PE- II MAY – 2006
Paper -3, Business and Other laws

We are herewith furnishing the questions and answers as produced in suggested answers to questions set at the PE-II Examination Group I May, 2006

Question No.10
(b) (i) Can the declaration of Board of Directors of interim dividend be revoked.


Ans: Dividend
(i) The Articles of a company may empower the directors to declare interim dividends, i.e., dividends in between its two annual general meetings. The Board may from time to time pay to the members such interim dividends as appear to it to be justified by the profits of the Company. (Article 86 of Table A)

An interim dividend is not a debt. It is a settled law that in case of an interim dividend which the directors have resolved to pay, they have an option at any time before payment to review their decision and resolve not to pay.

Hence, interim dividend declared by Board of Directors may be revoked.

We wish to draw your kind attention to the following:

Section 2(14A) defines dividend as “dividend” includes any interim dividend, [w.e.f 13.12.2000]

Section 205(1C): The provisions contained in sections 205,205A, 205C, 206,206A and 207 shall, as far as may be, also apply to interim dividend.

205(1A): The Board of directors may declare interim dividend and the amount of dividend including interim dividend shall be deposited in a separate bank account within five days from the date of declaration of such dividend.

205(1B): The amount of dividend including interim dividend so deposited under sub section (1A) shall be used for payment of interim dividend.

Friends
, in view of the above changes in the law w.e.f 13.12.2000, our understanding of the provisions as far as revocation of interim dividend is that, interim dividend can not be revoked. Even if it can be revoked then it has to be revoked within five days from the date of declaration i.e. Board resolution.

Please clarify this.

Is service tax applicable in case of peer review for service provided by CA.

I cleared my PE-II in Nov06 and starting my training from 5th march.... I enrolled for CA Final new course When can I give my first attempt at CA Final..... May09 or NOV09??

A Partnership firm has been converted as pvt ltd company under chapter IX of the companies act, 1956 on 20th October 2007. How much depreciation will be allowed to partnership firm and company.

As per Income Tax Act Depreciation is not allowed in the year of disposal/transfer of assets. Since Partnership Firm has been converted during the financial year 2007 - 2008 weather depreciation will be allowed to firm or not.

As per Income Tax Act Depreciation to the Company should be allowed for half year as Company came into existiant only on 20.10.2007.

It appears that only half depreciation will be allowed for financial year 2007 - 2008. Is it not a disadvantage on conversion.

Plz reply catagorically stating each event with reasons.

R. A. Joshi

What is really meant by SWAPs? I am not asking its definition...

This type of sentence we can see in many notifications of Central Government/CBEC. For Example Notification No.7/2008-Central Excise (N.T.) the link of which is as below.

http://www.cbec.gov.in/excise/cx-act/notfns-2k8/cent07-2k8.htm

Now, the question is how we can know about the date of its publication in Official Gazette.

IS THERE ANY SPECIFIC COURSE TO LEARN IFRS OFFERED BY ANY FOREIGN UNIVERSITY

WHAT IS THE DIFFERENCE BETWEEN IAS AND IFRS

If A sells goods worth Rs. 1,00,000 to B and B sells the same to C at Rs. 1,30,000,
In the books of B, if it passes the ajdustment entry of,

C a/c Dr. 1,30,000
To A A/c 1,00,000
To Cash 30,000

My query:
1. will this adjustment entry be covered by S/40A(3). Does this mean deemed cash payment of more then Rs. 20,000.

Whether passing of such contra entry attracts provisions of section 40A(3) if not please if possible provide some case laws

sir,
I was registered for CPT in september, 2006 in the Northern Regional council , ICAI, vishwas nagar and lived in Mukherji Nagar,Delhi and also cleared
CPT but not doing articleship as for now.
Now I have to sift to kolkata as per my
convieniences. So for this , I would like
to know the proceedings regarding the transfer of registration to Eastern Regional Council,KOLKATA.

thank you.