Election Duty in Tamil Nadu

The alarm goes off at 4:30 AM in Girnar Guest House in Kaushambi. It is the 18th of March 2026. I have packed the night before. Three copies of my appointment letter. Six passport-size photographs. A hardbound diary. Blue pen, black pen, red pen. The red one, I suspect, will see the most use.

On my laptop, my phone, and a pen drive, there is a PDF I have been reading for two days. The Compendium of Instructions on Election Expenditure Monitoring, December 2024 edition. Five hundred and some pages. It is going to be my reference manual for the next forty-five days.

I have been following money trail in Income Tax. Today, I am going to follow money in a different place.

The Election Commission of India has appointed me as Expenditure Observer for the Tamil Nadu Legislative Assembly Elections, 2026. My constituency is 86-Edappadi, Salem District. 

My job is straightforward. Every candidate contesting this seat can spend a maximum of Rs. 40 lakh under Rule 90 of the Conduct of Election Rules, 1961. I am here to make sure that limit is respected. And to catch the spending that candidates would rather not declare: the cash, the liquor, the freebies, the vehicles that never make it into any register.

Different domain. Same discipline. Follow the money.

The flight leaves Delhi at 7:05 AM. I land in Bangalore by mid-morning and make my way to Salem by a connecting flight. The landscape changes as you cross into Tamil Nadu. The soil turns red. Granite quarries appear on hillsides. Steel plants. Sago factories. Roadside stalls selling tender coconut. The signboards switch to Tamil, a script I cannot read.

Salem is bigger and more industrial than I expect. Thirty lakh people live in this district. Eleven Assembly constituencies. One Lok Sabha seat. A steel plant, a river, a busy corporation. This is not a sleepy town. This is a serious place.

A blue-beacon Innova is waiting for me. My Liaison Officer, Thiru. Duraisamy, and my PSO, Thiru. Samuel, are standing beside it. In the grammar of Indian government, a blue-beacon vehicle is a statement. It says: the Election Commission is here. Word travels in a constituency. By evening, people in Edappadi will know that the Expenditure Observer has arrived.

That is by design.

Most people think of elections as rallies and speeches and ballot boxes. They do not think about what runs underneath.

India's election expenditure monitoring system is, quietly, one of the most ambitious real-time financial surveillance operations in any democracy. Flying Squads patrol highways at 3 AM, stopping vehicles and checking for cash. Static Surveillance Teams sit at junctions with cameras and logbooks. Video teams record every rally and public meeting so that someone can later count the chairs, measure the pandal, estimate the cost, and ask: did the candidate report this?

Check posts on every major road. An Election Seizure Management System that logs every seizure of cash, liquor, drugs, or freebies in real time. Shadow registers that track observed expenditure independently of what candidates declare.

And at the centre of this system, an Expenditure Observer in every constituency. 

I meet the police first. The Superintendent of Police, Salem.

We sit across a table and talk about money. Not money in the abstract. Cash movement corridors through the district. Drug transit routes that get repurposed during elections for distributing inducements. Liquor supply chains. The geography of how money and material flow into a constituency when an election is on.

We exchange phone numbers. That is the real deliverable of the meeting.

Then the Collector. District Collector and District Election Officer, Salem. 

She manages eleven constituencies simultaneously. She knows the machinery.

I also meet the Commissioner of Police. That is three institutional meetings in a single afternoon. Three sets of phone numbers saved. Three relationships established.

The foundation is being laid.

Then I leave Salem for Edappadi.

Forty-two kilometres west. The road passes through Tharamangalam. The landscape opens into the kind of small-town Tamil Nadu that runs on agriculture, granite, and local commerce. The Mettur Dam, one of the largest in India, sits at the edge of this constituency.

I arrive in the late evening. The temperature is 36 degrees. My accommodation is an Inspection Bungalow. 

I meet the Assistant Expenditure Observer and the Returning Officer's team. These are the people who will actually run the expenditure monitoring on the ground every day. Block-level officials. Taluk-level officers. People who know every lane in this constituency.

I explain the shadow register. This is the most important tool in my kit. A parallel ledger maintained independently by my team, recording every observed campaign activity and its estimated cost based on the DEO's rate charts. When a candidate declares they spent fifteen lakh and my shadow register shows thirty-five lakh of observed activity, that gap is where the questions begin.

I set up the daily reporting protocol with the AEO. Summary every evening by 8 PM. Seizures reported immediately. No delays. No filtering.

They save my number. I save theirs. And a whatsapp group is created.

Here is what I have learned on Day 1.

The machinery exists. The teams are being assembled. The infrastructure is taking shape. Salem district has a competent Collector, a sharp SP, and a police commissionerate that is engaged. At the constituency level, the AEO and RO team are in place.

Whether the machinery works under pressure is a different question. That is what the next four days are for. I will inspect check posts. I will visit Flying Squads in the field. I will meet State Excise officials. I will walk through the Expenditure Sensitive Pockets identified in this constituency. I will look at registers and formats and verify that the teams are not just formed on paper but actually functioning on the ground.

There is something I keep thinking about.

In tax administration, the stakes are revenue. Important, certainly. A nation runs on what it collects.

In election monitoring, the stakes are the process itself. Every rupee of unaccounted expenditure is a small crack in the integrity of a democratic exercise. Every cash envelope distributed to a voter is an attempt to convert a citizen's choice into a transaction. The expenditure monitoring system exists to hold that line.

I am not being dramatic about this. It is just a fact. The line holds because someone is watching. The observer is not only a checker of registers. The observer is a signal that someone is counting.

A note on language.

I do not speak Tamil. This is, to put it mildly, a limitation when you are posted in Tamil Nadu.

But I have discovered that vanakkam, said with folded hands and a genuine smile, opens every door. That nandri, said often, builds goodwill faster than any official letter. And that sari, meaning OK, meaning understood, meaning let us proceed, is the single most useful word in the working vocabulary of Indian governance.

My Liaison Officer, Thiru. Duraisamy, handles the rest with a patience I find remarkable. The block-level officials speak enough English that we get by. In government, the real language is not Hindi or Tamil or English. It is the language of registers, formats, reports, and deadlines. That language, I speak fluently.

It is late now. The ceiling fan turns. The night outside is warm and full of the sounds of a Tamil Nadu small town: insects, a distant temple speaker, the occasional auto-rickshaw.

I open my diary and write the day's observations. Four meetings. Two cities. One overnight transformation from a tax officer in Delhi to an election observer in a constituency I had never visited before this morning.

I have four more days in this visit. Then back to Delhi for a week. Then back here on the 30th of March when the gazette notification drops. Then continuously from the 5th of April through polling day on the 23rd.

The work has begun.

Vanakkam, Tamil Nadu. 

India’s ESG Future : a new era of Sustainability and Investment

Let me try an analogy to make it more understandable. Imagine that a company is like a school - it has many students (employees), teachers (management), and a principal (CEO). The principal wants to make sure that the school is a good place to learn and grow. To do this, the principal decides to evaluate the school using an "ESG report card" - this is like a report card that rates how environmentally friendly, socially responsible, and well-governed the school is. Do you like this analogy? 

So, let's imagine that the school's ESG report card has three sections: environmental, social, and governance. The environmental section evaluates how the school impacts the environment, like how much energy it uses, how much trash it produces, and how much water it conserves. The social section evaluates how the school treats its employees and students, like how diverse the student body is, how inclusive the school culture is, and how well students and teachers are supported. The governance section evaluates how well the school is managed and whether it follows ethical practices. This can include things like whether the school has an anti-bullying policy, whether the principal is transparent about school finances, and whether the school has a code of conduct that is followed by all staff and students. So, when people look at a company's ESG report card, they can see how the company performs in each of these areas. Then, they can decide whether they want to support the company by buying its products or services or stock. 

ORIGIN OF ESG

The concept of ESG can be traced back to the 1960s, when socially responsible investing (SRI) emerged as a way for investors to consider environmental and social factors when making investment decisions. The idea behind SRI was that companies that did well in these areas would also do well financially. Over time, the concept evolved into what is now known as ESG, which takes a more holistic approach to evaluating companies. Today, many investors, consumers, and employees consider ESG factors when making decisions about which companies to support.

ESG REPORTING IN 2023

The importance of ESG reporting is growing rapidly, especially in the year 2023. Companies are under increasing pressure from investors, consumers, and employees to be transparent about their ESG performance. There are several reasons for this. First, people are becoming more aware of the environmental and social impacts of companies, and they want to support businesses that are making a positive difference. Second, there is a growing body of research that shows that companies with strong ESG practices tend to perform better financially.

There is this important concept called as GREENWASHING. Greenwashing is when a company makes misleading or false claims about its ESG performance in order to appear more sustainable than it actually is. This can lead to inaccurate ESG reports and can make it difficult for investors and consumers to make informed decisions. There are several reasons why companies engage in greenwashing. Sometimes it's a deliberate attempt to mislead, but it can also be the result of a lack of understanding or inadequate resources for accurate ESG reporting. 

Let's take the example of Volkswagen. In 2015, the company was caught using software to cheat on emissions tests, which led to a huge scandal. The company had been claiming to have low emissions, but it was actually emitting much more pollution than it was reporting. This is an example of how greenwashing can lead to serious consequences for a company. It damaged Volkswagen's reputation and led to significant financial losses. Many other companies have been accused of greenwashing as well, such as Coca-Cola, BP, and Nike.

CLIMATE IMPACT

ESG reporting is playing an increasingly important role in the fight against climate change. This is because it provides a way for companies to measure and report on their carbon emissions, as well as their plans to reduce those emissions. Many companies have made public commitments to become "carbon neutral" or "net zero" by certain dates, and they are using ESG reporting to track their progress towards those goals. Investors and consumers are using this information to hold companies accountable for their actions and to make informed decisions about which companies to support. Let's take a critical look at the current state of ESG reporting and climate change. While ESG reporting is definitely a step in the right direction, there are some limitations to consider. First, there is no standardised framework for ESG reporting, so companies can vary widely in how they measure and report on their ESG performance. This can make it difficult for investors and consumers to compare companies. Second, some companies may "game" the system by cherry-picking which metrics to report or by setting overly ambitious goals that they have no real intention of meeting.

ESG IN INDIA

Let's start with the business responsibility and sustainability reporting, or BRSR, that was introduced by SEBI in July of 2023. This framework requires certain listed companies in India to disclose a wide range of ESG metrics, including their greenhouse gas emissions, water and energy usage, diversity and inclusion policies, and community engagement initiatives. This is a significant step forward in terms of increasing transparency and accountability around ESG issues in India. However, there are some challenges with this framework. For example, the requirements are quite detailed and complex, which could be difficult for some companies to comply with. 

The two main stock exchanges in India, the National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE), have played a significant role in encouraging companies to adopt ESG reporting. For example, they have both launched sustainability indices, which track the ESG performance of listed companies. As stated above, SEBI has also been instrumental in developing the BRSR framework and in promoting awareness of ESG issues among Indian companies. Overall, it's clear that there is a strong push for improved ESG disclosure and transparency in India.

INDIA’s TOP FIVE

The top five ESG-performing companies in India are ITC Limited, Mahindra & Mahindra, Wipro, HDFC Bank, and Adani Green Energy Limited. ITC Limited is known for its strong environmental practices, including water conservation and waste management. Mahindra & Mahindra is known for its efforts in corporate social responsibility and employee welfare. Wipro is recognized for its commitment to sustainability and community engagement. HDFC Bank has made significant strides in promoting diversity and inclusion, and Adani Green Energy Limited is a leader in renewable energy.

I'll give you a few examples of the most commonly used metrics. The first is greenhouse gas emissions, which includes the amount of carbon dioxide and other greenhouse gases a company emits. This is usually measured in tons of carbon dioxide equivalent (CO2e). Another important metric is water use, which tracks how much water a company uses and how it manages water resources. There is also energy use, which measures how much energy a company consumes. In addition, there are metrics for waste management, which includes the amount of waste a company generates and how it disposes of it. Under the environmental category, there are many subcategories. Some examples include air emissions, water use, water quality, solid waste management, biodiversity, land use, energy consumption, climate change, environmental management, and more. Now, let's discuss social metrics. Social metrics often include labor practices, human rights, employee health and safety, gender diversity, community engagement, product safety and more. Finally, governance metrics measure a company's policies and procedures around topics like ethics, transparency, and management.

ESG FOR INVESTORS

ESG reporting is becoming increasingly important for investors because it helps them understand the risks and opportunities associated with a company. This is because ESG factors can have a significant impact on a company's long-term performance. For example, if a company has poor labor practices, this could lead to strikes or boycotts, which would negatively affect the company's stock price. Or, if a company is heavily reliant on fossil fuels, it might be at risk if stricter environmental regulations are put in place.

One way that investors utilize ESG reporting is by using it to screen potential investments. For example, an investor might use ESG data to identify companies that align with their values or that are well-positioned to capitalize on trends like the transition to a low-carbon economy. In addition, many large institutional investors, like pension funds, are starting to use ESG criteria to guide their investment decisions. This is because they want to ensure that their investments are not only profitable, but also sustainable and responsible.

Have you heard about the rise of "green bonds" in India. Green bonds are bonds that are used to fund projects that have a positive environmental or climate impact. They have been growing in popularity in India in recent years, and they're an example of how ESG can be used to finance projects that have a positive impact. One example is the Indian Renewable Energy Development Agency (IREDA), which is a government-owned institution that issues green bonds. They've issued over $3 billion in green bonds to date, which have been used to fund solar and wind energy projects in India. 

To conclude, ESG reporting is becoming increasingly important for companies in India, as it can help them to attract investment, manage risk, and improve their environmental and social impact. While there are some challenges in implementing ESG reporting, there are also many opportunities for companies to make positive changes. India has a unique opportunity to become a global leader in ESG reporting, and there are many success stories that demonstrate the benefits of taking a proactive approach to sustainability. With continued efforts, India can create a more sustainable and prosperous future for its people and the planet.

Civil Services as a career choice

Civil service is a career choice that offers a unique opportunity to serve the nation and make a difference in the lives of people. It is a noble profession that requires dedication, hard work, and a commitment to public service. There are various agencies and departments that make up the civil service, including the Indian Administrative Service (IAS), Indian Police Service (IPS), Indian Revenue Service (IRS) and Indian Foreign Service (IFS), among others. These services are responsible for the administration and management of various government functions, including law and order, revenue collection, and foreign affairs.

One of the main benefits of choosing a career in the civil service is the opportunity to work in a variety of fields and locations. Civil servants have the opportunity to work at the national level, as well as in states and districts across the country. This allows them to gain a diverse range of experiences and develop a broad set of skills. For example, a civil servant in the Indian Administrative Service (IAS) may work in areas such as policy development, law and order, revenue collection, and education. Similarly, a civil servant in the Indian Police Service (IPS) may work in areas such as crime investigation, traffic management, and community policing. And a civil servant in the Indian Foreign Service (IFS) may work in areas such as diplomacy, trade, and cultural exchange. Indian Revenue Service (IRS) Officers may be engaged in tax assessment and financial fraud investigation along with international taxation and cross border tax evasion.

Civil servants may also work at the state and local levels, where they are responsible for implementing policies and decisions that affect their communities. For example, a civil servant in a state education department may be responsible for implementing policies and programs related to school funding, curriculum development, and teacher training. In addition to implementing policies and decisions, civil servants may also play a role in the policy-making and decision-making processes themselves. This may involve providing advice and recommendations to elected officials and other decision-makers based on their expertise and experience.

For example, a civil servant in the Ministry of Finance may provide recommendations on budget allocation and economic policy based on their knowledge of financial trends and analysis. Similarly, a civil servant in the Ministry of Health may provide recommendations on healthcare policy based on their knowledge of public health issues.

Another advantage of a career in the civil service is the potential for advancement. Civil servants have the opportunity to rise through the ranks and take on leadership roles within their agencies. They also have the opportunity to pursue further education and training to enhance their skills and expertise.

For example, civil servants may be able to pursue advanced degrees in areas such as public administration, policy analysis, and law. They may also be able to participate in leadership development programs and attend professional workshops and seminars.

Another advantage of a career in the civil service is the potential for advancement. Civil servants have the opportunity to rise through the ranks and take on leadership roles within their agencies. They also have the opportunity to pursue further education and training to enhance their skills and expertise.To be eligible for a career in the civil service, individuals must meet certain educational and age requirements. In addition, they must pass a competitive examination, which is held annually by the Union Public Service Commission (UPSC). The examination consists of written and oral components (Prelims, Mains and Interview), and candidates are evaluated on their knowledge of subjects such as current affairs, history, economics, global relations, public administration among others as well as their communication and leadership skills and aptitude.

While a career in the civil service can be rewarding and challenging, it also comes with its share of challenges. Civil servants are expected to work long hours and may be required to work in difficult or hazardous conditions. They may also face criticism and scrutiny from the public and media.

Despite these challenges, a career in the civil service can be a fulfilling and rewarding experience for those who are passionate about making a difference and serving their communities. It is a unique opportunity to contribute to the development and well-being of the nation, and to work towards the greater good of society.

The students are encouraged to refer to the Union Public Service Commission (UPSC) official website: This website provides information about the civil services examination, including the eligibility criteria, examination syllabus, and application process. It also provides access to past exam papers, which can be helpful for practice and preparation. https://www.upsc.gov.in/

Also refer to the Ministry of Personnel, Public Grievances and Pensions: This ministry is responsible for the administration of the civil service in India. The ministry website provides information about the different agencies and departments that make up the civil service, as well as policies and programs related to civil service development and reform.

Jai Hind!

Civil Services Examination – Step by Step

I thank whole heartedly dear Tanuj Mathur, old friend and currently placed with Amity Lucknow Campus, who invited me to host a webinar on civil services exam preparation as a part of career counseling series for the students of liberal arts and business school. I was really happy and content to have done it.

The recording of the webinar is attached below. It can be viewed on Youtube as well on my channel. I have made all the efforts to outline the civil services preparation strategy with few practical and relevant tips deriving from my own experience.

In this webinar, you'll get to know about: 1. Making up your mind for this Exam 2. How to choose a subject (optional) 3. Word about coaching institutes 4. Place of preparation 5. Study material 6. Finances 7. Answer Writing 8. Day scheduling 9. Productivity resources 10. AND, lots of motivation.

It would be more gratifying if I could see few successful students from Amity Lucknow Campus in the years to come.

Cheers!

Tryst with Transfer Pricing

Hello everyone

Hope you all are Leading a focused life with clear written goals. They are so very important in bringing clarity in what you are doing and what we plan to do. I just thought of penning my thoughts down as I am at such an important juncture of my life wherein I have to take some very important decisions which would mark a new beginning and Pave a way for my future. Seven years in Mumbai have come to an end. 

This is my second year in transfer pricing as a transfer pricing officer in Mumbai. I have thoroughly enjoyed my tenure the first year has gone by and the second year has begun with some new experiments some new learning some new thoughts. Transfer pricing as a subject is quite technical but after having experienced it and practised it for one year I realised the fact that it is more of a common sense. Nevertheless there is no substitute for a thorough understanding of the subject as they say that knowledge is power and the knowledge of the subject brings a lot of power in the forms of confidence greater understanding and analytical bent of mind. 

Transfer pricing basically pertains to determination of arms length price of the transactions between the related parties. Herein, we try to compare the transactions between two related parties with the transactions between the AE and non-AE And then try to determine whether the price charged by the assessee from the AE is at arm’s-length or not. Then we have certain methods prescribed in the income tax act and we have the comparability analysis the statue makes it very clear As to which method is to be applied when. The income tax rules becomes very significant here as a detailed analysis of the methods prescribed are delineated along with the use of multiple year data and examples thereof. 

The transfer pricing was introduced in India by the Finance act 2001 and since then we are almost about to come to an end of the second decade. The subject has evolved and so have the rules. I have met so many chartered accountants during my one-year tenure in this field and I have heard them saying that transfer pricing is of no use because it is based on estimation. But my dear friends have forgotten that with the rise of globalisation the companies are having more number of international transactions between them there are so many multinational corporations coming up and they have their own subsidiaries and related parties set up in different countries for ease of business. Here comes the role of transfer pricing to investigate whether there is any evasion of tax or shifting of profits from High tax jurisdiction to low tax jurisdiction on account of related party transactions. In view of this how can the role of transfer pricing become insignificant in the new world order. 

I am open to queries on the fundamentals of transfer pricing and its usage. 

Cheers!

Photoshop hands-on

During my tenure as Deputy Director of Income Tax in Intelligence and Criminal Investigation, I happened to design an advertisement for the Income Tax Department on a new return that needs to be filed by the eligible entities. I am sharing the image here:

This advertisement was really liked by my seniors and we decided to take its print out on a flex. This was then installed in all the Income Tax Buildings in Mumbai and also all across the cities in the Country. This was in larger public interest and was educative in nature.

Intelligence and Criminal Investigation

Hello friends,

I am back to blogging! Yes, this happening after a very long time. My current stint as Deputy Director of Investigation (DDIT) in Intelligence and Criminal Investigation has been very enriching. Mumbai has given me lot of exposure and immense experience of variety of cases which I can cherish and boast for life. Most memorable being an action on a Credit Cooperative society detecting a cash deposit of more than 2000 cr! Special Projects also excites me a lot. Most importantly, I have been able to follow my passion for photography and creativity. We conducted an All India Conference at Madh Island, Mumbai where I completely made use of my NIKON D750 (24-120mm). I took the stills as well as videos and then created a movie with all the special effects and tag lines which everyone liked and appreciated. More than anything else, I felt satisfied and content. The movie which I created is very close to my heart.

These days, we are conducting OUTREACH PROGRAMMES – Workshop on uploading of Statement of Financial Transactions u/s 285BA of the Income Tax Act, 1961. The presentations have all gone well. This again is my area of interest (i.e. giving presentations) which I love doing and which i am able to pursue here. Sharing some of the pics here.

P.S. : Keep pursuing your hobbies along with your work. I consider myself lucky that in my work, I have been able to pursue them.

Mallya (Mal-liya) Conundrum

Its so good to be back on your blog after a substantial period of time. Its just that somebody reminded me during the course of a hearing of a case in my office today that they have gone through my blog and have come before me. Was glad to know that they knew a lot about me through my blog than about their case !

Newspapers and News channels these days are flooded with Mallya's flight to UK and the NPA (non-performing assets) scam. Its shocking to see that there are so many willful defaulters who have taken crores of loans and have just shown their back to the banks. No recovery is in sight. I, infact, came across an e.g. of PNB from whom some 4 companies had taken loan amounting to approx Rs.150 cr. It was later found out that all these four companies worked from a common address in Karolbagh, New Delhi. When the locational search was done, it was found out that their office space was equal to a size of a table and a chair and that space was a rented one. The owners were paying Rs.100 a month as rent. This is really surprising that the Banks are pleading before the Debt Recovery Tribunal and are now appealing before the Apex Court.

Why did all this got initiated in the first place ? This shows that proper scrutiny checks were not maintained by the Banks, to begin with. It appears that for small investors/laymen/salaried class, the banks have the stringent rules available. But when it comes to corporate lending, where does the checks and balances go ? Its all public money and it should be safeguarded at any cost. No Tom, Dick and Harry should be allowed to play with it. If there are securities given by defaulters, then it should be attached. If we say that the securities are not existing (Just like NSEL scam), then definitely there is a big flaw on the part of banks. 

The Civil Service aspirants should study this issue very closely from all quarters possible. Who are the defaulters, Where is the flaw, What are the problems in recovery, What action the Government has taken, What are the strategies adopted by the defaulters to dupe the banks.. ?

Bigger picture of checks and balances is to kept in mind. Plug the loophole in the initial stage itself so that it does not become a monster which are are unable to handle.

Cheers !

My First Survey as an Authorised Officer

I conducted my first survey as an Authorised Officer in Nov'12. - Scintillating Experience..

I was very apprehensive in the beginning as anyone else would be. In the very first place, i wasn't knowing as to how to prepare a Sat Note. Then i called up some of the senior Officials whom i met during 2nd OJT. Everyone reiterated the same fact again and again that - "Move out of the office and visit your jurisdictional area". That was the time i decided to move out and went for the recce. The case related a big builder in Mumbai. I visited their site offices in Thane and also the Corporate office in Mumbai disguising my identity (as Jasbir Singh, Inderjeet Singh etc etc....).

 

Howver, on the date of survey, i realised that my recce was misdirected. During recce, i was basically looking for 'on money' transactions. I had infact visited and talked to one of the Property dealer also about this group whether they take any cash or not. But everywhere i was posted with the fact that they do business totally in white. All payment shave to be made in cheque only, no cash component at all. That was very disappointing. But, on the day of survey, in the morning, we totally changed our direction of investigation. The assessee was claiming deduction u/s 80IB(10) for one of its housing project. We decided to target this particular section only. That morning, we studied the entire section from the act, also read some of the articles from the web and took the decision that we will confront the assessee point by point. The strike time was 4.15pm on 06.11.2012. This lasted for 27 hours. And finally, we were able to prove that the assessee was not eligible to claim deduction u/s 80IB(10). Although they were fulfilling the 1000 sq ft. and more than 1 acre conditions. But we caught them on the issue of completion of the project which should be within 5 years from the end of financial year in which they obtained the commencement certificate from the local authority. Here, 5 years came to an end on 31.03.2012, but they received the completion certificate from the Thane Municipal Corporation on 27.09.2012. This was the catch. Moreover, they had been claiming deduction on 4 of their towers. But one of these towers ('VARUNA') was still under construction as was reflected by field verification and also by architect's certificate. In addition , the assesse was having certain 80IB and non 80IB towers. This concept itself appeared to be ridiculous. We relied on the Bombay High Court judgement in the case of BRAHMA ASSOCIATES. which specifically states that 80IB deduction cannot be given to any part of the housing project. This deduction is to be given for the entire housing project as a whole.

 

Also, the assessee was claiming deduction u/s 80IA(4)(iii), in one of its another premise which is developed as an Industrial Park. However, for claiming this deduction, the asssessee has to obtain a notification form CBDT, which was still pending in this case. Their auditor in the audit report had also stated that 'we are hopeful of getting a positive response from CBDT in the near future'. Our contention was that - WHAT IF CBDT REJECTS YOUR PLEA ?? We could not have allowed the deduction merely on the basis of presumption. Hence, this was also disallowed.

 

The assessee has agreed to pay the taxes over the surrendered amount. It turns out to be approx Rs.70 crores.

 

Total Deduction to be disallowed :

Deduction u/s 80IB(10)     : Rs.178,85,37,405/-
Deduction u/s 80IA(4)(iii)  : Rs.24,29,37,504/-

GRAND TOTAL : Rs.203,14,68,909/-


 

 

Face to Face with Harshad Mehta's Associate

This meeting with the closest associate of HARSHAD MEHTA left me pondering over the fact that how one man baffled the entire country's financial market and leading to such a huge impact. This person named Mr. Biyani (name changed for identity purpose) was the only one who could enter Mr. Harshad's room without knocking the door. Biyaniji happens to be my assessee. He narrated me the story of early 1990s when he and Mehta's other associates used to trade in the Bombay Stock Exchange (BSE). It used to be an open outcry system. However, with the fall of Harshad Mehta came the dark nights for Biyani. It would not be appropriate to discuss Biyani's case but yes meeting was mesmerizing.

Mumbai Posting

   The experience in mumbai has been phenomenal. Initially, it was appearing to be very difficult to acclimatise with d situations here. Everything seemed to be very fast. People seemed to be running from pillar to post least concerned about each other. But without fail, everyone says one thing about Mumbai that soon after 5-6 months, one automatically starts liking the city. Mumbai was my first choice of posting and on the basis of Departmental ranking, i happened to get my first choice. Its cool. I am very much new to this city. When the orders came after AGT, it was known that i was getting City 12 and my office would be the main Head Office - Ayakar Bhavan, Churchgate. It sounded very appealing to me.

   Then on 18th April, 2012, we all (21) were suposed to join there. However, somehow 4 of us got a bit late on that day so we happened to join on 19th april at the DCIT(HQ) office at ayakar bhavan attached to CCIT(CCA), Mumbai. We got the designation of Assistant Commissioner of Income Tax (ACIT-OSD). The proper designation actually was ACIT (OSD), UOP - Under Orders of Posting. The actual internal orders took a bit of time somewhere around 3 weeks. When the orders came, i was posted to Circle 12(2). This moment was very exciting. I was about to get my room in the office. Then only i came to know that City 12 is a model charge in Mumbai wherein the Officrrs get their single room. This appears to be a luxury to me. I was even more thrilled. I took charge on 22 May 2012, the first day when i sat on the chair which was official. There is immense interaction with the public in the income tax department. The only difference is that here we happen to interact with people belonging to higher echelons of society. My Circle happened to have assessees speaking flawless flamboyant english. I was pretty impressed.

   The most significant thing to note is that EVERYDAY IS A DECISION MAKING DAY! !!! I have realised that if we take appropriate timely decisions, the grievances of the public will be redressed at large. The major grievances of the people arises because of the fact that timely decisions are not taken on their files. But a huge change is seen these days in the department. People are becoming proactive, Return processing is getting digitized, Refunds are expedited smoothly through refund banker, infrastructure is improving at a rapid pace etc etc. However, soon after one month in this circle, i got transferred to Circle 12(1) within the same City. Its been just 10 days i have begun work here. Notices u/s 142(1) have been issued. The scrutiny season has begun.

Cheers......:-)

2nd Departmentals

Finally,


Our 2nd Departmentals have commenced. Ironically, when i wrote the last exam (Pub Admn) of my last mains, i declared it everywhere that this was my last exam and i do not have to study anymore. But after entering these Services, i have realized that Study is never gonna stop. Income Tax Personnel needs to study the most. Even after they take up the field postings, they always have to remain updated vis-a-vis various Circulars and Notifications from CBDT (You also have a choice not to study, but at your own risk). 


Hopefully, there are no more exams after these during the course of the training. The Bharat Darshan is also starting from 17th of this month. The postings should come by the end of this month. The Valediction is on 16th April 2012. I just love all of it. 


Cheers..!!

My First Survey

Friends,

During my 2nd OJT at Faridabad, we went for a Survey in 4 different groups. Around 8 people were there in each team with Police personnel. We took the entire premises under our control as soon as we reached there. The assesse was a Jeweller. We searched the entire premises and checked the back door, if any. All the mobiles were taken into our custody. The assesse was taken by a shock. He suddenly insisted upon calling up his business partner. However, despite repeated calls, the Partner did not turn up. Then, in general, certain preliminary questions were asked from the assessee viz.

·         Do you trade only in gold ?

·         How much gold stock do you have ?

·         From where do you purchase ?

·         Who’s your CA ?

·         What is your main work ? Sale or Repair ?

Then, I only volunteered for recording the statement of the assesse. We, thereafter began recording the statement with the following questionnaire :

1.       Please identify yourself.

2.       Please give details of your business concerns and sister business.

3.       Please give details of your family  members, who have interest in the firm.

4.       What are the sources of your income ?

5.       Please furnish details of your income tax / details of income tax of firm.

6.       Please give details of any investments made during the FY or in PY.

7.       Please give details of the vehicles owned / issued by business concern.

8.       Please furnish the details of bank accounts.

9.       Please give details of immovable assets held by the business concern.

10.   Any other concerns, if any, operating from this premises.

11.   Do you maintain regular books of a/c ? Where are these kept ?

12.   Furnish details of purchase bills , if any , which have not been entered into books of a/c & goods have been received or yet to be received.

13.   Please produce the goods received for repair (gold, diamond or silver) as on today.

14.   Give details upto the date til which books of a/c have been written.

15.   Do you maintain stock register ?

I, somehow, was not able to stay back till the conclusion of search and left the premises by 10.30pm. Hence, this questionnaire was to be concluded by the ITO present there. The Valuation Officer also showed up. However, he was too late. He did the entire valuation of the stock present in the following format :

S.No.

Metal Used

Description

Gross weight in grams

Net weight approx.

Description of Stone’s set

Approx. weight of stones

Value of stones

Total value

                The valuation was done for following items :

~        Chains

~        Jhumkey

~        Tops

~        Ladies ring

~        Pendants

~        Gents rings

~        Mixed ornaments

~        Baali

~        Mangalasutra

~        Nosepin in diamonds

~        Gents ring and tops in diamond

~        Bracelet and Kangans

~        Gold sets

~        Silver ornaments (Payal, utensils, coins, Mix, Murti)

~        Moti, Pukhraj and Pearls

~        Gold coins

~        Brick piece

This experience of survey u/s 133A was a great learning experience. This shows how much impact and influence does the income tax department have in the public. The surrender and disclosure in this case was to the tune of Rs.40 Lakhs. Similar amount was disclosed in the other 2 cases also but in the 4th case, we managed to have surrender to the tune of Rs.81 Lakhs. These Surveys have a huge deterrent effect in the market. 

People know that they will now have to keep their books in order otherwise the Income Tax people will grab them.

cheers..!!

Revised UPSC Marksheet

The UPSC Marksheet of all my 4 Attempts :

4th UPSC Interview

Board : Shashi Uban Tripathi

Duration : 30 min (5:15pm – 5:45pm)

Date : 29th March 2011

Chairman (Ch) : You have done MA (Sociology) from ?

Me : Lucknow University, Mam.

Ch : You did it in 2005. Since then, what have you been doing ?

Me : Mam, since then, I have been preparing for the civil services examination. This is my 4^th and the last UPSC interview.

Ch : So, do you have any job ex ?

Me : Mam, I got selected last year in to IRS (Income Tax).

Ch : So, its been some 3 months into the service.

Me : Yes Mam, approximately 3 months.

Ch : Are you happy with Income Tax ?

Me : I consider myself very fortunate to be in Income Tax. Infact, last Friday, we had a video conferencing with our Chairman, CBDT. He addressed not only the probationers from NADT but also the CCITs from across the country. In his address, he repeatedly emphasized upon the camaraderie of the entire cadre. Mam, who would not love to work in such kind of a department where the camaraderie of the cadre is being emphasized upon..

Ch : But you have written the exam again for improvement ?

Me : Yes mam, the most important factor in the administrative and the police services which fascinates me the most is the diversity of job…(then Chairman came up with another question and did not let me complete).

Ch : You have studied Sociology. Tell me how can we improve the parochial mindset of the people like that in the case of Khap Panchayat.. ?

Me : Mam, I believe that Law and administration have a major role to play here. But, more than that, major changes have to come from within. Let’s say, if a particular person from a community adheres the law and abide by it in all capacity, he’ll be respected by the administration and will become a role model for others to follow, if his deeds are appreciated in society, others will love to follow him.

Ch : But, today we see that even the educated people are abiding with the parochial laws of khap panchayat. We have the instances of Army Generals.

Me : In that case, Law will have to take its own course. Anybody found commiting a heinous crime should be punished. And, that will act as a deterrent for others.

Ch : In Delhi, on the Police vans, its written – With you , For you, Always. People say, that this in itself is the problem. What do you have to say. ?

Me : Mam, I believe that its only the atrocious picture of the police which comes to the forefront. People have started associating the Police with atrocities. The good work done by the police goes unnoticed.

Board Member : There was a lathi charge yesterday by the police on a mob at mohali, which was standing in queue for the tickets. Why such kind of acts take place ? Why to beat the cricket fans ? What will you do if you are the SP ?

Me : Sir, the peaceful sale of the tickets should be ensured. If people try to barge in and disturb the peace, action will have to be taken. In such kind of a situation, I will also support lathi charge, because it is very much needed at times.

Chairman : Yes, I agree, lathi charge is needed at times.

Me : I will try to increase the number of policemen handing this kind of a situation. On top of all, I will direct every single policeman to have a humane understanding of the situation. If someone still disobeys, I will take action against him.

BM : Recently, an engineer was arrested by the police on the ground that he bought many match tickets in advance and later he was found selling them at higher prices. What is the harm in such kind of an act ? You see in London, people buy the tickets in advance and sell them at higher prices for the Premier League. What’s wrong in it ? I have 1 lakh rupees. I am ready to pay, you are ready to sell.

Me : Sir, that’s like hoarding the foodgrains. In such cases, Government has to intervene. We just can’t support black marketing. Govt. has to establish some kind of an equity. If people involved in these activities are not punished, then it will lay a very bad precedence before others and will have a negligible deterrence value.

BM : There is so much of corruption in Uttar Pradesh. People in your income tax department also are found taking bribes every now and then. What will you do if your

subordinate does his work only after taking bribe ?

Me : I will give him the warning. Still, if he doesn’t mend his ways, I will stop delegating work to him and will infact, take his work upon myself.

BM : That’s very good. What if your subordinate takes money on your behalf, by taking your name ?

Me : Sir, that would tantamount to disrespecting me and my integrity. I will warn him first, and then will take action under the Conduct Rules.

BM : I am a depressed man. Aren’t you a depressed man, Manpreet  ?

Me : No Sir.

BM : You are a sportsman, you look like a sportsman. Still you not depressed ? I am very depressed.

Me : Sir, I will energise you.

BM : You take a look at the condition of sports in India. Its full of scams. What is the primary loophole that you see in the system ?

Me : Sir, the most primary loophole that I feel hinders the smooth sports administration in India is that the Sports bodies and federations in the country are headed by the Politicians and the retired bureaucrats. Why can’t we have eminent sports personalities heading the sports federations ? Why can’t we have Prakash Padukone heading the Badminton federation, Why can’t we have Dhanraj Pillay heading the Hockey federation ? It is the vested interests of few people which spoils the entire pond. If these people are brought in, they’ll put their heart out in the work they will do. Having been associated with the similar sport, they’ll not tolerate any kind of corruption in the system.

BM : That’s very correct. Ok, let’s say, a very enthusiast Sports Minister is appointed. What all suggestions would you give to him with regard to the sports administration ? Tell me in bullets.

Me : Focus on infrastructure, diet and nutrition of the players, have the best of the coaches – be it Indian, be it foreign, Make use of technology in Sports…

BM : I think the main focus should be on infrastructure.

Me : Yes Sir, infact, that was the first point I mentioned. I will give you a very small instance. Last year, we had the Hockey World Cup in New Delhi. The performance of the Indian team was very dismal. If we compare the hockey infrastructure of India with  Spain, we’ll find that Spain has so many astroturfs, which India desparately lacks. This is the prime infrastructure issue.

BM : But, in cities like Pune, we have very developed infrastructure but nobody makes use of it . What’s the reason ?

Me : In my opinion, the prime reason is that the parents do not support their children to take up sports as their career. They don’t see any future in sports. Even my parents never encouraged me to become the best athlete in the country. They don’t find it lucrative.

BM : If you are asked to imitate any of your neighbouring countries with regards to sports administration, which country would you imitate and emulate ?

Me : Undoubtedly China, Sir.

BM : Do you think that Chinese sportsmen play to earn money ?

Me : I do not have much idea about that Sir. But yes, they start it very early and we often see that in 5-6 years of age, they start training, and become the masters over a period of time, for e.g. in Gymnastics.

BM : Tommorrow, we have India_Pakistan match. Where ?

Me : At Mohali, Sir.

BM : Let’s say, you are a District Magistrate of Mohali. A bomb blast takes place during the match. What will you do ? Tell me step by step.

Me : Sir, the very first thing I will do would be to ensure the security of the masses along with the VIPs. The security of the Pakistani PM Mr Gilani is also very vital. I will ensure the quick evacuation of the stadium. For this, I will make open all the exit points. Thereafter, I will totally cordon off the place where the blast has taken place and nobody shall be allowed to enter that place.…

BM : But Manpreet, what about the casualities ? You are evacuating the place first, what will happen to the casualities ? Evacuation may lead to stampede.

Me : Yes Sir, That is the reason I will go for safe evacuation first to avoid the stampede. Because, if stampede happens, it will lead to further casualities. Perhaps, both the things have to be done simultaneously.

Chairman : Why do you think SAARC is not picking up, unlike ASEAN ? any particular reason ?

Me : The reason which I consider the most important is the hostility between India and Pakistan. (The Chairman suddenly made a furious face). I think, conflict of interests is the most appropriate word to be used here instead of hostility. Even if we compare SAARC with European Union, we have not been able to bring about the long proposed common currency like Euro. Apart from this , within SAARC, we see many positive events also happening. Like the kind of financial assistance which India gives to Bhutan is phenomenal. Infact, we  have set up various thermal power stations there.

Ch : But, that is at the bilateral level.

Me : Yes Mam, I think the conflict of interest between Indian and Pakistan is holding the SAARC behind.

Ok Manpreet, you can go.

My SCORE : 219/300