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    1. The Central Government has issued various notifications dated 30th March 19 to bring out the changes to the tax rates applicable for real estate sector. In this note, we have made an attempt to understand the impact of such notifications and the way forward for the promoters. Without any further delay, let us proceed to understand the notifications.

    Snapshot of Changes:
    2. Essentially, the notification dealing with rate of tax has categorised, the projects as under:



    • Section 145(2) of the Income Tax Act,1961 (“the Act”) grants power to Central Government to notify Income Computation Disclosure Standards.
    • So far 10 ICDS were notified by Central Government on 31stMarch,2015. However, they are made applicable from the Assessment Year 2017 -18 with a specified deferment period of one year from date of its implementation.
    • ICDS are NOT for maintenance of books of accounts, they are only for the purpose of
    • Income Computation &
    • Disclosure (Notification S.O.892(E) dated 31.03.2015)

    Note: In the case of conflict between the provisions of the Act and the ICDS, the provisions of the Act shall prevail to that extent.


    General Meaning of Shell Company:

    The Companies Act does not define “Shell Company” and no other piece of Legislation provides for the guidance on what does it constitutes; however, the general definition is understood as:

    “A shell company is a company that exists only on papers, without active business operations or significant assets and has no office or employees. These types of companies are not necessarily be illegal, but they are sometimes used illegitimately, such as to disguise business ownership from law enforcement or the public. Legitimate reasons for a shell company include such things as a start up using the business entity as a vehicle to raise, funds, conduct a hostile takeover or to go public.”



    High sea sale means a sale where goods will be sold when they are in High sea i.e., Sale transaction will be done when the goods are in transit, before the goods are entered in to customs clearance. The major benefits from High sea sale will be original importer can buy them at cheaper cost and can sell at profit, for original buyer he can buy goods in a short time, where importing from origin country will take more time, further he is not required to buy entire shipment, he can buy part shipment based on his requirement.

    In this article, I am going to discuss about the  Audit considerations of High sea sales.

    Let us understand the meaning of High sea sale and other related definitions first, to gain comfort on those terms.


    The purpose of the audit report is to summarize the findings in a way that auditee management can readily understand and see the impact of these findings. The audit report represents the end result of weeks of reviews, analyses, interviews and discussions. It provides important information to audit clients about the area reviewed by internal audit.

    More importantly, it provides details to management about significant issues that need to be addressed. How well internal auditors communicate that information is critical to getting their client’s acceptance of findings and their agreement with audit recommendations.