24 things you should know about Draft GST Rules and Forms

With enactment of 101st Constitution Amendment Act, the road to GST is clear. The Govt. had already unveiled draft model law on GST. On 26th September, 2016 CBEC released draft rules and forms under GST on Registration, Invoice and Payment. GST council has also approved of draft rules in its meeting on 30th September, 2016. Key takeaways of draft rules and forms are given hereunder:

Registration
1.	The application for GST registration will be made online either directly on the GSTN Portal or through Facilitation Centres.
2.	The proper officer will examine registration application and grant registration within 3 common working days.
3.	If the application is found deficient, then applicant will be intimated within 3 common working days. Thereafter, applicant has to furnish information or documents sought within 7 working days electronically. If the proper officer is satisfied with such details, then he will grant registration within 7 common working days from date of receipt of such details.
4.	The person obtaining registration as casual dealer is required to make advance deposit for estimated tax liability for the period for which registration is sought.
5.	The registration certificate must be displayed at principal place of business and at every additional place of business. GSTIN (i.e. registration number) must be displayed in the name board at the entry point of business premises.
	Invoice
6.	Supplier needs to mention following details in invoice if recipient is unregistered and taxable value of supply is Rs 50,000 or more:
	♦   Name and address of recipient;
	♦   Delivery address along with the name of State.
7.	Every invoice should contain place of supply if supply is in course of inter-State trade or commerce.
8.	Three copies of invoice should be prepared in case of goods and only two copies of invoice are needed in case of services.
9.	In case of taxable supply of services, the invoice shall be issued within 30 days from date of supply of services. However, no time-period is specified for issuance of invoice in case of supply of goods.
Returns
10.	The registered taxable person is required to file details of outward supplies in Form GSTR-1 electronically. The recipient will receive GSTR 2A on the basis of details furnished by supplier in GSTR 1.
11.	The recipient will file details of inward supplies in GSTR 2 electronically on basis of details contained in GSTR 2A. The recipient shall specify the details of inward supplies for which he is not eligible for input tax credit and quantum of such ineligible input credit.
12.	The registered taxable person (other than composition dealer) shall file monthly return in GSTR-3. Part of this return will be electronically generated from GSTR 1, GSTR 2, electronic credit ledger, electronic cash ledger and electronic liability register.
13.	A notice in Form GSTR 3A will be sent electronically to a registered taxable person who fails to file returns.
Payments
14.	The electronic tax liability register, electronic credit ledger and electronic cash ledger will be maintained on the common portal for every registered person.
15.	The electronic tax liability register shall be debited with amount of tax, interest, late fee, mismatch in credits, etc. It shall be credited with amount paid through electronic cash register or electronic credit register.
16.	The electronic credit ledger of taxpayer will show the details of invoice and amount of credit. It will also show details of credit matchingor mismatching.
17.	The electronic cash ledger shall be credited with the amount deposited and debiting with the payment therefrom towards tax interest, penalty, fee or any other amount.
18.	The final acceptance of input credit will be made available to registered taxable person through Form GST ITC 1 electronically.
Refund
19.	The refund claimed in Part B of GSTR-3 shall be deemed to be an application filed for refund.
20.	The provisional refund, i.e., 80% of refund claimed shall be granted on satisfaction of following conditions:-
	♦   Person claiming refund has not been prosecuted for any offence under GST during any 5 preceding years. If he has been prosecuted under an earlier law, the amount of tax evaded should not exceed Rs.2,50,000.
	♦   GST compliance rating of the applicant is not less than 5 on a scale of 10.
	♦   No proceeding for any appeal, review or revision is pending on issues which form the basis of the refund andif pending, the same has not been stayed by the appropriate authority or court.
21.	Refund shall be granted after adjusting any outstanding demand payable by the applicant.
22.	If Proper Officer is satisfied that refund is not payable then he shall issue a notice requiring applicant to furnish a reply within 15 days.
23.	Any amount rejected as refund shall be re-credited to the electronic credit ledger.
24.	Person claiming refund of tax paid on inward supplies shall apply for refund in FORM GST RFD-10 once in every quarter.

Interest on I-T refund not taxable at concessional rate of 10% as per Treaty if NR has PE in India

Interest earned by a non-resident on income-tax refund is not taxable in India at concessional rate of 10% as per India-France treaty if such non-resident has a PE in India

In the instant appeal, appellant had sought interpretation of Article 12 of India-France treaty. It contented that interest earned in India on income-tax refund was taxable at 10% as per Article 12(2) of treaty.

The High Court held as under:

1) Plain reading of Article 12 of treaty would make it absolutely clear that Paras 1 and 2 of Article 12 will apply, inter alia, when the recipient of interest does not have a permanent establishment in the country, where he has received interest;

2) There was no dispute that the respondent-assessee had a permanent place of business in India and it had paid tax in India on its income, except income from interest;

3) The interest earned in India on the refund of income-tax was, therefore, not covered by Paras 1 and 2 of Article 12 of the said Treaty. To that extent, the judgment of the Tribunal was to be set aside and, accordingly, the appeal was to be allowed – Director of Income-tax v. Pride Foramer SAS [2013] 40 taxmann.com 100 (Uttarakhand)

Safe Harbour Rules finalized; assessees can opt for any period up to five assessment years

Safe Harbour means the circumstances in which the income-tax authorities accept the transfer price declared by assessee. Draft Safe Harbour Rules were placed in public domain on 14.08.2013 for seeking comments from various stakeholders. After receiving their inputs Safe Harbour Rules (‘SHRs’) have been finalized. The gist of modifications incorporated in the final Safe Harbour Rules are as under:

1) The SHRs shall be applicable from the assessment year 2013-14 for five assessment years. An assessee can opt for the safe harbour regime for a period of his choice but not exceeding 5 assessment years;

2) Earlier ceiling of Rs 100 crores has been removed for transactions in the nature of routine ITES/ITS, corporate guarantees and KPO;

3) Routine IT/ITES transactions have been provided safe harbour margin of 20% for transactions up to 500 crores and 22% for transactions above Rs.500 crores;

4) On corporate guarantees reduced safe harbour margin of 1.75% is applicable for transactions above Rs 100 crores if wholly owned subsidiary has been rated to be having adequate to highest safety norms by rating agency;

5) The definition of KPO has been rationalized to provide a reasonable distinction from routine BPO activity and its safe harbour margin has been reduced from 30% to 25%;

6) Once the option exercised by the assessee is held as valid it shall remain so for the opted period unless the assessee voluntarily opts out of safe harbour regime by furnishing a statement to this effect to the Assessing Officer;

7) The assessee is required to submit a statement regarding the quantum of international transactions, its nature, the operating margins, etc., for the period for which safe harbour option is exercised;

8) The option exercised by the assessee can be held as invalid subsequently if there is change in the facts and circumstances relating to the eligibility of the assessee or in international transaction.

Certificate of registration as Income Tax Practitioner is mandatory for representation before revenue authority

Mere possession of educational qualification without undergoing departmental examination is not sufficient to have any right to practice as Income Tax Practitioner. Representative can’t appear before revenue authorities without any certificate of registration as Income Tax Practitioner (‘ITP’)

1) Mr. Y (representative of assessee) was not advocate registered with the State Bar Council. Therefore, he should not have claimed that since he was retired departmental Officer, therefore, without any certificate of registration as ITP he could appear before the Income-tax Authorities and the Tribunal;

2) He had also admitted that though he was practicing in Gwalior, but he was not registered with the CIT, Gwalior. His claim was totally wrong and his conduct was liable to be impeached. Section 288(2)(v) & (vi) provides the meaning of ‘authorized representative’ who have passed any accountancy examination recognized by the Board or any person who has acquired such educational qualifications prescribed by the Board in this behalf;

3) Mere possession of educational qualification without undergoing departmental examination by the Board isn’t sufficient to have any right to practice as ITP. According to Rule 53, 54 and 55 of the IT Rules, the Chief CIT or the CIT shall have to maintain prescribed form to register ITP to whom certificate is issued;

4) The person, who claims to be registered as ITP shall have to file proper application supported by documents to prove his accountancy examination recognized and educational qualifications achieved by him as per Rules;

5) The above provisions of the IT Act and IT Rules clearly prove that Mr. Y is not ITP as provided in the Income-tax Act and Rules. Therefore, without any certificate of registration in his favour under the above provisions, he couldn’t practice before the IT authorities and the Tribunal - SAMAGRA VIKAS MAHILA SAMITI V. CIT [2013] 35 taxmann.com 390 (Agra - Trib.).)

Retention money isn’t an income of contractor if it has got no rights on it till satisfactory completion of work

If assessee was awarded a contract in terms of which certain amount was withheld by contractee towards retention money for satisfactory execution of contract, such retention money won’t represent assessee's accrued income

In the instant case the assessee had entered into contracts with the companies for onshore construction and erection activities. In terms of the contracts, amounts at the rate of 10% on the onshore activities and at the rate of 15% on the construction and erection activities were to be withheld by companies towards retention money. The AO while framing the assessment held that retention money relating to the satisfactory execution of the contract to be treated as assessee’s accrued income. The assessee, however, contended that it had no right on such retention money till completion of the work and, therefore, the same would have to be recognized only on satisfaction of the terms of the contract. On appeal, the CIT (A) and the Tribunal held in favour of assessee.

The High Court held as under:

1) For the purpose of ascertaining whether income had, in fact, accrued, one has to also see whether there is a real income. No matter by adopting any method the assessee maintains his accounts, be it the cash system or be it the mercantile system. However, in both cases unless there is real income, there cannot be any income tax;

2) In the instant case also, there was no real income as no debt had been created in favour of the assessee by virtue of the contract and the assessee did not get any right to receive the retention money during the previous year. Thus, it couldn’t be said that income in respect of the such retention money had accrued to the assessee during the previous year;

3) A similar question had arisen in case of CIT. v. Simplex Concrete Piles (India) Pvt. Ltd. 179 ITR 8, (Cal.) in which it was held that when there was a clause with regard to retention money, the assessee would get no right to claim any part of the retention money till satisfactory execution of the contract and, therefore, if there was no immediate right to receive the retention money, it couldn’t be said to have accrued to the assessee;

4) In the instant case, so far as retention money was concerned, the assessee had no right to receive the same and, therefore, it couldn’t be said that retention money had accrued to the assessee – DIT (International taxation) v. Ballast Nedam International [2013] 34 taxmann.com 270 (Gujarat)

Tiny pen drive enough to pin you down – ITAT accepts pen drive as admissible evidence in IT proceedings

Pen drive and print outs taken from it constituted admissible evidence in income-tax proceedings and formed a basis for investigation and additions

In the instant case the assessee was arrested by Punjab Police and pen drive was recovered from him containing details of his dealings, which was forwarded by police to IT Department with the printouts. The AO reopened the assessment and cited the pen drive and printouts in reasons recorded. On appeal, the CIT(A) upheld the additions made by AO. Aggrieved-assessee appealed to the ITAT and contended that that the pen drive was not an admissible evidence for reopening assessment and that various provisions of Cr. P.C., IPC, Indian evidence Act and Cyber Laws had been violated by Punjab Police during search.

The Tribunal held in favour of revenue as under:

1) Assessee’s objections had no effect on recordings of reasons by AO for forming a belief about escapement. It is trite law that technical rules of Evidence Act and Cr. P. C. were not applicable to these proceedings;

2) From the record it had emerged that many of the entries mentioned in the pen drive belonged to various business concerns of the assessee in which he was associated with in the capacity of director or partner;

3) They were explained by the assessee though on a prejudicial basis, but the fact remained that the entries had correlation with assessee’s activities. Thus, the contents of the pen drive would become admissible evidence in Income Tax proceedings and would form a basis for investigations and additions.

4) Consequently, pen drive and printouts thereof constituted admissible evidences in those proceedings. The reasons for reopening were recorded on the basis of those contents;

5) The reasons recorded for escapement of income and the material available on record with AO had a live link with each other. Thus, the reasons for reopening the assessments were properly recorded by AO - Chetan Gupta v. ACIT [2013] 34 taxmann.com 306 (Delhi - Trib.)

Valuation loss is allowable even if stock-in-trade shown as investment in compliance of RBI guidelines

Even though assessee-bank disclosed shares as investments in balance sheet to comply with RBI Guidelines, it was not estopped from treating the same as stock-in-trade for income-tax and claiming valuation loss thereon as these shares had been consistently shown as stock-in-trade in income tax in the past years also

The High Court held as under:

1) For the purpose of IT Act, as the assessee had consistently been treating the value of investment for more than two decades as stock-in-trade and claiming valuation loss thereon, it was not open to the authorities to disallow the said loss on the ground that in the balance-sheet it was shown as investment in terms of the RBI Regulations;

2) The question whether the assessee was entitled to particular deduction or not would depend upon the provisions of law relating thereto and not the way, in which the entries were made in the books of account. It was not decisive or conclusive in the matter;

3) The value of the stocks being closely connected with the stock market, at the end of the financial year, while valuing the assets, necessarily the Bank had to take into consideration the market value of the shares;

4) If the market value of shares was less than the cost price, they were entitled to deductions and it couldn’t be denied by the authorities under the pretext that it was shown as investment in the balance sheet;

5) The order passed by the authorities holding that in view of the RBI guidelines, the assessee was estopped from treating the investment as stock-in-trade was not correct. That finding recorded by the authorities was to be set aside - Karnataka Bank Ltd. v. ACIT [2013] 34 taxmann.com 150 (Karnataka)

Ambiguous language in Bill can’t be compared with Act ratifying it; SB ruling in Merilyn Shipping’s case not acceptable

The provisions of section 40(a)(ia) of the Income Tax Act, 1961, are applicable not only to the amount which is shown as payable on the date  of balance-sheet, but it is applicable to such expenditure, which become payable at any time during the relevant previous year and was actually paid within the previous year.

In the instant case, following issue came for consideration of High Court:

“Whether Special Bench ruling in Merilyn Shipping’s case lays down the correct law in respect of interpretation of section 40(a)(ia)”?

The High Court declined to accept the proposition given by the ITAT Special Bench in the case of Merilyn Shipping’s with following observations:

1) The provisions of section 40(a)(ia) of the Income Tax Act, 1961, are applicable not only to the amount which is shown as payable on the date of balance-sheet, but it is applicable to such expenditure, which become payable at any time during the relevant previous year and is actually paid within the previous year;

2) Comparison between the pre-amendment and post amendment law is permissible for the purpose of ascertaining the mischief sought to be remedied or the object sought to be achieved by an amendment. But the comparison between the draft and the enacted law isn’t permissible. Nor can the draft or the bill be used for the purpose of regulating the meaning and purport of the enacted law. It is the finally enacted law which is the will of the legislature;

3) The Learned Tribunal fell into an error in comparing the wordings of the provisions of Finance Bill and Finance Act for interpretation purposes;

4) The key words used in Section 40(a)(ia) are “on which tax is deductible at source under Chapter XVII –B”. If the question is “which expenses are sought to be disallowed?” The answer is bound to be “those expenses on which tax is deductible at source under Chapter XVII –B. Once this is realized nothing turns on the basis of the fact that the legislature used the word ‘payable’ and not ‘paid or credited’. Unless any amount is payable, it can neither be paid nor credited”;

5) The language used in the draft was unclear and susceptible to giving more than one meaning. By looking at the draft it could be said that the legislature wanted to treat the payments made or credited in favour of a contractor or sub-contractor differently than the payments on account of interest, commission or brokerage, fees for professional services or fees for technical services because the words “amounts credited or paid” were used only in relation to a contractor or sub-contractor. This differential treatment was not intended. But the language used by the legislature in the finally enacted law is clear and unambiguous whereas the language used in the bill was ambiguous. Majority views expressed in the case of Merilyn Shipping & Transports are not acceptable - CIT v. Crescent Export Syndicate [2013] 33 taxmann.com 250 (Kolkata)

HC upholds transfer of order under sec. 127 for co-ordinated investigation; recommends US like ‘restatement of law’

Order of transfer of cases under section 127(2) is administrative and not quasi-judicial merely because assessee is required to be heard before the order is passed. The word 'coordinated investigation' is not vague. It has a definite meaning. The transfer order can’t be set aside merely on the ground that the transfer has been done on vague terms.

In the instant case, following issues arosed before Chattisgarh HC:

A. Whether the power of transfer under Section 127(2) of the Income Tax Act, 1961 is not a judicial power?

B. Order of transfer under sec. 127(2) can’t be passed when there is denial of reasonable opportunity to the assessees?

C. Whether the word 'co-ordinated investigation' is vague and the transfer order can be set aside merely on the ground that the transfer has been done on vague terms?

Deliberating on these issues, the HC held as under:

1) Section 127(2) of the Act provides that transfer can be done only if opportunity is afforded to an assessee and after recording reasons. But merely for this reason it cannot be said to be quasi-judicial in nature;

2) The transfer order does not decide the rights of the parties in the assessment;

3) The ultimate order deciding the right is the order of the assessment which decides the basis and the tax to be paid. This order is a judicial order. The transfer order is merely for administrative reason and it cannot be said that nature of power is judicial;

4) It was not disputed that the search took place in the premises of Mahamaya group of companies, as well as residential and official premises of its directors and its employees, at different places, where incriminating documents were seized;

5) The documents were inter-connected and affected the assessment of the parties. It was necessary to see their overall effect on the assessments. It could only be done after analyzing and investigating into all the documents found at different places and not separately, for which a co-ordinated investigation was necessary. Thus, the words 'coordinated investigation' were not vague;

6) The notice had indicated the reason for transfer as 'centralisation' for 'co-ordinated investigation'. It was for this reason that order for transfer were made. There was no denial of reasonable opportunity to the assesses.

In addition to the aforesaid findings, the HC also recommended adoption of US-like 'restatement of law'

The submissions raised by the party should have been considered before arriving at the decision. But more often than not, there was an insistence on dealing with every case that was cited. Perhaps, such insistence, even if the decisions were inapplicable or irrelevant, was misplaced. It might not be proper to record in the judgement that a counsel had cited irrelevant, or inapplicable, or overruled, or already distinguished case. It would be of real help to our jurisprudence if we also adopted an approach similar to the US, about 'Restatement of Indian law' – CIT V. UNION OF INDIA [2013] 32 taxmann.com 320 (CHHATTISGARH)

CBDT mandates e-filing of audit report and return with 5 lacs income; no more ITR 1 if Sec. 10 benefit exceeds 5k

Audit report to be filed electronically; threshold limit for e-filing of return reduced to Rs. 5 lakhs; return can’t be filed in ITR-1 if assessee earns exempt income which exceeds 5,000.
Income-tax (3rd Amendment) Rules, 2013 redefines the conditions and eligibility to choose from a variety of Income-tax return forms. In addition, certain important amendments are also being brought in, which are as follows:

1) Return in ITR 1 can’t be filed if assessee incurs losses under the head ‘Income from other sources’.

2) Return in ITR 1 can’t be filed if assessee claims tax relief or has any income which is exempt under Chapter III i.e. section 10, 10A, 10AA, etc.

3) Return in ITR 4S can’t be filed if assessee claims tax relief or has any income which is exempt under Chapter III i.e. section 10, 10A, 10AA, etc.

4) Mandatory e-filing of audit reports.

5) Mandatory e-filing of return if income exceeds Rs. 5,00,000 or if assessee claims tax relief.

Mere classification of account as NPA doesn’t demonstrate uncertainty in collection of interest thereon

In the instant case, the assessee was a Non-Banking Financial Corporation. For the relevant assessment years, AO added interest accrued on non-performing assets (‘NPA’) to the assessee's taxable income. The CIT(A) allowed assessee's appeal holding that the interest accrued on NPA was not exigible to income tax. On revenue’s appeal, the Tribunal upheld the order of CIT(A), and held that no addition could be made in the hands of assessee in respect of unrealized accrued interest when the loan was classified as NPA. Aggrieved by the order of Tribunal, revenue preferred an appeal to the High Court.

The HC held in favour of revenue as under:

1) Mere characterization of an account as NPA wouldn’t by itself sufficient to say that there was uncertainty as regards realization of income or interest income thereon;

2) Accrual of interest is a matter of fact to be decided separately for each case on the basis of examination of the facts and circumstances. The same would require an assessment of the relevant facts and circumstances. Only by assessment of facts and circumstances, the authority could arrive at a decision whether there is uncertainty about accrual of interest income on NPA. Only when there is uncertainty of realization of income or interest income then it is not chargeable to tax;

3) AO hadn’t recorded any finding whether there was any uncertainty in collection of income and, moreover, there was nothing to indicate that the 'interest income' was non-recoverable. The CIT(A) and the Tribunal hadn’t considered the matter in the light of the decision of the Supreme Court in the case of Southern Technologies Ltd. v. Jt. CIT [2010] 187 Taxman 346.

4) Thus, the order of the Tribunal was set aside and the matter was remitted back to the AO for consideration afresh in the light of law laid down by the Supreme Court in Southern Technologies Ltd. (supra) – CIT v. Sakthi Finance Ltd [2013] 31 taxmann.com 305 (Madras)

Concealment penalty is inevitable if bogus claim is withdrawn in revised return filed after initiation of survey

The assessee, a public limited company, claimed a deduction of Rs. 10,00,000 under section 35CCA purportedly paid to a trust for assessment year 1983-84. Subsequently, the claim was withdrawn by filing a revised return. During assessment, the AO observed that assessee had revised its return of income only as a result of survey action taken by revenue in the assessee’s premises. It was further noticed by AO that the assessee was in knowledge of the fact that the trust was not genuine and had deliberately made a false claim under Sec. 35CCA to reduce its taxable income. Accordingly, the AO imposed the maximum penalty, being 200% of the tax sought to be evaded. On appeal, the CIT(A) as well as ITAT held in favour of assessee.

On revenue’s appeal, the High Court held in favour of revenue as under:

1) The assessee made the donation through cheque, which was encashed through a bogus bank account opened specifically for this purpose;

2) It was evident from the records that bank account of the drawee had been opened in a fictitious name merely for the purpose of misappropriating the amount;

3) The assessee’s contention that it was a victim of a fraud played by several persons acting in concert couldn’t be accepted because the special crossing (‘account
payee’) in the cheque was converted or altered into an ordinary crossing by the assessee’s account manager and senior advisor who had also affixed their signatures;

4) The revised return was filed by assessee only when it was cornered and the income tax authorities had collected material on the basis of which it could be said that the claim for deduction was false or bogus.

From the above facts, it was held that filing of revised return was an act of despair and it couldn’t benefit the assessee in any way. Accordingly, penalty order passed by AO was restored – CIT v. Usha International Ltd. [2012] 27 taxmann.com 227 (Delhi)

US Court hails Rajat Gupta’s ‘big heart and helping hand’ but jails him for insider trading

Rajat Gupta was the director of Goldman Sachs. He was privy to information which would affect company’s share prices but not known to public. Gupta was found guilty by the jury for insider trading i.e. for leaking some unpublished price sensitive information in 2008. Gupta tipped off Rajaratnam about Warren Buffett’s soon-to-be-announced infusion of $5 billion into Goldman Sachs. Rajaratnam purchased large quantities of Goldman stock just before the market closed and booked a gain of $1,231,630 by selling the stock next morning when the Buffett investment was announced and stock prices surged. The crimes merited a prison sentence of 78-97 months under the Sentencing Guidelines of the US. Given Gupta’s exemplary humanitarian record, the US District Court of New York let him off with a ‘non-Guidelines’ sentence of 2 years prison.

The Court noted Gupta’s devotion of a huge amount of time and effort to a very wide variety of socially beneficial activities, such as the Global Fund to Fight AIDS, TB and Malaria, the Public Health Foundation of India etc. Such activities were illustrations of his big heart and helping hand. The Court hailed Gupta’s “extraordinary devotion, not only to humanity writ large, but also to individual human beings in their times of need”.

On the other hand, Gupta's criminal acts represented the very antithesis of his humanitarian record. With Goldman Sachs in turmoil but on the verge of being rescued by an infusion of $5 billion, Gupta, within minutes of hearing of the transaction, tipped Rajaratnam, so that the latter could trade on this information in the last few minutes before the market closed. This was the functional equivalent of stabbing Goldman in the back.

The Court had to balance both extremes while awarding a sentence to Mr. Gupta. Taking Court observed that “meaningful punishment is still necessary to reaffirm society's deep-seated need to see justice triumphant. No sentence of probation, or anything close to it, could serve this purpose.”

The Court took note of the provisions of the United States Code which require that the Court had to consider the need to afford specific deterrence and general deterrence. As to specific deterrence (i.e. deterring the convict repeating it in future), the Court held that loss of reputation suffered by Mr. Gupta would deter him from repeating his transgressions in future and no further punishment is needed to achieve this result. The need for general deterrence (i.e. to set an example to others), however, suggested different conclusion. Insider trading is an easy crime to commit but a difficult crime to catch. It was necessary to send out the message “when you get caught, you will go to jail”. After carefully weighing the above, the Court sentenced Rajat Gupta to 24 months' imprisonment, concurrent on all counts, to be followed by one year of supervised release and a fine of $5,000,000.

Indians need not despair that, unlike US, legal system moves slowly in India. Two recent instances offer rays of hope. One, the death sentence of Ajmal Kasab for terrorist acts on 26-11-2008 upheld by the Supreme Court in 2012. The other being two Sahara companies found guilty by the Supreme Court of public issue of securities (Optionally Fully Convertible Debentures) in the garb of private placement in 2008. Companies ordered to refund amounts collected from public. This whole case was successfully handled by SEBI, Securities Appellate Tribunal and the Supreme Court in two years flat from 2010 to 2012.