be successful, investors needed to do just a few
things well. One was investing only in companies that were within their
circle of competence.
GOOD ECONOMIST
“to be a good investor,one also needs to be a good economist.”
MEASURING STICK
“In Williams theory we have to decide what Should be the discount rate? Accoring to William his readers could determine for themselves what would be appropriate. But Buffett’s measuring stick is very straightforward: He uses either the interest rate for long term (meaning ten-year) U.S. bonds, or when interest rates are very low he uses the average cumulative rate of return of the overall stock market.”
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'short-term capital asset'.
Simplification of capital gains- prescribe a minimum holding period to treat any assets as a 'short-term capital asset'.
Summary:
Different rate of tax , different tax implications permissibility of set off of losses during the previous year, carry forward and set off in future etc. in relation to dealings in shares and securities and other assets have always led to litigation. It is desirable that the law should be clear and specific on such vital issues. A minimum period of holding can be prescribed for different asset to be regarded as short term capital assets to avoid controversies and litigation.
The scope of the article:
This article is basically written in connection with treatment of certain liquid assets as trading assets or capital asset (investment account). Some suggestions have also been placed to make the legal provisions clear and unambiguous. The circulars say about various criteria, and nothing is said in conclusive terms. This lead to state of great confusion and dilemma. The compliance is also not possible in view of large number of assessments being made as per return.
Different circumstances:
The revenue wants to increase revenue collection and tax payer wants to reduce tax liability. Therefore, in same and similar circumstances the revenue and taxpayer will try to choose best possible tax treatment in relation to activity of buying and selling securities.
Reasons for difference of approach:
A tax payer may contend to treat activity as business activity and resultant income as business income to gain tax advantage in the following illustrative situations:
a. An FII not having a Permanent Establishment (PE) in India may like to treat income from buying, holding and selling assets as business activity to gain tax advantage of lower tax in his home country. For example see Fidelity Northstar Fund , In re 288 ITR (2007) 641 (AAR) and several cases referred to therein.
b. An individual who want to take advantage of benefit on investment covered under section 80C as well as tax rebate u/s 88E for security transaction tax (STT) paid on security transactions and not to pay any income tax may prefer to treat activity as business activity instead of investment activity.
c. An assessee who wants to set off past business losses and also to take advantage of tax rebate for STT paid on security transactions may prefer to treat the profit as business profit instead of short term capital gains.
d. An assessee who also want to take advantage of loss arising due to lower valuation of assets at year end may prefer to treat the activity as business activity so as to reduce taxable income due to fall in valuation of assets which can be considered as stock-in-trade with option to value at a price lower than cost.
e. To get benefit of loss suffered in buying and selling securities and other capital assets and set off the same against other incomes.
In the following illustrative situations assessee may prefer to treat the activity as investment activity:
When assessee has other income to avail full benefits available for tax rebate, past losses etc. and has to pay tax which will be lower if income is considered as short term capital gains instead of business income.
The non-existence of situations discussed in earlier para will lead to advantage in case income is considered as short-term capital gain instead of business income.
c. When the assessee do not want to get his accounts audited under section 44AB of the income tax act for any reason ( say lapse of period for filing return) and to obtain and furnish Tax audit report.
The revenue's stand will be opposite:
In above situations the stand of the revenue will be opposite with a view to collect higher tax. As a result if assessee want to claim activity as business the revenue may try to bring it under capital gain and vice versa.
Types of shares in the context: -
In the context of determining character of share as a trading share or a share held as investment the following type of shares are found:
Shares of unlisted companies:
These shares are held by people in management and their associates and are not traded on stock exchange. Therefore, in most of the cases such shares are held as investment. In case of private limited companies there is restriction on transfer of shares and therefore, those shares must generally be regarded as investment. In case of public limited companies whose shares are not listed the general treatment should be of investment and not as stock-in-trade.
However, some people like share trader, share broker, underwriters etc. in some circumstances or due to likely event of change in management or forthcoming public issue etc. may acquire shares with a view to trade in the same within a short duration and the holder may choose to treat such shares though unquoted as stock-in-trade.
Shares listed on stock exchange - Shares listed on stock exchange are considered to be liquid and easily transferable. However, that also may not be true in practice always. We find that even in case of listed shares the following categories can be found.
a) Regularly traded shares- In this category also we find some share which have enough fluctuation in price and there is lot of volume of trading and there are other types of shares which have very low volume of shares. Some examples of shares based on volume in trading can be found in any days news papers.
b) Casually or rarely traded shares: We find some shares which are traded very casually and the volume is also low, a person who purchases such shares generally will have to hold the shares as investment at least for short duration.
c) Shares listed on regional stock exchanges only - We find some shares, which are listed on regional stock exchanges only and have very low liquidity.
Liquidity a factor to be considered:
Liquidity of shares is also an important factor to determine the character as stock or investment. Share which are not frequently traded or which have very low volume at stock exchange can best be considered as investment.
Even in very highly liquid shares on stock exchanges, some type of holders like promoters and directors may hold shares for control of the company, and therefore those shares will always be capital assets and cannot be regarded as stock-in-trade.
Highly liquid shares:
shares which have high liquidity, causes a difficulty to determine character of stock or investment. This is so because within a short duration an investor may find desired appreciation and wish to realize his appreciation in investment. Similarly if for some reasons price has fallen considerably, the investor may transfer the investment so as to realize remainder of his capital and reduce further capital erosion.
Dividend yield:
Investments by way of debentures and bonds or deposits yield safe, secured but low returns. Therefore, in case of investment in shares appreciation of even 5-7 % in a short duration can be considered as a good return on investment and not necessarily result of trading in share. It can be said that practically most of share trader or investor purchases shares for gain by way of appreciation and not necessarily for dividend. This can be justified because overall yield by way of dividend is hardly around 1%.
Short term capital asset:
Any minimum period of holding is not prescribed for treatment of asset as a capital asset. Therefore, holding of any period qualify an asset to be regarded as a short-term capital asset. In fact recently Tribunal has decided a case in which it is considered that property was purchased and sold on the same day when promoter directly gave possession to the ultimate buyer in view of agreement for transfer of booking of property during construction stage. See Mrs. Mangala Dilip Sable V JCIT (2007) 104 ITD 204 (Pune).
In relation to shares and other listed securities units of mutual funds etc. a holding period of twelve months makes them long term capital asset as against thirty six months for other assets. Thus, in law itself it has been considered that shares are a means of investment for short duration in comparison to other assets. Considering the holding period for long term asset it can be considered that under law any period of holding is enough to treat the capital asset as a short term capital asset. Shares may be held in physical form with blank transfer deeds, or duly registered in physical form or in own depository account or in account of depository of the share broker or the financier. If shares are purchased and held for any moment, they can be considered as short term capital assets, if they are not treated as stock-in-trade by the owner.
Economic situations may change very fast:
In current times situation may change very fast. For a recent example we can take case of shares of sugar companies. They appreciated in price very fast and on average by four times within a period of about fifteen months and then within a period of about four five month declined and prices of many sugar companies shares has come down to about one fourth of peak price achieved during last fifteen months. This is due to fall in price of sugar and Crude oil resulting into lower price of ethanol - to be produced by sugar mills in large scale in near future.
Investment - an adventure in nature to commerce:
The term 'business' included not only trading activity but also any adventure in nature of trade, commerce or industry. Investment activity is not a trading activity but is definitely an adventure in nature of commerce. Therefore, investment activity is also a business within the inclusive definition of 'business' given in section 2 (13) of the income-tax Act, 1961.
In the present days due to several investment opportunities available and fast changes therein it can be said that investment activity itself is in nature of adventure in nature of commerce. In case of shares in a single day one can get appreciation or loose significantly because the price fluctuation may be very high on a particular day.
It is difficult to ascertain the intention when a share is bought and sold within a short duration because suppose within two to three days we can get appreciation of 5 to 10 % we may be tempted to transfer the share and realize appreciation though at the time of purchase there may have been intention to hold the shares for longer duration. Similarly if price starts falling one may sell to reduce further losses without waiting for a trend reversal.
Various tests are not universally applicable or full proof:
The Courts have held several tests to examine whether a person is share-trader or an investor. Tests as laid down in the circular issued by the Board being instruction No.1827 dated 31.08.1989 now stands out-dated because of change in circumstances. Because of open economy, influence of share market world over and also global commodity markets world over, the circumstances have totally changed. Share market is based on news relating to companies as well as commodities - raw materials used by companies and finished goods produced. Furthermore, online speculation activity in commodities have also increased. All these factors have changed the situation very significantly. Therefore, application of a list of tests will be very much cumbersome, confusing and arbitrary situation and it will involve lot of litigation. The persons whose returns are accepted and the persons whose returns are selected for scrutiny will be put altogether on different basis of criteria and it will deny justice.
For example merely because one borrow money and invests in shares and securities cannot be regarded as trader. He may have perception that he will get return by way of appreciation in share price within two years which will be more than interest payable for two years. Whether interest will be allowed or not that is a different question, but merely use of borrowed funds cannot be conclusive to determine nature of activity.
In fact the circular itself , interalia, states as follows:
"The Assessing Officers are also advised that no single criterion listed above is decisive and total effect of all these criteria should be considered to determine the nature of activity."
Thus, mere issuance of a list of several factors would not make things clear.
Summary assessment procedures will not be effective:
Most of the return of income are now accepted by the revenue. Therefore, the returns which are accepted by the revenue will not be examined as per guidelines. Whereas in similar circumstances, other return which is examined under scrutiny procedure will be applied different tests by the A.O.
It is likely that the A.O. will apply double standards - in some cases where benefit of set off of business loss is claimed the A.O. will try to bring transactions under short-term capital loss category, and cases where lower tax liability is claimed the A.O. will try to bring the same in business category to demand higher tax. However nothing would be perfectly correct because the application of several tests as laid down by the board would be subject to personal preferences and prejudices.
In case there is so much requirement to examine controversy about treatment as stock or investment, a large portion of returns may require compulsory scrutiny. In many cases the A.O. may form an opinion about escapement of tax and issue notice for reassessment. Because wherever, there is some transactions in assets the A.O. may like to examine them in a manner opposite to one taken by the assessee.
Suggestion - In view of the above discussion the following suggestions are put forth for consideration of the Hon'ble Finance Minister.
a) Shares of private limited companies, unquoted companies, co-operative societies etc. must always be regarded as investment and not as stock-in-trade.
b) A period of 15- 30 days holding in case of shares and securities may be prescribed as minimum holding period for its treatment as capital asset.
c) Sale of any capital assets with less than prescribed period may be regarded as a trading activity and income or loss arising from such sale may be regarded as income from business or profession.
Definition of capital asset -
Even case of assets other than shares we find that units of mutual funds, bonds and debentures, paintings, gold and silver coins etc. may be transferred after a short duration of holding. Sometimes, even landed properties may be sold within a short duration. For most of assets, the period of holding is 36 months to make them long term capital asset. However, there is no period prescribed for treating the same as a short term capital asset and in those cases also the same problem of determining the character as trading stock or as investment arises and different views are possible. Lot of litigation have already taken place on such matters and things are not yet clear. To overcome this situation it is requested that any asset held for less than prescribed period may not be considered a capital asset.
To summarize:
Meaning of 'capital asset' may be amended to exclude any asset which has not been held for at least prescribed number of days. Different number of days may prescribed for different type of assets for example:
Shares and securities - 30 days.
Gold, silver, precious stones 60 days.
Landed properties 180 days.
In section 28 a new clause may be inserted to provide that profit on sale of any assets which is not a capital asset due to lower holding period, shall be deemed as business income irrespective of fact whether the asset is treated as stock-in-trade or not in the books of account, if any, maintained by the assessee.
Intra day trading (may be in nature of hedging in relation to capital assets) can be considered as business in all cases.
Accounting treatment of assessee as stock-in-trade of any asset may be considered as conclusive.
About the Author: -
Uma Kothari
BA.(H),AICWA,ACS
Summary:
Different rate of tax , different tax implications permissibility of set off of losses during the previous year, carry forward and set off in future etc. in relation to dealings in shares and securities and other assets have always led to litigation. It is desirable that the law should be clear and specific on such vital issues. A minimum period of holding can be prescribed for different asset to be regarded as short term capital assets to avoid controversies and litigation.
The scope of the article:
This article is basically written in connection with treatment of certain liquid assets as trading assets or capital asset (investment account). Some suggestions have also been placed to make the legal provisions clear and unambiguous. The circulars say about various criteria, and nothing is said in conclusive terms. This lead to state of great confusion and dilemma. The compliance is also not possible in view of large number of assessments being made as per return.
Different circumstances:
The revenue wants to increase revenue collection and tax payer wants to reduce tax liability. Therefore, in same and similar circumstances the revenue and taxpayer will try to choose best possible tax treatment in relation to activity of buying and selling securities.
Reasons for difference of approach:
A tax payer may contend to treat activity as business activity and resultant income as business income to gain tax advantage in the following illustrative situations:
a. An FII not having a Permanent Establishment (PE) in India may like to treat income from buying, holding and selling assets as business activity to gain tax advantage of lower tax in his home country. For example see Fidelity Northstar Fund , In re 288 ITR (2007) 641 (AAR) and several cases referred to therein.
b. An individual who want to take advantage of benefit on investment covered under section 80C as well as tax rebate u/s 88E for security transaction tax (STT) paid on security transactions and not to pay any income tax may prefer to treat activity as business activity instead of investment activity.
c. An assessee who wants to set off past business losses and also to take advantage of tax rebate for STT paid on security transactions may prefer to treat the profit as business profit instead of short term capital gains.
d. An assessee who also want to take advantage of loss arising due to lower valuation of assets at year end may prefer to treat the activity as business activity so as to reduce taxable income due to fall in valuation of assets which can be considered as stock-in-trade with option to value at a price lower than cost.
e. To get benefit of loss suffered in buying and selling securities and other capital assets and set off the same against other incomes.
In the following illustrative situations assessee may prefer to treat the activity as investment activity:
When assessee has other income to avail full benefits available for tax rebate, past losses etc. and has to pay tax which will be lower if income is considered as short term capital gains instead of business income.
The non-existence of situations discussed in earlier para will lead to advantage in case income is considered as short-term capital gain instead of business income.
c. When the assessee do not want to get his accounts audited under section 44AB of the income tax act for any reason ( say lapse of period for filing return) and to obtain and furnish Tax audit report.
The revenue's stand will be opposite:
In above situations the stand of the revenue will be opposite with a view to collect higher tax. As a result if assessee want to claim activity as business the revenue may try to bring it under capital gain and vice versa.
Types of shares in the context: -
In the context of determining character of share as a trading share or a share held as investment the following type of shares are found:
Shares of unlisted companies:
These shares are held by people in management and their associates and are not traded on stock exchange. Therefore, in most of the cases such shares are held as investment. In case of private limited companies there is restriction on transfer of shares and therefore, those shares must generally be regarded as investment. In case of public limited companies whose shares are not listed the general treatment should be of investment and not as stock-in-trade.
However, some people like share trader, share broker, underwriters etc. in some circumstances or due to likely event of change in management or forthcoming public issue etc. may acquire shares with a view to trade in the same within a short duration and the holder may choose to treat such shares though unquoted as stock-in-trade.
Shares listed on stock exchange - Shares listed on stock exchange are considered to be liquid and easily transferable. However, that also may not be true in practice always. We find that even in case of listed shares the following categories can be found.
a) Regularly traded shares- In this category also we find some share which have enough fluctuation in price and there is lot of volume of trading and there are other types of shares which have very low volume of shares. Some examples of shares based on volume in trading can be found in any days news papers.
b) Casually or rarely traded shares: We find some shares which are traded very casually and the volume is also low, a person who purchases such shares generally will have to hold the shares as investment at least for short duration.
c) Shares listed on regional stock exchanges only - We find some shares, which are listed on regional stock exchanges only and have very low liquidity.
Liquidity a factor to be considered:
Liquidity of shares is also an important factor to determine the character as stock or investment. Share which are not frequently traded or which have very low volume at stock exchange can best be considered as investment.
Even in very highly liquid shares on stock exchanges, some type of holders like promoters and directors may hold shares for control of the company, and therefore those shares will always be capital assets and cannot be regarded as stock-in-trade.
Highly liquid shares:
shares which have high liquidity, causes a difficulty to determine character of stock or investment. This is so because within a short duration an investor may find desired appreciation and wish to realize his appreciation in investment. Similarly if for some reasons price has fallen considerably, the investor may transfer the investment so as to realize remainder of his capital and reduce further capital erosion.
Dividend yield:
Investments by way of debentures and bonds or deposits yield safe, secured but low returns. Therefore, in case of investment in shares appreciation of even 5-7 % in a short duration can be considered as a good return on investment and not necessarily result of trading in share. It can be said that practically most of share trader or investor purchases shares for gain by way of appreciation and not necessarily for dividend. This can be justified because overall yield by way of dividend is hardly around 1%.
Short term capital asset:
Any minimum period of holding is not prescribed for treatment of asset as a capital asset. Therefore, holding of any period qualify an asset to be regarded as a short-term capital asset. In fact recently Tribunal has decided a case in which it is considered that property was purchased and sold on the same day when promoter directly gave possession to the ultimate buyer in view of agreement for transfer of booking of property during construction stage. See Mrs. Mangala Dilip Sable V JCIT (2007) 104 ITD 204 (Pune).
In relation to shares and other listed securities units of mutual funds etc. a holding period of twelve months makes them long term capital asset as against thirty six months for other assets. Thus, in law itself it has been considered that shares are a means of investment for short duration in comparison to other assets. Considering the holding period for long term asset it can be considered that under law any period of holding is enough to treat the capital asset as a short term capital asset. Shares may be held in physical form with blank transfer deeds, or duly registered in physical form or in own depository account or in account of depository of the share broker or the financier. If shares are purchased and held for any moment, they can be considered as short term capital assets, if they are not treated as stock-in-trade by the owner.
Economic situations may change very fast:
In current times situation may change very fast. For a recent example we can take case of shares of sugar companies. They appreciated in price very fast and on average by four times within a period of about fifteen months and then within a period of about four five month declined and prices of many sugar companies shares has come down to about one fourth of peak price achieved during last fifteen months. This is due to fall in price of sugar and Crude oil resulting into lower price of ethanol - to be produced by sugar mills in large scale in near future.
Investment - an adventure in nature to commerce:
The term 'business' included not only trading activity but also any adventure in nature of trade, commerce or industry. Investment activity is not a trading activity but is definitely an adventure in nature of commerce. Therefore, investment activity is also a business within the inclusive definition of 'business' given in section 2 (13) of the income-tax Act, 1961.
In the present days due to several investment opportunities available and fast changes therein it can be said that investment activity itself is in nature of adventure in nature of commerce. In case of shares in a single day one can get appreciation or loose significantly because the price fluctuation may be very high on a particular day.
It is difficult to ascertain the intention when a share is bought and sold within a short duration because suppose within two to three days we can get appreciation of 5 to 10 % we may be tempted to transfer the share and realize appreciation though at the time of purchase there may have been intention to hold the shares for longer duration. Similarly if price starts falling one may sell to reduce further losses without waiting for a trend reversal.
Various tests are not universally applicable or full proof:
The Courts have held several tests to examine whether a person is share-trader or an investor. Tests as laid down in the circular issued by the Board being instruction No.1827 dated 31.08.1989 now stands out-dated because of change in circumstances. Because of open economy, influence of share market world over and also global commodity markets world over, the circumstances have totally changed. Share market is based on news relating to companies as well as commodities - raw materials used by companies and finished goods produced. Furthermore, online speculation activity in commodities have also increased. All these factors have changed the situation very significantly. Therefore, application of a list of tests will be very much cumbersome, confusing and arbitrary situation and it will involve lot of litigation. The persons whose returns are accepted and the persons whose returns are selected for scrutiny will be put altogether on different basis of criteria and it will deny justice.
For example merely because one borrow money and invests in shares and securities cannot be regarded as trader. He may have perception that he will get return by way of appreciation in share price within two years which will be more than interest payable for two years. Whether interest will be allowed or not that is a different question, but merely use of borrowed funds cannot be conclusive to determine nature of activity.
In fact the circular itself , interalia, states as follows:
"The Assessing Officers are also advised that no single criterion listed above is decisive and total effect of all these criteria should be considered to determine the nature of activity."
Thus, mere issuance of a list of several factors would not make things clear.
Summary assessment procedures will not be effective:
Most of the return of income are now accepted by the revenue. Therefore, the returns which are accepted by the revenue will not be examined as per guidelines. Whereas in similar circumstances, other return which is examined under scrutiny procedure will be applied different tests by the A.O.
It is likely that the A.O. will apply double standards - in some cases where benefit of set off of business loss is claimed the A.O. will try to bring transactions under short-term capital loss category, and cases where lower tax liability is claimed the A.O. will try to bring the same in business category to demand higher tax. However nothing would be perfectly correct because the application of several tests as laid down by the board would be subject to personal preferences and prejudices.
In case there is so much requirement to examine controversy about treatment as stock or investment, a large portion of returns may require compulsory scrutiny. In many cases the A.O. may form an opinion about escapement of tax and issue notice for reassessment. Because wherever, there is some transactions in assets the A.O. may like to examine them in a manner opposite to one taken by the assessee.
Suggestion - In view of the above discussion the following suggestions are put forth for consideration of the Hon'ble Finance Minister.
a) Shares of private limited companies, unquoted companies, co-operative societies etc. must always be regarded as investment and not as stock-in-trade.
b) A period of 15- 30 days holding in case of shares and securities may be prescribed as minimum holding period for its treatment as capital asset.
c) Sale of any capital assets with less than prescribed period may be regarded as a trading activity and income or loss arising from such sale may be regarded as income from business or profession.
Definition of capital asset -
Even case of assets other than shares we find that units of mutual funds, bonds and debentures, paintings, gold and silver coins etc. may be transferred after a short duration of holding. Sometimes, even landed properties may be sold within a short duration. For most of assets, the period of holding is 36 months to make them long term capital asset. However, there is no period prescribed for treating the same as a short term capital asset and in those cases also the same problem of determining the character as trading stock or as investment arises and different views are possible. Lot of litigation have already taken place on such matters and things are not yet clear. To overcome this situation it is requested that any asset held for less than prescribed period may not be considered a capital asset.
To summarize:
Meaning of 'capital asset' may be amended to exclude any asset which has not been held for at least prescribed number of days. Different number of days may prescribed for different type of assets for example:
Shares and securities - 30 days.
Gold, silver, precious stones 60 days.
Landed properties 180 days.
In section 28 a new clause may be inserted to provide that profit on sale of any assets which is not a capital asset due to lower holding period, shall be deemed as business income irrespective of fact whether the asset is treated as stock-in-trade or not in the books of account, if any, maintained by the assessee.
Intra day trading (may be in nature of hedging in relation to capital assets) can be considered as business in all cases.
Accounting treatment of assessee as stock-in-trade of any asset may be considered as conclusive.
About the Author: -
Uma Kothari
BA.(H),AICWA,ACS
RECENT CASES
RECENT SERVICE TAX CASES
Service Tax - S. B. ENTERPRISES Versus COMMR. OF C. EX., COCHIN = 2008 Date of Decision: February 18, 2008 - CESTAT BANGALORE
No evidence to say that the appellant carried out clearing and forwarding activities on behalf of the Principal - held that mere procuring or booking orders for the Principal by an agent on a payment of commission basis would not amount to providing services as clearing and forwarding agent within the meaning of definition of that expression under Section 65(25)
Service Tax - NATIONAL ENGG. INDUSTRIES LTD. Versus COMMR. OF C. EX., JAIPUR = 2008 Date of Decision: December 13, 2007 - CESTAT, NEW DELHI
Tax wrongly paid on the commission got from foreign Co. through Indian railways under Business Auxiliary service - Rule 3 of Export of Services Rule, exempts export of service - contract reveals that the appellant would be paid USD equipment to non-convertible Indian Rupee at the Rate of Exchange prevailing on the date of supply order - equivalent amount of foreign exchange payable to the appellant was not released to the Indian Railways, so appellant complied with Rule 3(1)(b) -refund allowed
Service Tax - COMMR. OF C. EX., LUDHIANA Versus CITY CABLE = 2008 Date of Decision: April 7, 2008 - CESTAT, NEW DELHI
Application by revenue seeking grant of stay of order of Commissioner (A) setting aside the penalties - Commissioner observed that entire tax with interest was deposited before SCN so penalty is not justified - stay of the Commissioner order would enable Dept. to realise dues, which would not be proper without adjudication on merit by the Tribunal - At this stage, we are not inclined to go into the question of propriety of the imposition of penalty, so application is rejected
Service Tax - NCR CORPORATION INDIA PVT. LTD. Versus CST, BANGALORE = 2008 Date of Decision: May 16, 2008 - CESTAT BANGALORE
Appellants supplied Automatic Teller Machines (ATMs) for the period from July 2003 to March 2005 – Revenue contended that appellants rendered the cash replenishment services & caretaker services for the above period and these would fall under Business Auxiliary Service - automatic teller machine services came under the Tax net only w.e.f. 1.5.2006 and also the cash replenishment has also been included in the said services - hence tax cannot be levied for the period prior to that date
Service Tax - RAJINDER KUMAR Versus COMMR. OF C. EX., CHANDIGARH = 2008 Date of Decision: April 17, 2008 - CESTAT, NEW DELHI
Demand is confirmed on the ground that the applicants were providing business auxiliary service to the petroleum company - Contention of the applicants is that establishment expenses are being reimbursed to them by the company, and therefore, that portion cannot be added for charging service tax on the business auxiliary service - applicants are directed to deposit Rs. 35,000/-each in addition to the amount already deposited by the applicants – stay partly granted
Service Tax - COMMISSIONER OF C. EX., JAIPUR-I Versus TARGET INSTITUTION OF COMPETITION = 2008 Date of Decision: February 25, 2008 - CESTAT, NEW DELHI
Assessee obtained the registration on 27-7-04 and did not pay the tax but they recorded the fees in their records - no material for suppression of facts with intent to evade payment of tax so penalty u/s 78 is not justified - new levy on coaching centre and there was a dispute regarding availability of the exemption benefit and the respondent paid the tax before issue of SCN so imposition of penalty u/s 76 is excessive, so it is reduced
Service Tax - COMMISSIONER OF C. EX., LUDHIANA Versus BHANDARI HOSIERY EXPORTS LTD. = 2008 Date of Decision: February 19, 2008 - CESTAT, NEW DELHI
Import of services – assessee, service recipient - demand for the period from 9.2.2004 to February, 2006 prior to introduction of Section 66A - provisions of Section 66A of the Finance Act introduced w.e.f. 18.4.06, provides that the recipient of taxable service (provided by a person who is residing outside India) is liable to service tax - In the present case as the period of demand is prior to the introduction of Section 66A, Therefore, demand is not sustainable and, hence, set aside
Recent I.T Cases
Recent INCOME TAX Cases
Income Tax - THE COMMISSIONER OF INCOME TAX-V versus RELIANCE ELECTRONICS INDUSTRIES INDIA LIMITED = 2008
Date of Decision: July 16, 2008 - HIGH COURT DELHI
Addition on account of obsolete stock - assessee was in the business of mfg. television sets which required electronic components in respect of which technical obsolescence was a well-known fact - tribunal is justified in concluding that the assessee had valued its closing stock at the approximate market value as estimated by a qualified Chartered Engineer and AO could not point out any defect in the valuation report - no substantial question of law arises – revenue appeal dismissed
Income Tax - THE COMMISSIONER OF INCOME TAX DELHI (CENTRAL)-III versus M/S D. D. SALES CORPORATION = 2008 - TMI - 30048Date of Decision: July 22, 2008 - HIGH COURT DELHI
Question was with regard to the bar of limitation in making an assessment order u/s 158 BC - search having been conducted on 29.08.96 /30.08.96, the assessment made on 31.10.1997, is barred by limitation in view of the provisions contained in Section 158 BE - impugned order having been passed beyond the period of one year from the end of the month in which the last authorization for search had been executed - no substantial question of law arises – revenue’s appeal is dismissed
Income Tax - M/S KESHAV SHARES and STOCKS LIMITED versus INCOME TAX OFFICER AND OTHERS = 2008 Date of Decision: July 2, 2008 - HIGH COURT DELHI
Assessment u/s 143 - demand on account of income tax & interest raised - prior to the making of assessment order, no speaking order was passed by AO in respect of the objections taken by the assessee in its letter dated 17.09.07– in view of decision in Smt Kamlesh Sharma v. B.L. Meena, Income-Tax Officer case & inasmuch as the directives of the Supreme Court in GKN Driveshafts we set aside the assessment order – AO is directed to pass a speaking order and then proceed with assessment
Income Tax - COMMISSIONER OF INCOME TAX, DELHI-V. versus RBG INVESTMENT and FINANCE LTD. = 2008 Date of Decision: July 21, 2008 - HIGH COURT DELHI
Arrangement made between assessee & certain mutual funds with regard to subscription of fully convertible debentures, offered as a rights issue by the assessee’s sister concern - mutual funds were assured fixed rates of returns & assessee was able to obtain the fully convertible debentures of sale debentures only to make profits – so these can’t be treated as non business transaction - service charges were allowable expenses u/s 37 as they were wholly and exclusively expended for the business
Income Tax - COMMISSIONER OF INCOME TAX DELHI (CENTRAL)-III versus J.P.M FARMS (PVT.) LTD. = 2008 Date of Decision: July 18, 2008 - HIGH COURT DELHI
Levy of surcharge - proviso to Section 113 of the Income Tax Act, 1961 was inserted w.e.f 1.6.2002 whereby surcharge was sought to be levied by revenue on tax payable on undisclosed income determined in a block assessment year (1.4.1990 to 19.3.2001) - ITAT was correct in law in holding that the surcharge U/S 113 of the Income Tax Act, 1961 was not leviable in the present case - issue does not require any further investigation
Income Tax - COMMISSIONER OF INCOME TAX, DELHI-X versus M/S PRIMA INDIA PRODUCTS = 2008 Date of Decision: July 11, 2008 - HIGH COURT DELHI
Commissioner’s order u/s 263 requiring further investigation as Income-tax Officer had failed to enquire into the source of deposits/investments – Commissioner’s order merely raise doubts & suspicion - Tribunal is justified in concluding that the investments made by the assessee and its partners had a direct nexus with the sum disclosed by the assessee before the Settlement Commission - no further examination was required by the Income-tax Officer – revenue appeal dismissed
Income Tax - MALABAR AND PIONEER HOSIERY P. LTD. Versus COMMISSIONER OF INCOME-TAX = 2008 Date of Decision: January 16, 2008 - KERALA HIGH COURT
Preliminary expenditure incurred for construction of a shopping complex cannot be anything other than a capital expenditure as it goes to add to the capital of the project - Obviously, impugned expenditure is capital in nature & cannot be treated as revenue expenditure - rectification carried out u/s 154 of the Income-tax Act is perfectly justified - Tribunal rightly dismissed the assessee’s appeal on the validity of rectification as well as against disentitlement for the claim
Income Tax - COMMISSIONER OF INCOME-TAX Versus KARTAR SINGH AND CO. = 2008 Date of Decision: January 29, 2008 - PUNJAB AND HARYANA HIGH COURT
Issue whether deduction of interest & salary paid to partners could be disallowed or not in a case where the assessment was completed u/s 144(on status of registered firm), is highly debatable – AO rectified the assessment order on ground that since assessment was completed u/s 144, the status of firm was required to be taken as association of persons & hence disallowed deduction claim of assessee – impugned mistake is not apparent from record, hence rectification order is not valid
Postal Index Number (PIN)
Postal Index Number (PIN) is a 6 digit code.There are 8 PIN regions in the country. The first digit indicates one of the regions. The first 2 digits together indicate the sub region or one of the postal circles. The first 3 digits together indicate a sorting / revenue district. The last 3 digits refer to the delivery Post Office.FOR PIN CODE SEARCH :-----CLICK
The first digit of PIN indicates as below:
First Digit : Region States : Covered
1---Northern--- Delhi, Haryana, Punjab,
Himachal Pradesh, Jammu & Kashmir
2 ---Northern ---Uttar Pradesh and Uttaranchal
3 ---Western--- Rajasthan and Gujarat
4--- Western--- Chattisgarh ,Maharastra and Madhya Pradesh
5 ---Southern--- Andhra Pradesh and Karnataka
6 ---Sothern ---Kerala and Tamil Nadu
7--- Eastern--- West Bengal, Orissa and North Eastern
8--- Eastern ---Bihar & Jharkand
9 ---APS ---Army Postal Service
The first 2 digits of PIN indicates as below:
First 2 Digits of PIN Circle
11----------- Delhi
12 and 13 ---Haryana
14 to 16 -----Punjab
17----------- Himachal Pradesh
18 to 19 -----Jammu & Kashmir
20 to 28 ---- Uttaar Pradesh
30 to 34 -----Rjasthan
36 to 39 -----Gujarath
40 to 44----- Maharastra
45 to 49----- Madhya Pradesh
50 to 53----- Andhra Pradesh
56 to 59----- Karnataka
60 to 64----- Tamil Nadu
67 to 69----- Kerala
70 to 74----- West Bengal
75 to 77----- Orissa
78----------- Assam
79----------- North Eastern
80 to 85------Bihar
90 to 99------ APS
2 ---Northern ---Uttar Pradesh and Uttaranchal
3 ---Western--- Rajasthan and Gujarat
4--- Western--- Chattisgarh ,Maharastra and Madhya Pradesh
5 ---Southern--- Andhra Pradesh and Karnataka
6 ---Sothern ---Kerala and Tamil Nadu
7--- Eastern--- West Bengal, Orissa and North Eastern
8--- Eastern ---Bihar & Jharkand
9 ---APS ---Army Postal Service
The first 2 digits of PIN indicates as below:
First 2 Digits of PIN Circle
11----------- Delhi
12 and 13 ---Haryana
14 to 16 -----Punjab
17----------- Himachal Pradesh
18 to 19 -----Jammu & Kashmir
20 to 28 ---- Uttaar Pradesh
30 to 34 -----Rjasthan
36 to 39 -----Gujarath
40 to 44----- Maharastra
45 to 49----- Madhya Pradesh
50 to 53----- Andhra Pradesh
56 to 59----- Karnataka
60 to 64----- Tamil Nadu
67 to 69----- Kerala
70 to 74----- West Bengal
75 to 77----- Orissa
78----------- Assam
79----------- North Eastern
80 to 85------Bihar
90 to 99------ APS
Saturday, August 2, 2008
The Leave Applications
The Leave Applications
From H.A.L. Administration Dept: "As my mother-in-law has expired and I am only one responsible for it, please grant me 10 days leave."
Another leave letter written to the headmaster: "As my headache is paining, please grant me leave for the day."
Covering note: "I am enclosed herewith..."
READ MORE IN FUN BOX TOMORROW.......
HAPPY FRIENDSHIP DAY
HAPPY FRIENDSHIP DAY
“Friends and Medicine play the same role in our life .both care for us in pain But ………..The only difference is that friendship does not have an expiry date……!”
FROM :--
JAB WE MET CA
"UNITED WE STAND, DIVIDED WE FALL"
Garbage Truck
'The Law of the Garbage Truck
One day I hopped in a taxi and we took off for the airport. We were driving in the right lane when suddenly a black car jumped out of a parking space right in front of us. My taxi driver slammed on his breaks, skidded, and missed the other car by just inches! The driver of the other car whipped his head around and started yelling at us. My taxi driver just smiled and waved at the guy. And I mean, he was really friendly. So I asked, 'Why did you just do that? This guy almost ruined your car and sent us to the hospital!' This is when my taxi driver taught me what I now call, 'The Law of the Garbage Truck..' He explained that many people are like garbage trucks. They run around full of garbage, full of frustration, full of anger, and full of disappointment. As their garbage piles up, they need a place to dump it and sometimes they'll dump it on you. Don't take it personally. Just smile, wave, wish them well, and move on. Don't take their garbage and spread it to other people at work, at home, or on the streets. The bottom line is that successful people do not let garbage trucks take over their day.
Life's too short to wake up in the morning with regrets,
so.....
'Love the people who treat you right. Pray for the ones who don't.'
Life is ten percent what you make it and ninety percent how you take it!
Rgds....
DIVYA SHARMA
MEMBER JAB WE MET CA
"Live Well, Laugh Often, Love Much"
Corporate language !!
Corporate language !!
'We will do it'
means
' You will do it'
'You have done a great job'
means
'More work to be given to you'
'We are working on it'
means
'We have not yet started working on the same'
'Tomorrow first thing in the morning'
means
'Its not getting done... At least not tomorrow !'.
'After discussion we will decide - I am very open to views'
means
'I have already decided, I will tell you what to do'
'There was a slight mis-communication'
means
'We had actually lied'
'Lets call a meeting and discuss'
means
'I have no time now, will talk later'
'We can always do it'
means
'We actually cannot do the same on time'
'We are on the right track but there needs to be a slight extension of the deadline'
means
'The project is screwed up, we cannot deliver on time.'
'We had slight differences of opinion'
means
'We had actually fought'
'Make a list of the work that you do and let's see how I can help you'
means
'Anyway you have to find a way out no help from me'
'You should have told me earlier'
means
'Well even if you told me earlier that would have made hardly any difference!'
'We need to find out the real reason'
means
'Well I will tell you where your fault is'
'Well... family is important, your leave is always granted. Just ensure that the work is not affected'
means
'Well you know...'
'We are a team'
means
'I am not the only one to be blamed'
'That's actually a good question'
means
'I do not know anything about it'
'All the Best'
means
' You are in trouble'
ST ON CONSTRUCTION
SERVICE TAX ON CONSTRUCTION OF RESIDENTIAL COMPLEX
Gauhati High Court has held in Magus Construction v. Union of India that when a person is engaged in construction of residential complex for sale to various persons, it does not amount to service and the transaction is not taxable under service tax laws. When the construction company doing construction activity on its own self, and selling the complex to various buyers, it does not fall under the ambit of service tax. Until the time sale deed is executed, the construction company remains the owner and it cannot be said that the construction company is doing construction activity on behalf of any person. Mere agreement to sale at some future date does not transfer the ownership.
The court further held that service is an intangible commodity in the form of human effort and to have service there must be service provider rendering services to some other person, who shall be the recipient of service.
The court further held that departmental circulars are not binding on the courts.
The judgment is a landmark judgment and will be applicable in a variety of other situations, where service tax is demanded by the department without establishing as to who is a service provider and who is a service recipient.
THANKS TO GOD
AKHAND PATHAKHAND PATH WAS ORGANISED BY MANIT KAUR (40TH RANKHOLDER ,MAY 2008) to THANK GOD for helping her to achieve her goal.
All the relatives and near and dear ones of MANIT KAUR (40th rank holder) were present on this occasion.
Following members of JAB WE MET CA were ALSO present on this great occasion:-
Following members of JAB WE MET CA were ALSO present on this great occasion:-
MANIT KAUR (40TH RANKHOLDER)
ABHISHEK
KASHYAP
HEMANT
POOJA BATRA
VIVEK SAWHNEY
SATBIR SINGH
DEEKSHA SYAL
ASHUTOSH SHARMA
VIKAS BHARDWAJ
PRIYANKA
RITIKA
SHARD
AMAN MALHOTRA
ASEEM
VISHAL SINGLA
BY...
SATBIR SINGH
PRESIDENT
JAB WE MET CA
REDEFINING PROFESSIONALISM.....
"UNITED WE STAND , DIVIDED WE FALL"
Friday, August 1, 2008
CONITNUED FROM YESTARDAY......
SUCCESSFUL INVESTORS
To be successful, investors needed to do just a few
things well. One was investing only in companies that were within their
circle of competence.
GOOD ECONOMIST
“to be a good investor,one also needs to be a good economist.”
MEASURING STICK
“In Williams theory we have to decide what Should be the discount rate? Accoring to William his readers could determine for themselves what would be appropriate. But Buffett’s measuring stick is very straightforward: He uses either the interest rate for long term (meaning ten-year) U.S. bonds, or when interest rates are very low he uses the average cumulative rate of return of the overall stock market.”
TO BE CONTINUED TOMORROW.......
“ENJOY TODAY ,WAIT FOR BEAUTIFUL TOMORROW ”
what are weakness and strength you find while reading this article/section ?
please give your comment below (in comment label) as how can this article/section be improved further ? it will GIVE THE OPPORTUNITY TO MEMBERS OF “ jab we met CA “ BLOG TO IMPROVE THEMSELVES. WAITING FOR YOUR REPLY....
SATBIR SINGH
PRESIDENT
JAB WE MET CA
REDEFINING PROFESSIONALISM......
“LEADERS ARE READERS, READERS ARE THE LEADERS”
Beginners Guide to Investment
CONITNUED FROM YESTARDAY......
Beginners Guide to Investment Basics.
New to Investing?
Investing !! What's that?
Judging by the fact that you've taken the trouble to navigate to the Learning Center of ICICIDirect, our guess is that you don't need much convincing about the wisdom of investing. However, we hope that your quest for knowledge/information about the art/science of investing ends here. Sink in. Knowledge is power. It is common knowledge that money has to be invested wisely. If you are a novice at investing, terms such as stocks, bonds, badla, undha badla, yield, P/E ratio may sound Greek and Latin. Relax. It takes years to understand the art of investing. You're not alone in the quest to crack the jargon. To start with, take your investment decisions with as many facts as you can assimilate. But, understand that you can never know everything. Learning to live with the anxiety of the unknown is part of investing. Being enthusiastic about getting started is the first step, though daunting at the first instance. That's why our investment course begins with a dose of encouragement: With enough time and a little discipline, you are all but guaranteed to make the right moves in the market. Patience and the willingness to pepper your savings across a portfolio of securities tailored to suit your age and risk profile will propel your revenues at the same time cushion you against any major losses. Investing is not about putting all your money into the "Next Infosys," hoping to make a killing. Investing isn't gambling or speculation; it's about taking reasonable risks to reap steady rewards. Investing is a method of purchasing assets in order to gain profit in the form of reasonably predictable income (dividends, interest, or rentals) and appreciation over the long term.
Why should you invest?
Simply put, you should invest so that your money grows and shields you against rising inflation. The rate of return on investments should be greater than the rate of inflation, leaving you with a nice surplus over a period of time. Whether your money is invested in stocks, bonds, mutual funds or certificates of deposit (CD), the end result is to create wealth for retirement, marriage, college fees, vacations, better standard of living or to just pass on the money to the next generation. Also, it's exciting to review your investment returns and to see how they are accumulating at a faster rate than your salary.
When to Invest?
The sooner the better. By investing into the market right away you allow your investments more time to grow, whereby the concept of compounding interest swells your income by accumulating your earnings and dividends. Considering the unpredictability of the markets, research and history indicates these three golden rules for all investors 1. Invest early 2. Invest regularly 3. Invest for long term and not short term While it's tempting to wait for the "best time" to invest, especially in a rising market, remember that the risk of waiting may be much greater than the potential rewards of participating. Trust in the power of compounding ,Compounding is growth via reinvestment of returns earned on your savings. Compounding has a snowballing effect because you earn income not only on the original investment but also on the reinvestment of dividend/interest accumulated over the years. The power of compounding is one of the most compelling reasons for investing as soon as possible. The earlier you start investing and continue to do so consistently the more money you will make. The longer you leave your money invested and the higher the interest rates, the faster your money will grow. That's why stocks are the best long-term investment tool. The general upward momentum of the economy mitigates the stock market volatility and the risk of losses. That's the reasoning behind investing for long term rather than short term.
TO BE CONTINUED TOMORROW.......
“ENJOY TODAY ,WAIT FOR BEAUTIFUL TOMORROW ”
what are weakness and strength you find while reading this article/section ?
please give your comment below (in comment label) as how can this article/section be improved further ? it will GIVE THE OPPORTUNITY TO MEMBERS OF “ jab we met CA “ BLOG TO IMPROVE THEMSELVES. WAITING FOR YOUR REPLY....
SATBIR SINGH
PRESIDENT
JAB WE MET CA
REDEFINING PROFESSIONALISM......
“LEADERS ARE READERS, READERS ARE THE LEADERS”
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