The Hindu Business Line : What you need is a prefix, a pullover and a tattoo to complete the CAricature

MR BHARAT S, a chartered accountant, says he's afraid of the Institute of Chartered Accountants of India (ICAI) implementing what he considers a dangerous idea currently being tossed about: The CA prefix.

"How would you read `CA Bharat'?" he asks, worried to be associated, even vaguely, with "entertainment held in a nightclub or restaurant while the audience eat or drink at tables", as I confirm the meaning of cabaret in the Concise Oxford English Dictionary. "Similar should be the plight of my buddy Bala who doesn't want to sound like a skull, and dear Daver... oh, no!"

It is argued by the zealous that the profession of accountancy needs a brand identity, just as doctors have Dr, and engineers, Er. The more envious of the enthusiasts have even started designing a purple-coloured pullover to rival the white coat and black gown that those two rival professions sport. A special collar, well-starched and with a bow tie, and a wacky accounting gadget that can be folded like a steth and put in the pocket, plus a unique tattoo, should complete the CA'ricature'.

To be sure if we are the only ones without any brand name, I check the `list of occupations' on http://en.wikipedia.org. "Abbess, Abbot, Accountant, Actor, Actuary... " it begins, and ends with "Xylophonist, Zookeeper and Zoologist," with about 800 lines in between.

If CAs succeed in creating a new insignia for themselves, and if those in other occupations start seeking our consultancy, we may well be prepared with suggestions such as AT for animal trainer, BS for blacksmith, BG for bodyguard, LK for lighthouse-keeper, and WC for wine connoisseur.

Inspiration for the ICAI seems to come from the ICAO, the Institute of Chartered Accountants of Ontario, which is believed to have launched the `CA: Nothing Less' campaign to enhance awareness of the CA profession, "while reinforcing the integrity, independence, high standards and international recognition that distinguish CAs."

So, what does `Nothing Less' convey? That it is `meaningful and yet simple... bold and clear'. I suspect that a think-tank is already overflowing on Indraprastha Marg with suggestions on something similar for us too. Will it be, "Something More"?

The fringe fear

THE latest clarification on fringe benefit tax is so lengthy that there is clamour among the anxious for special seminars and conferences on the mega Q&A that the CBDT has issued. Meanwhile, there are aggrieved assesses, such as Toshniwal Brothers P Ltd, who have gone to court challenging the constitutional validity of the new tax.

"It was this company which initially filed a writ petition and had taken up the matter single-handedly," informs Mr Arvind P. Datar, supplementing the news report about the writ petition against FBT, filed by a CA firm, represented by ICAI's past president, Ashok Kumbhat.

A `glaring example' that the latter petition mentions is that the new law "seeks to tax educational scholarships given to employees and outsiders other than to any person related to an employee", construing the scholarships as `gifts'.

"If this view is extended, the scholarships given by any employer Institutions/Association of Persons/Body of Individuals not registered under Section 12AA of the Income Tax Act would also be subjected to levy even though such genuine scholarships are given to poor and needy," points out Kumbhat.

"So also the gifts and donations, including donations eligible for benefit under Section 80G of the Act, made in the course of carrying on of the profession or trade will be subjected to fringe benefit tax as per Sub-sec (2) of Section 115WB, even though the Gift Tax Act is abolished. The attempt to levy FBT amounts to indirectly taxing the gifts and this levy is a disguised gift tax," argues the petition.

A wag wonders if attending a conference on FBT too would be seen as a fringe benefit.

Clairvoyant Commissioner!

AN ALERT chartered accountant has sent me a bunch of papers about a case involving Neyveli Lignite Corporation Ltd, where the company was asked to cough up Rs 50 crore as additional tax, after the Department discovered that there were `errors prejudicial to the interest of revenue' and so withdrew benefits given earlier.

The text of the Commissioner's order dated April 20, 2004, has portions that accountants may like to read. Such as: "As per the bulk supply contract with various State Electricity Boards, the income-tax liability on your assured income was to be borne by the respective Electricity Boards... Whatever is payable by you is reimbursed by the recipient for this with a stipulated cap. These are mere contra entries and are revenue neutral. Therefore, either this receipt is not of the nature of income or it has to be netted off against the equal payment of income-tax by you."

Towards the end of his order, the Commissioner stated, "I also rely on the ratio of the judgments of the Hon'ble Madras High Court in the case of Jaya Bharat Tanners vs CIT (264 ITR 673) and Allahabad ITAT in the case of Girdhar Gopal Gulati vs DCIT (88 ITD 585)."

Perhaps, as an afterthought, a `corrigendum to the order' was issued about two months later, on June 22, 2004, and it read thus: "Due to inadvertence, the date of the orders u/s 263 of the Income Tax Act for the Assessment Years 1999-00 and 2000-01 has been wrongly mentioned as 20.04.2004 instead of 20.02.2004.

"This typographical error is hereby rectified. Consequently, the date of both the orders should be read as 20.02.2004. The contents of the orders remain the same."

My correspondent avers that the contents cannot be the same, and I ask why. "Because the Girdhar Gopal Gulati case that the Commissioner has cited was reported in Taxmann's Income-tax Tribunal Decisions dated March 17, 2004, on page No. 585. There's no way one could have known on February 20 the page number of where a case was going to be reported in a referencer almost one month hence."

A clear case of... clairvoyance?

AccountSpeak@TheHindu.co.in

D. Murali

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