BUSINESS LAW AND REGULATIONS PPT FORJNTUH MBA

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INTRODUCTION TO LAW OF CONTRACT : 

COMPILED BY,VIVEK. DEP OF MBA SITS. KMM INTRODUCTION TO LAW OF CONTRACT Law of contract is the most important and basic part of mercantile law, and it is the foundation for various other laws falling under mercantile law. Its not only the merchants or traders but every human being in an organized society ,consciously or unconsciously enters in to a contract. As contracts are the basic of most of the business transactions ,law of contract is of great significance to all mercantile people ,traders ,owners, partnership firms , banks ,etc engaged in commercial activity .

ENFORCEABILITY : 

COMPILED BY,VIVEK. DEP OF MBA SITS. KMM ENFORCEABILITY An agreement to become a contract must have enforceability by law . It must give rise to legal obligation. legal obligation means a legal tie among the persons doing or performing an act . So agreements may be social or legal related but social contracts do not give rise to legal obligations.

HISTORY OF INDIAN CONTRACT ACT -1827 : 

COMPILED BY,VIVEK. DEP OF MBA SITS. KMM HISTORY OF INDIAN CONTRACT ACT -1827 The law related to contracts in India is contained in the Indian contract act 1872 The act came in to force with effect from sep 1 1872

THE ACT AS ENACTED HAS 266SECTIONS DIVIDED IN TO FOLLOWING GROUPS : 

COMPILED BY,VIVEK. DEP OF MBA SITS. KMM THE ACT AS ENACTED HAS 266SECTIONS DIVIDED IN TO FOLLOWING GROUPS General principles of law of contract - 1to75. Contracts related to sale of goods -76 to 124. Special kind of contracts (indemnity, guarantee, bailment etc ) -125 to 238. Contracts relating to partnership -239 to 266.

CONTRACT : 

COMPILED BY,VIVEK. DEP OF MBA SITS. KMM CONTRACT DEFINITION:CONTRACT is a term derived from the Latin word “CONTRACTUM” ,which means “DRAWN TOGETHER” sec 2(H) of the Indian contract act 1872 defines contract as “AN AGREEMENT ENFOCEABLE BY LAW”. Acc to Pollock: Every agreement and promise enforceable at law is a contract. Acc to salmond: Contract is an agreement creating and defining obligations between the parties. SO, a contract consists of an agreement and its enforceability by law

AGREEMENT : 

COMPILED BY,VIVEK. DEP OF MBA SITS. KMM AGREEMENT AGREEMENT is defined as “every promise and set of promises forming consideration for each other” (sec2(e)). PROMISE is defined as “when the person to whom the offer is made signifies his approval, the proposal is said to be accepted”. CONSIDERATION: its nothing but something in return of doing something

Slide 7: 

COMPILED BY,VIVEK. DEP OF MBA SITS. KMM CONTRACT=AGREEMENT+ENFORCEABILITY AT LAW AGREEMENT=OFFER+ACCEPTANCE

Essential elements of valid contract : 

COMPILED BY,VIVEK. DEP OF MBA SITS. KMM Essential elements of valid contract Offer and acceptance. Consideration-lawful consideration with lawful object. Capacity of parties to contract. Free consent . Agreement should be declared valid it shouldn’t be void. Writing and registration, if so required by law. Legal relationship. Certainty. Possibility of performance. Enforceable by law.

OFFER OR PROPOSAL : 

COMPILED BY,VIVEK. DEP OF MBA SITS. KMM OFFER OR PROPOSAL DEFINITION –Sec2(a) defines Proposal (offer) as “when one person signifies to another person his willingness to do or to abstain from doing anything with a view to obtain the assent of that other person to such act or abstinence he is said to make a proposal”. The person making such offer or proposal is proposer or offerer. Sec2(c) states person making the proposal as promisor and the person accepting the proposal as promisee.

ESSENTIALS OF A VALID PROPOSAL OR AN OFFER : 

COMPILED BY,VIVEK. DEP OF MBA SITS. KMM ESSENTIALS OF A VALID PROPOSAL OR AN OFFER Beyond expression of willingness ,there must be something in the nature of a request. Proposer cant dictate terms . Offer must be intended ,capable of creating legal relations ,the agreement must have an express or tacit reference to the legal relations between the parties ,there must be a common intention of the parties to enter in to legal obligation.

Slide 11: 

COMPILED BY,VIVEK. DEP OF MBA SITS. KMM A simple statement of intention does not constitute a binding promise even though a person to whom it is made acts up on it. The words used must apply to definite persons to create legal relations .the offer must be made to a definite person . The terms of offer must be certain and instantly recognizable . An offer can be express or implied from the circumstances.

Slide 12: 

COMPILED BY,VIVEK. DEP OF MBA SITS. KMM An offer must be communicated to an offeree .A person cant accept an offer unless he knows of the existence of the offer. An offer may be conditional but the conditions must be clearly communicated . A conditional offer lapses when the condition is not accepted by the offeree. The offeror should intend to be bound by it as soon as it is accepted by the offeree he shouldn’t reserve to himself any furthur act to be done on his part ,if he does so ,then its an invitation to an offer and not an offer. There is no contract between the parties unless the offer is accepted ,so it can be withdrawn before it is accepted.

TEST TO DETERMINE WHETHER THE PROPOSAL MADE IS VALID OR NOT : 

COMPILED BY,VIVEK. DEP OF MBA SITS. KMM TEST TO DETERMINE WHETHER THE PROPOSAL MADE IS VALID OR NOT Intention of the proposer - Does he intend to create a legal obligation and stand to be bound by it as soon as it is accepted by the other. Is the offer communicated to the person to whom it is definitely intended to be made.

COUNTER-OFFER : 

COMPILED BY,VIVEK. DEP OF MBA SITS. KMM COUNTER-OFFER A COUNTER-OFFER IS A REJECTION OF THE ORIGINAL OFFER .IT IS A NEW OFFER .THIS NEW OFFER IS TERMED AS COUNTER-OFFER

COUNTER-OFFER : 

COMPILED BY,VIVEK. DEP OF MBA SITS. KMM COUNTER-OFFER A COUNTER-OFFER is a REJECTION of the ORIGINAL OFFER ,Its a NEW OFFER .This new offer is termed as COUNTER-OFFER. Simply said as OFFER TO AN OFFER .

ACCEPTANCE : 

COMPILED BY,VIVEK. DEP OF MBA SITS. KMM ACCEPTANCE DEFINITION :According to sec2(b) when the person to whom the proposal is made signifies his assent thereto ,the proposal is said to be accepted . A proposal when accepted becomes a promise. Sec2(c) states person making the proposal as promisor and the person accepting the proposal as promisee.

Slide 17: 

COMPILED BY,VIVEK. DEP OF MBA SITS. KMM Performance of the conditions of a proposal, The acceptance of any consideration for reciprocal promise which may be offered with a proposal is an acceptance of the proposal (sec 8). An acceptance need not always be expressed in words . performance of the conditions of a proposal is an acceptance of the proposal. There must be absolute and unconditional acceptance of the terms of a proposal.

ESSENTIALS OF A VALID ACCEPTANCE : 

COMPILED BY,VIVEK. DEP OF MBA SITS. KMM ESSENTIALS OF A VALID ACCEPTANCE RULES Acceptance must be absolute and unqualified. Mode of acceptance-acceptance must be expressed in some usual and reasonable manner. Mental acceptance is not sufficient in law. 4. Acceptance must be communicated to the offeror. 5. Acceptance of the proposal.

Slide 19: 

COMPILED BY,VIVEK. DEP OF MBA SITS. KMM 6.Acceptance of the proposal need not always be expressed in words. 7.Acceptance must be by a certain person. 8.If the act is done in ignorance of the proposal ,it is not acceptance of the proposal. 9.Acceptance must be given within a reasonable time. 10.Acceptance must be given before the offer lapses or is revoked or is withdrawn.

CONSIDERATION : 

COMPILED BY,VIVEK. DEP OF MBA SITS. KMM CONSIDERATION Acc to Sec 2(d) of the INDIAN CONTRACT ACT CONSIDERATION is: When at the desire of the promisor, the promisee or any other person (1)Has done, or abstained from doing, or (2)Does or abstains from doing ,or (3)promises to do or to abstain from doing something . Such act or abstinence or promise is consideration for the promise.

Slide 21: 

COMPILED BY,VIVEK. DEP OF MBA SITS. KMM Acc to Pollock “consideration is the price for which the promise of other is bought , and the promise thus given for value is enforceable”. Every contract consists of two parts: (a) promise .(b) Consideration for the promise . Simply said consideration is QUID PRO QUO “something in return of something.”

ESSENTIALS OF A VALID CONSIDERATION : 

COMPILED BY,VIVEK. DEP OF MBA SITS. KMM ESSENTIALS OF A VALID CONSIDERATION Consideration must move at the desire of the promisor. Consideration may move from the promisee or any other person –stranger to a contract. Consideration may be past, present or future. Consideration may be an act of doing or abstaining from doing something or it may be an act of forbearance or abstinence .

Slide 23: 

COMPILED BY,VIVEK. DEP OF MBA SITS. KMM Consideration need not be adequate. Consideration must be real and not illusory. Consideration must not be unlawful, illegal, immoral or opposed to public policy. Performance of existing obligation is no consideration. Forbearance to sue is a good consideration.

CAPACITY TO CONTRACT : 

COMPILED BY,VIVEK. DEP OF MBA SITS. KMM CAPACITY TO CONTRACT According to sec 11 of the contract act a person is competent to contract if He/She : Is a major . Is of a sound mind . Is not disqualified from contracting by any law to which he is subject.

MINOR’S AGREEMENT : 

COMPILED BY,VIVEK. DEP OF MBA SITS. KMM MINOR’S AGREEMENT MINORS According to sec3 of the Indian majority act,1875, a person domiciled in India ,who has not completed age of 18 is a minor. A person is treated as minor until the age of 21 in the situation a) Where a guardian to the person or property or both is appointed by the court ,or b) The property of minor is put under the superintendence of court of wards.

WHEN CAN A MINOR CONTRACT : 

COMPILED BY,VIVEK. DEP OF MBA SITS. KMM WHEN CAN A MINOR CONTRACT Promisee or transferee. Agency. Partnership. Necessaries.

PERSONS OF UNSOUND MIND : 

COMPILED BY,VIVEK. DEP OF MBA SITS. KMM PERSONS OF UNSOUND MIND Under sec 12, “A person is said to be of a sound mind for the purpose of making a contract, if at the time when he makes it, he is capable of understanding it and of forming a rational judgment as to its effects up on his interests.” Persons of unsound mind are: Idiots lunatics. Drunken or intoxicated person. A person delirious from fever ,etc.

OTHER PERSONS DISQUALIFIED FOR CONTRACT : 

COMPILED BY,VIVEK. DEP OF MBA SITS. KMM OTHER PERSONS DISQUALIFIED FOR CONTRACT Alien enemy. Insolvent. Foreign sovereigns. Convicts. Joint stock companies and corporations incorporated under special acts.

CONTRACTS BY : 

COMPILED BY,VIVEK. DEP OF MBA SITS. KMM CONTRACTS BY MARRIED WOMEN. CORPORATIONS. INSOLVENTS.

FREE CONSENTconsent : 

COMPILED BY,VIVEK. DEP OF MBA SITS. KMM FREE CONSENTconsent According to sec 13 of the contract act Two or more persons are said to consent when they agree up on the same thing in the same sense. It means that there must be consensus ad idem between the parties regarding the subject matter of the contract .such consensus must have arisen out of free consent in view of the provision of sec 10 “all agreements are contracts if they are made by free consent of the parties.”

FREE CONSENT : 

COMPILED BY,VIVEK. DEP OF MBA SITS. KMM FREE CONSENT Consent alone is not sufficient for a contract. It must also be free. Acc to sec 14, consent is said to be free when it is not caused by any of the following: Coercion. Undue influence. Fraud. Misrepresentation, and Mistake.

Slide 32: 

COMPILED BY,VIVEK. DEP OF MBA SITS. KMM COERCION Under Sec 15 coercion means: 1. (a) The committing or threatening to commit an act forbidden by the Indian penal code,1860 ; (b) The unlawful detaining or threatening to detain any property to the prejudice of any person, whatever. 2. The intention of the above act must be to cause the other person to enter in to an agreement. Sec15 states that it is immaterial whether the Indian penal code is or is not in force where the coercion takes place.

ESSENTIALS TO PROVE AS COERCION : 

COMPILED BY,VIVEK. DEP OF MBA SITS. KMM ESSENTIALS TO PROVE AS COERCION There must be the commitment or threatening to commit any act forbidden by the Indian penal code. The coercion may comprise of unlawful detaining or threatening to detain any property to the badness of any person . May proceed from either a party to the contract or from a stranger.

Slide 34: 

COMPILED BY,VIVEK. DEP OF MBA SITS. KMM Coercion may be directed to the prejudice of any person whatever. The intention of coercion must be to cause the other person to make a contract. The application of IPC or otherwise at the place of coercion makes no difference.

UNDUE INFLUENCE : 

COMPILED BY,VIVEK. DEP OF MBA SITS. KMM UNDUE INFLUENCE Acc to sec16(1) A contract is said to be induced by undue influence when: a) The relation existing between the parties is in a position to dominate the will of the other. b) The party uses that position to obtain an unfair advantage over the other.

Assumptions OF UNDUE INFLUNCE : 

COMPILED BY,VIVEK. DEP OF MBA SITS. KMM Assumptions OF UNDUE INFLUNCE Acc to sec 16(2) ,A person is deemed to be in a position to dominate the will of another in the following cases. a. Real or apparent authority : b. Fiduciary relationship: c. Mental distress:

FRAUD : 

COMPILED BY,VIVEK. DEP OF MBA SITS. KMM FRAUD Sec 17 ,states fraud as “any of the following acts committed by a party to a contract or with his participation or by his agent to induce another to enter in to the contract.” The false suggestion as to a fact known to be false or not believed to be true . The active cover up of a fact by one having knowledge or belief of the fact.

Slide 38: 

COMPILED BY,VIVEK. DEP OF MBA SITS. KMM c. A promise made without any intention of performing it. d. Any other act fitted to deceive. e. Any such act or omission as the law specifically declares to be fraudulent.

MISREPRESENTATION : 

COMPILED BY,VIVEK. DEP OF MBA SITS. KMM MISREPRESENTATION Acc to sec 18 REPRESENTATION means a statement of fact made by one party to the other before or at the time contract is made with regard to some existing facts or some past event which materially induces the formation of the agreement. A wrong representation when made innocently is misrepresentation.

Misrepresentation may be committed in any of the following ways : 

COMPILED BY,VIVEK. DEP OF MBA SITS. KMM Misrepresentation may be committed in any of the following ways 1.unwarranted statements. 2.breach of duty. 3.inducing mistake about subject matter.

MISTAKE : 

COMPILED BY,VIVEK. DEP OF MBA SITS. KMM MISTAKE Mistake is an wrong belief about something. Mistake is of two major kinds: 1.Mistake of law: a. mistake as to Indian law sec 21 says that “a contract is not voidable because it was caused by a mistake as to any law in force in India”. b. mistake as to foreign law “mistake as to of a foreign country vitiates the contract and renders it void. it does not have the same effect as a mistake of fact”

Slide 42: 

COMPILED BY,VIVEK. DEP OF MBA SITS. KMM 2.Mistake of fact: a. Bilateral mistake “Acc to sec 20 where both the parties to an agreement are under a mistake as to a matter of fact, essential to the agreement shall be void.” Therefore a bilateral mistake has two elements. (1) there must be a common or mutual mistake , i.e mistake shared by both or all parties. (2) the mistake must be related to a matter of fact essential to the agreement. b. unilateral mistake Acc to sec 22 a contract is not voidable merely because it was caused by one of the parties to it being under a mistake as to a matter of fact.

LEGALITY OF OBJECT AND CONSIDERATION : 

COMPILED BY,VIVEK. DEP OF MBA SITS. KMM LEGALITY OF OBJECT AND CONSIDERATION For a valid contract , both the consideration and object must be lawful. Object may defined as purpose or design of the contract. Acc to sec 23 ,the object and consideration of an agreement shall be unlawful if: 1.it is forbidden by law. 2.it is of such nature if permitted ,it would defeat the provisions of law 3.it is fraudulent. 4.it involves or implies injury to the person or property of other. 5.the court regards it as immoral or opposed to public policy.

Agreements opposed to public policy : 

COMPILED BY,VIVEK. DEP OF MBA SITS. KMM Agreements opposed to public policy 1.Trading with enemy. 2.Stifling prosecutions. 3.Maintenance and champerty. 4.Marriage brokerage agreements. 5.interfering with course of justice. 6.Trafficking in public offices and titles.

Slide 45: 

COMPILED BY,VIVEK. DEP OF MBA SITS. KMM 7.Agreement restricting personal liberty. 8.Agreement in restraint of parental rights 9.Agreements tending to create interest opposed to duty. 10.Agreements interfering with marital status. 11.Agreements to vary the period of limitation.

CONTINGENT CONTRACTS : 

COMPILED BY,VIVEK. DEP OF MBA SITS. KMM CONTINGENT CONTRACTS MEANING:A contract to do or not to do something, if some event collateral to such contract does or does not happen. Contracts may be either absolute or contingent. ABSOLUTE CONTRACT- a contract in which the parties must perform their reciprocal promises in all events. CONTINGENT CONTRACT-it is a contract to do or not to do something if some event, collateral to such contract does or does not happen.

Slide 47: 

COMPILED BY,VIVEK. DEP OF MBA SITS. KMM ESSENTIALS OF A CONTINGENT CONTRACT Dependence on a future event. Collateral event. uncertain event. Insurance ,indemnity,& guarantee are some examples SECTION 32 TO 36 OF THE CONTRACT ACT CONTAIN THE RULES REGARDING PERFORMANCE OF CONTINGENT CONTRACTS.

RULES REGARDING CONTINGENT CONTRACT : 

COMPILED BY,VIVEK. DEP OF MBA SITS. KMM RULES REGARDING CONTINGENT CONTRACT Contracts contingent on the happening of an event. Contracts dependent on the non happening of an event. Contracts contingent upon the future conduct of a living person. Contracts contingent upon happening or non happening of a specified event within a fixed time. Contracts contingent upon the happening of an impossible event.

PERFORMANCE AND DISCHARGE OF A CONTRACT : 

COMPILED BY,VIVEK. DEP OF MBA SITS. KMM PERFORMANCE AND DISCHARGE OF A CONTRACT PERFORMANCE OF CONTRACT It means fulfillment of the terms of the contract by the respective parties to the contract. Who can demand performance. Who should perform the promise. In case of joint promisor.

DISCHARGE OF CONTRACT : 

COMPILED BY,VIVEK. DEP OF MBA SITS. KMM DISCHARGE OF CONTRACT Means discontinuation of the contractual relation between the parties. When the rights & obligations arising out of a contract are extinguished the contract is said to be discharged or terminated.

MODES OF DISCHARGE : 

COMPILED BY,VIVEK. DEP OF MBA SITS. KMM MODES OF DISCHARGE Discharge by performance. Discharge by mutual consent and agreement. Discharge by subsequent or supervening impossibility or illegality. Discharge by lapse of time. Discharge by operation of law

REMEDIES FOR BREACH OF CONTRACT : 

COMPILED BY,VIVEK. DEP OF MBA SITS. KMM REMEDIES FOR BREACH OF CONTRACT Rescission of contract. Suit for damages. 1.general or compensatory damages. 2.special damages. 3.exemplary ,punitive or vindictive damages. 4.nominal damages. 5.liquidated damages. Suit for specific performance. Suit for injunction. Suit for quantum meruit.

CONTRACTS OF INDEMNITY AND GUARANTEE : 

COMPILED BY,VIVEK. DEP OF MBA SITS. KMM CONTRACTS OF INDEMNITY AND GUARANTEE CONTRACT OF INDEMNITY Acc to sec 124, “a contract of indemnity means a contract by which one party promises to save the other from loss caused by the conduct of the promisor himself or by the conduct of any other person”. The person who promises to make good for the loss is INDEMNIFIER or PROMISOR. The person whose loss is promised to be made good is the INDEMNIFIED or PROMISEE. Sec 124 has restricted the scope of indemnity only to cases where loss is caused by a human agency namely: (a) By the conduct of the promisor. (b) By the conduct of a third party.

CONTRACT OF GUARANTEE : 

COMPILED BY,VIVEK. DEP OF MBA SITS. KMM CONTRACT OF GUARANTEE Acc to sec126, “a contract of guarantee is to perform the promise or to discharge liability of a third person in case of his default”. The person giving the guarantee is the surety. The person on whose behalf the guarantee is given called the principal debtor. The person to whom the guarantee is given is called the creditor.

Requisites of a valid guarantee : 

COMPILED BY,VIVEK. DEP OF MBA SITS. KMM Requisites of a valid guarantee Principal debt. Consideration. Competent parties. No misrepresentation. Surety’s liability must be conditional. Concurrence of all the three parties. Writing not compulsory.

CONTRACT OF AGENCY : 

COMPILED BY,VIVEK. DEP OF MBA SITS. KMM CONTRACT OF AGENCY SEC 182 defines “a person employed to do any act for another or to represent another in dealing with third person”. The person for whom such act is done or who is represented is called PRINCIPAL. The relation between these two is termed as AGENCY.

Principles of Agency : 

COMPILED BY,VIVEK. DEP OF MBA SITS. KMM Principles of Agency Contracts of agency are based on two important principles: (a) whatever a person can do personally shall also be allowed to be done through an agent except in case of contracts involving personal services such as painting, marriage ,singing ,etc. (b) He who does an act through a duly authorized agent does it by himself, i.e., the acts of the agent are considered the acts of the principal

Essentials of a contract of Agency : 

COMPILED BY,VIVEK. DEP OF MBA SITS. KMM Essentials of a contract of Agency Existence of agreement. Competency of the principal. The agent need not be competent. No consideration is required to create agency.

THE SALE OF GOODS ACT, 1930 : 

COMPILED BY,VIVEK. DEP OF MBA SITS. KMM THE SALE OF GOODS ACT, 1930 GENERAL PRINCIPLES Meaning: Acc to sec4of the act ,a contract of sale means “a contract whereby the seller transfers or agrees to transfer the property in the goods to the buyer for a price”. Thus a contract may be: (a) a sale or (b) an agreement to sell. The term property has been used in sec 4 in the sense of ownership .

Essential elements of contract of sale : 

COMPILED BY,VIVEK. DEP OF MBA SITS. KMM Essential elements of contract of sale Two parties. Agreement. Goods. Transfer of property. Price. All the essential elements of a valid contract must also be present in a contract of sale.

CLASSIFICATION OF GOODS : 

COMPILED BY,VIVEK. DEP OF MBA SITS. KMM CLASSIFICATION OF GOODS EXISTING GOODS (a) Specific goods. (b) Ascertained goods. (c) Unascertained goods. FUTURE GOODS CONTINGENT GOODS

EFFECT OF PERISHING OF GOODS : 

COMPILED BY,VIVEK. DEP OF MBA SITS. KMM EFFECT OF PERISHING OF GOODS Goods perishing before making of contract(sec7). Goods perishing before sale but after agreement to sell(sec8). Perishing of future goods.

Performance of contract of sale : 

COMPILED BY,VIVEK. DEP OF MBA SITS. KMM Performance of contract of sale Performance means the delivery of goods by the seller ,and acceptance and payment for the goods by the buyer (sec31). Delivery means voluntary transfer of possession from one person to another sec2(2).

Modes of delivery : 

COMPILED BY,VIVEK. DEP OF MBA SITS. KMM Modes of delivery Actual delivery: In this the goods are physically handed over to the to the buyer by the seller or to the person authorized to hold them on his behalf. Symbolic delivery: It is the doing of some act which has the effect of putting the goods in possession of the buyer. Constructive delivery: It takes place when a person in possession of goods of the seller acknowledges to the buyer that he holds the goods on his behalf.

Rules regarding delivery(sec32-38) : 

COMPILED BY,VIVEK. DEP OF MBA SITS. KMM Rules regarding delivery(sec32-38) Delivery and payment are concurrent conditions [sec32]. Delivery should have the effect of putting the goods in possession of the buyer or his agent [sec33]. Effect of part delivery[sec34]. Buyer to apply for delivery[sec35]. Place of delivery[sec36(1)]. Time for delivery of goods[36(2)]. Goods in possession of a third party[sec36(3)]. Expenses of delivery[sec36(4)].

Slide 66: 

COMPILED BY,VIVEK. DEP OF MBA SITS. KMM Delivery of wrong quantity. a) short delivery b) excess delivery c) mixed delivery 10.Instalment delivery.

Acceptance of delivery by the buyer : 

COMPILED BY,VIVEK. DEP OF MBA SITS. KMM Acceptance of delivery by the buyer Buyer’s right to examine the goods. Acceptance of the goods by the buyer. a) he intimates the seller that he has accepted the goods b) he does any act to goods which is inconsistent with the ownership of the seller. c) he fails to return the goods to the seller after the expiry of reasonable time.

Slide 68: 

COMPILED BY,VIVEK. DEP OF MBA SITS. KMM Buyer not bound to return the goods. buyer’s liability for neglecting or refusing to take delivery of goods. a) any loss arising from the buyers negligence or refusal to take delivery of the goods ,and b) reasonable expenses for the care and custody of goods .where the negligence or refusal of the buyer amounts to denial of the contract ,the seller can claim damages for breach.

NEGOTIABLE INSTRUMENTS ACT-1881 : 

COMPILED BY,VIVEK. DEP OF MBA SITS. KMM NEGOTIABLE INSTRUMENTS ACT-1881 NEGOTIABLE INSTRUMENT. Acc to sec 13of the act a negotiable instrument means “a promissory note, bill of exchange or cheque payable either to order or bearer, whether the words order or bearer appear on the instrument or not.” Thus, the negotiable instruments act has mentioned only three types of instruments, 1.promissory note . 2.bill of exchange. 3.cheque.

ESSENTIAL CHARACTERISTICS OF A NEGOTIABLE INSTRUMENT : 

COMPILED BY,VIVEK. DEP OF MBA SITS. KMM ESSENTIAL CHARACTERISTICS OF A NEGOTIABLE INSTRUMENT Free transferability. Holder’s title free from defects. Recovery. Presumptions of sections 118&119. (a) date (b) time of acceptance (c) time of transfer (d) order of endorsements (e) stamp (f) holder in due course (g) Consideration (h) Proof of protest

PROMISORY NOTE : 

COMPILED BY,VIVEK. DEP OF MBA SITS. KMM PROMISORY NOTE Sec 4 defines a promissory note as an instrument in writing (not being a bank note or a currency note) containing an unconditional undertaking, signed by the maker, to pay a certain sum of money only to, or the order of, a certain person, or to the bearer of the instrument.

Characteristics of a promissory note: : 

COMPILED BY,VIVEK. DEP OF MBA SITS. KMM Characteristics of a promissory note: Instrument in writing. Promise to pay. The promise to pay must be unconditional. Signed by the maker. Certainty of the parties. Certain sum of money. The promise must relate to the payment of money only. Other formalities like stamp, date place, consideration. It may be payable on demand or after a definite period of time.

Slide 73: 

COMPILED BY,VIVEK. DEP OF MBA SITS. KMM

BILL OF EXCHANGE : 

COMPILED BY,VIVEK. DEP OF MBA SITS. KMM BILL OF EXCHANGE Sec 5 defines “a bill of exchange as, an instrument in writing containing an unconditional order, signed by the maker, directing a certain person to pay a certain sum of money only to, or to the order of a certain person or to the bearer of the instrument.”

Slide 75: 

COMPILED BY,VIVEK. DEP OF MBA SITS. KMM Rs50,000 Khammam 30TH March 2007 Pay to me or my order at sight the sum of Rs50,000 Arun To: Akhil

Essential elements of BILL OF EXCHANGE : 

COMPILED BY,VIVEK. DEP OF MBA SITS. KMM Essential elements of BILL OF EXCHANGE Date Time Amount Parties Stamp For value received (consideration) Acceptance

Characteristics of a bill of exchange : 

COMPILED BY,VIVEK. DEP OF MBA SITS. KMM Characteristics of a bill of exchange It must be written Must be signed Parties must be certain It must be stamped It must contain an order to pay. It must be accepted by the party.

Difference between bill of exchange and promissory note… : 

COMPILED BY,VIVEK. DEP OF MBA SITS. KMM Difference between bill of exchange and promissory note… Promissory note is a promise by one of the party that it would make the payment, but bill of exchange is an order to other party to make the payment. There are only 2 parties here : 1. maker 2. payee. ( in a bill of exchange. There are 3 parties : 1. payee, drawer, drawee).

CHEQUE : 

COMPILED BY,VIVEK. DEP OF MBA SITS. KMM CHEQUE Sec 6 of negotiable instruments act defines a cheque is a bill of exchange drawn on a specified banker and not expressed to be payable otherwise than on demand and it includes the electronic image of a truncated cheque and a cheque in the electronic form

CHARACTERSTICS OF A CHEQUE : 

COMPILED BY,VIVEK. DEP OF MBA SITS. KMM CHARACTERSTICS OF A CHEQUE It is always drawn on a specified banker. It is always payable on demand. It doesn't require any acceptance. No grace days are allowed. It may be crossed sometimes.

ENDORSEMENT : 

COMPILED BY,VIVEK. DEP OF MBA SITS. KMM ENDORSEMENT When the maker or holder of a negotiable instrument signs the same, otherwise than such a maker ,for the purpose of negotiation ,on the back or face thereof or on a slip of paper annexed to it ,or signs for the same purpose a stamped paper intended to be completed as a negotiable instrument, he is said to endorse the same.

Types of endorsements : 

COMPILED BY,VIVEK. DEP OF MBA SITS. KMM Types of endorsements Blank or general. Full or special. Restrictive. Partial. Conditional or qualified. Sans recourse. Sans frais . Faculative.

HOLDER : 

COMPILED BY,VIVEK. DEP OF MBA SITS. KMM HOLDER The holder of a negotiable instrument means any person entitled to the possession of the instrument in his own name and to receive or recover the amount due on it from the parties to it. HOLDER IN DUE COURSE Holder in due course is a person who for some consideration became the possessor of a bill of exchange or a promissory note if payable to the bearer or payee, or endorsee, before the amount mentioned in it became payable ,and without having sufficient cause to believe that any defect existed in the title of the person from whom he derived his title.

DISCHARGE OF PARTIES : 

COMPILED BY,VIVEK. DEP OF MBA SITS. KMM DISCHARGE OF PARTIES By payment in due course. By cancellation of the instrument. By release of the of a party to the instrument. By allowing drawee more than 48 hours to accept. By non presentment of a cheque with in a reasonable time of its issue. In case of a qualified acceptance, the parties not consenting to are discharged. By operation of law: (a) by an order of insolvency of court . (b) by lapse of time. (c) by merger of amount of instrument in to the judgment debt.

COMPANIES ACT,1956 : 

COMPILED BY,VIVEK. DEP OF MBA SITS. KMM COMPANIES ACT,1956 Company: Acc to sec 3(1)1 of the companies act a company means a group formed and registered under this act or an existing company as defined in sec(1)2 as an existing company means a company formed and registered under any of the previous companies law.

KINDS OF COMPANIES : 

COMPILED BY,VIVEK. DEP OF MBA SITS. KMM KINDS OF COMPANIES ON THE BASIS OF MODE OF INCORPORATION. CHARTERED COMPANIES: like east India company. STATUORY COMPANIES: these are created by a special act like LIC ,RBI, SBI. REGISTERED COMPANIES: are companies registered under the act.

Slide 87: 

COMPILED BY,VIVEK. DEP OF MBA SITS. KMM ON THE BASIS OF LIABILITY OF MEMBERS: LIMITED BY SHARES: where the liability of the members is limited to the amount unpaid on the shares. LIMITED BY GUARANTEE: where the liability of the members of a company is limited to a fixed amount which the members undertake to contribute to the assets of the company in the event of its being wound up . UNLIMITED: every member is liable for the debts of the company ,as in an ordinary partnership ,in proportion to his interest in the company.

Slide 88: 

COMPILED BY,VIVEK. DEP OF MBA SITS. KMM ON THE BASIS OF NUMBER OF MEMBERS: PRIVATE: where the minimum number of members is two and maximum is fifty. PUBLIC: where the min number is seven and max is limited by number of shares. OTHER TYPES OF COMPANIES: GOVERNMENT COMPANIES: the companies in which not less than 51%of the paid up share capital is held by the state govt and partly by one or more state govts. FOREIGN COMPANY: means a company incorporated outside India but having branches in India.

Slide 89: 

COMPILED BY,VIVEK. DEP OF MBA SITS. KMM PRODUCER COMPANIES: The companies (amendment) act 2002 ,has introduced a new type of company known as producer companies. any ten individual producers or any two or more producer institutions may form and incorporate a company as a producer company .

Formation and Incorporation of a Company : 

COMPILED BY,VIVEK. DEP OF MBA SITS. KMM Formation and Incorporation of a Company Promotion Registration/Incorporation Flotation/Raising of capital Commencement of Business

Promotion : 

Promotion This is the first stage in the formation of a company. It refers to the entire process by which a company is brought into existence. It starts with the conceptualization of the birth of a company and determination of the purpose for which it is to be formed.

Do you know what we mean by promoters? : 

Do you know what we mean by promoters? The persons who visualize the company and invest the initial funds are known as the promoters of the company. The promoters enter into preliminary contracts with vendors and make arrangements for the preparation, advertisement and the circulation of prospectus and placement of capital. However, a person who merely acts in his professional capacity on behalf of the promoter (e.g. lawyer, CA, etc) for drawing up the agreement or other documents or prepares the figures on behalf of the promoter and whom the promoter pays is not a promoter.

The promoters have certain basic duties towards the companyformed :- : 

The promoters have certain basic duties towards the companyformed :- He must not make any secret profit out of the promotion of the company. Secret profit is made by entering into transaction on his own behalf and then sell to concerned property to the company at a profit without making disclosure of the profit to the company or its members. The promoter can make profits in his dealings with the company provided he discloses these profits to the company and its members. What is not permitted is making secret profits i.e. making profits without disclosing them to the company and its members.

Memorandum of AssociationIt is the charter of a company which defines the limitation of the powers of a company. it contains the fundamental condition on which the company is incorporated : 

COMPILED BY,VIVEK. DEP OF MBA SITS. KMM Memorandum of AssociationIt is the charter of a company which defines the limitation of the powers of a company. it contains the fundamental condition on which the company is incorporated Contents Name of the Company Registered Office Objects of the company Liability Capital Association or Subscription

Alteration of memorandum : 

COMPILED BY,VIVEK. DEP OF MBA SITS. KMM Alteration of memorandum Alterations can only be made in the manner and to the extent provided in the act. some of the alterations that can be made are as follows: Alteration of name : For the change of name special resolution by a company and written approval of the central government is required. When the name is identical or closely resembles the name of an existing company then change of name can be done by passing an ordinary resolution and the written approval of the central government. Change of registered office: From one premises to another in the same city ,town ,or village by passing a resolution of the board of the directors From one town or city or village to another town or village in the same state by passing a special resolution .conformation of the regional director is required if the jurisdiction of the of the company is changed. A copy of the special resolution and the confirmation of the regional director, if required, is to be filed with registrar who is also given notice of new location within 30days From one state to other special resolution and confirmation of the central government is required

Slide 96: 

Alteration of objects : Special resolution is passed is passed by a company and the same is filed with the registrar within 30 days Alteration is required on any of these grounds To carry on its business more economically and more efficiently. To attain its main purpose by new or improved means To enlarge or change the local areas of its operations Alteration of liability: The liability of a member of company can not be increased unless the member agrees in writing. From unlimited liability, it can not be made limited by re-registration of the company COMPILED BY,VIVEK. DEP OF MBA SITS. KMM

Slide 97: 

COMPILED BY,VIVEK. DEP OF MBA SITS. KMM Alteration of capital: if the articles authorized a company limited by share capital may be ordinary resolution alter the capital so as to To increase the authorized share capital To convert shares in to stock and vice versa To cancel shares not taken up

Articles of Association : 

COMPILED BY,VIVEK. DEP OF MBA SITS. KMM Articles of Association Contents of Articles Different classes of shares and there rights Procedure of making an issue of share capital and allotment of shares Procedure of issuing of share certificates and share warrants Forfeiture of share and the procedure of there reissue Procedure for transfer and transmission of shares Directors there appointment remuneration qualification etc... Accounts and audit Alteration of share capital and buy back of shares Borrowing powers of directors General meetings alternatives and polls Voting rights of members Dividend and reserves Winding up

Company Management and Administration : 

COMPILED BY,VIVEK. DEP OF MBA SITS. KMM Company Management and Administration Director- according to the act director means any person who runs the organization, through whom a company acts does it’s business. They are the brains of the company. Board of directors or the board in relation in company means the board of directors of a company. Min and Max Number of directors - Min 2 in a private company. - Min 3 in a public company. - The max number may be as mentioned in the articles of the company.

Slide 100: 

A company in the eyes of the law is an artificial person. It has no physical existence. As such it cannot act by itself and acts instead through human agency. The persons through whom it acts and by whom the business of the company is conducted are known as directors. The directors of a company are collectively known as the “ board of directors” or the “board” what do we mean by director? Section 2(13) defines a director as any person occupying the position of a director, by whatever name he is called. It is the directors who exercise the powers of a company on the behalf of the company. Only individuals can be appointed as the directors of the company. No body corporate, association or firm shall be appointed as director of a company. The directors are the brain of a company. They occupy a crucial position in the structure of the company. They are in fact the main mechanism of the company “ the Board of directors are the brain and the only brain of the company which is the body, and the company can and does act only through them.” It is only “ when the brain functions that the corporation is said to function.”

Appointment of Directors : 

COMPILED BY,VIVEK. DEP OF MBA SITS. KMM First director. The articles of a company usually name the first directors by their respective names or prescribe the method of appointing them. In case the promoters of a company do not appoint the first directors, subscribers of the memorandum who are individuals, shall be deemed to be the directors of the company, until the directors are duly appointed. If the first directors are not appointed in the above manner, the subscribers of the memorandum who are individuals become directors of the company. They shall hold office until directors are duly appointed in the first annual general meeting. Appointment of Directors

Slide 102: 

b) Appointment of directors by company: (Secs 255 to 257, 263 and 264). Shareholders in general meeting must appoint directors. In the case of a public company or a private company, which is a subsidiary of a public company, at least 2/3rds of the total number of directors shall be liable to retire by rotation. Such directors are called rotational directors and shall be appointed by the shareholders in general meeting.

Slide 103: 

c) Appointment of directors by the board: The directors of a company may appoint directors As Additional Directors (Sec. 260) Any additional directors appointed by the directors shall hold office only up to the date of the next annual general meeting of the company. The number of directors and additional directors must not exceed the maximum strength fixed for the Board by the Articles If the annual general meeting of a company is not held or cannot be held, the additional director shall vacate his office on the day on which the annual general meeting should have been held.

Slide 104: 

Appointment of directors by proportional representation: normally directors are appointed by simple majority vote. As a result shareholders controlling 51% or more votes may elect all directors and the minority as high as 49%may find no representation on the board.acc to the act there is an option to the companies to appoint directors through a system of proportionate representation by any of the following methods Single transferable vote : a quota of votes is foxed . A person gets elected if he gets the required number of votes fixed as quota. Cumulative voting: the total no of votes would be equal to the no of shares multiplied by the number of directors to be elected .if there are 1000 shares and five directors to be elected the total votes would be 5000.

Slide 105: 

Appointment of directors by central government : the central government can appoint directors on an order passed by the tribunal{NCLT}

Slide 106: 

Appointment of directors by company. Appointment of directors by the board. Appointment of directors by third parties. Appointment of directors by proportional representation. Appointment of directors by central government. Appointment of directors by small share holders.

Powers &duties of directors : 

COMPILED BY,VIVEK. DEP OF MBA SITS. KMM Powers &duties of directors Powers to be exercised by resolutions passed by the board’s meetings 1) the power to make calls: A call may be defined as "A demand made by the company on its share holders to pay whole or part of the balance remaining unpaid on each share at any time during the lifetime of a company". 2) to issue debentures. 3) to borrow money other than on debentures. 4) to invest funds. 5) to make loans. 6) to fill casual vacancy in board. 7) to make political contributions. 8) recommend rate of dividend at the annual general meetings.

Slide 108: 

COMPILED BY,VIVEK. DEP OF MBA SITS. KMM Powers to be exercised by company in general meetings: 1)sale lease or disposal of the undertaking. 2)showing any concession regarding payment of debts. 3)make investment of the amount of compensation received. 4)contribution of charitable and other funds.

Slide 109: 

COMPILED BY,VIVEK. DEP OF MBA SITS. KMM Duties of directors 1) duty of good faith. 2) duty to take reasonable care. 3)duty to disclose interest. 4)duty to participate in committees of the board like audit committee or investors grievance committee.

Company meetings and resolutions : 

COMPILED BY,VIVEK. DEP OF MBA SITS. KMM Company meetings and resolutions A company being an artificial legal person can only act through some human intermediary. the various necessities of the act and rules empower members to do certain things all decisions of the company are taken in meetings .

KINDS OF MEETINGS : 

COMPILED BY,VIVEK. DEP OF MBA SITS. KMM KINDS OF MEETINGS Statutory meetings Annual general meetings {AGM} Extraordinary general meetings {EGM} Board meetings RESOLUTIONS Any motion voted upon and agreed to in a meeting and entered in minutes, a motion when passed,with or without amendment is called resolution. Types of resolutions: 1. ordinary resolution 2. special resolution 3. resolutions requiring special resolution

Statutory meetings : 

Statutory meetings The main purpose of these meetings is to enable the members to know the financial position and prospectus of the company and also to discuss on various matters relating to formation of the company It is to be held with in a period of not less than one month but not more than six months from the date the company is entitled to commence business finally a report is presented in the meeting containing details about total shares allotted, total amount of cash received, details of directors COMPILED BY,VIVEK. DEP OF MBA SITS. KMM

Annual general meetings {AGM} : 

Annual general meetings {AGM} Every company has to hold this meeting every calendar year [ Annually ] First AGM may be heldwithin18 months from the date of incorporation, there must be one meeting held in each calendar year and the gap between two AGMs must not be more than 15 months Topics like consideration of annual accounts, declaration of dividend, appointment of directors and auditors etc may be transacted. COMPILED BY,VIVEK. DEP OF MBA SITS. KMM

Extraordinary general meetings {EGM} : 

Extraordinary general meetings {EGM} It is conducted when some urgent or special business that may arise between two AGMs. e.g. removal of directors or auditors The meeting may be called by The board on its own, On the requisition of the holders with voting power. If the board does not call for the meeting within 45 days of the deposit of a valid requisition the requisitionists themselves COMPILED BY,VIVEK. DEP OF MBA SITS. KMM

Board meetings : 

Board meetings It is to be held in every three calendar months and 4 meetings every year A notice is to be given to every director in writing. The notice must state the date , time and place of the meeting All the aspects related to business are to be discussed COMPILED BY,VIVEK. DEP OF MBA SITS. KMM

RESOLUTIONS : 

RESOLUTIONS MOTION: It is a proposal under consideration by members in a meeting before it is voted upon Rules Should be positive in terms and should always be in writing Within power, scope and relevance of business Comply with the provisions of the act memorandum & articles Duly proposed by any member in a meeting COMPILED BY,VIVEK. DEP OF MBA SITS. KMM

RESOLUTIONS : 

RESOLUTIONS Any motion voted upon and agreed to in a meeting and entered in minutes, a motion when passed, with or without amendment is called resolution. Types of resolutions: 1. ordinary resolution: A motion passed by simple majority of the members voting at a general meeting 2. special resolution: This is a resolution taken up to make any alterations in memorandum or articles, here the votes supporting should always be three times more than that of the votes against it 3. resolutions requiring special resolution: this is applied when the company goes to appoint an auditor, removing a director before expiry of period of his office .notice of the intention of moving such resolution should be given to the company not less than 14 days before the meeting at which it is to be moved COMPILED BY,VIVEK. DEP OF MBA SITS. KMM

Slide 118: 

Winding up of a company represents the steps for the last stage in its life. It is the process through which a company is dissolved It may also be the process by which its life is ended and its property administered for the benefits of its creditors and members. An administrator, called liquidator is appointed and he takes control of the company, collects its assets, its debts and finally distributes any surplus among the members in accordance with their rights. Winding up of a company differs from insolvency of an individual in as much as a company cannot be made insolvent under the insolvency law .even a solvent company can be wound-up

Slide 119: 

COMPILED BY,VIVEK. DEP OF MBA SITS. KMM Modes of winding up Compulsory winding up by Court [Sec.433] Voluntary winding up Members voluntary winding up Creditors voluntary winding up Voluntary winding up under supervision of the court.

Slide 120: 

COMPILED BY,VIVEK. DEP OF MBA SITS. KMM Default in holding statutory meeting. Failure to commence business. Reduction in membership. Inability to pay debts.

Slide 121: 

COMPILED BY,VIVEK. DEP OF MBA SITS. KMM Ordinary resolution passed where the period fixed by the Articles for the duration. If the company resolves by special resolution that it shall be wound-up voluntarily [sec.484]

Slide 122: 

COMPILED BY,VIVEK. DEP OF MBA SITS. KMM Members Solvent companies No need of creditors meeting Liquidator appointed by the member No committee of inspection can be formed. Creditors Insolvent Companies Creditors meeting necessary Liquidator appointed by the creditor If wish they can form a Committee of inspection.

UNIT-V : 

UNIT-V COMPILED BY,VIVEK. DEP OF MBA SITS. KMM

Definition of tax : 

COMPILED BY,VIVEK. DEP OF MBA SITS. KMM Definition of tax A charge imposed by government on the annual gains of a person, corporation, or other taxable unit derived through work, business pursuits, investments, property dealings, and other sources determined in accordance with the state law A tax levied on the annual earnings of an individual is called personal income tax. Personal Income taxes are levied by the central government. Income Tax Act, 1961 imposes tax on income other than agricultural income. Tax on agricultural income can be imposed only by State Governments

Classification of income : 

COMPILED BY,VIVEK. DEP OF MBA SITS. KMM Classification of income Salary / remuneration Income from house property Income from business/profession Gifts / charity Capital gains

Tax is classified in to two categories : 

COMPILED BY,VIVEK. DEP OF MBA SITS. KMM Tax is classified in to two categories DIRECT TAX: These are the taxes paid after the benefit reaches the hands of a person .{these taxes are paid from income, benefits and wealth} INDIRECT TAX: These are the taxes paid when a person or consumer purchases something .{these taxes are paid on the goods or services consumed}

Assessee : 

COMPILED BY,VIVEK. DEP OF MBA SITS. KMM Assessee “ Assessee” means a “person” by whom Income tax or any other sum of money is payable under the act. It includes every person in respect of whom any proceeding under the act has been taken for the assessment of his income or loss and the amount of refund due to him. It also includes a person who is assessable in respect of the income or loss of another or who is deemed to be an assessee or an assessee in default under the provisions of the act.

WHO IS A PERSON? : 

COMPILED BY,VIVEK. DEP OF MBA SITS. KMM WHO IS A PERSON? Person‘ includes * Individual * HUF * Company * Partnership Firm * Association of Persons (AOP) or body of individuals whether incorporated or not * Local Authority like Municipality etc. * Artificial Judicial person [section 2(31) of Income Tax Act]

Assessment year : 

COMPILED BY,VIVEK. DEP OF MBA SITS. KMM Assessment year Assessment Year – ( Sec 2(9) Assessment year may be defined as a year in which the income of the previous year is to be assessed. In some countries it is called “ tax year” It always starts on April 1 and ends on March 31 of the next year Income of the previous year is taxed in the immediately following assessment year. In some countries it is called “ Income Year” From the assessment year 1989-90 onwards all assesses are required to follow the financial year.

Previous year : 

Previous year It is the financial year immediately preceding the assessment year. income tax is payable on the income earned in the previous year and it is assessed in the immediate succeeding financial year which is called an assessment year. COMPILED BY,VIVEK. DEP OF MBA SITS. KMM

Deduction of tax at source : 

Deduction of tax at source In order to minimize the cases of tax avoidance the income tax act has made provision to collect tax at source on growth of income. In such cases, persons responsible for making payment of income are responsible to deduct tax at source and deposit the same amount to the governments treasury in the fixed time. COMPILED BY,VIVEK. DEP OF MBA SITS. KMM

Advance payment of tax : 

Advance payment of tax It is another method of collecting tax by the central government in the form of prepaid taxes such advance tax is in addition to deduction of tax at source or collection of source. This scheme is also known as “pay as you earn”. Under this scheme an assessee is required to pay tax in a particular financial year on the basis of his estimated Income. E.g.: though the income earned during previous year 2007-08 is taxable in the assessment year 2008-09, tax on such income is payable during the financial year 2007-08 under the scheme of advance payment of tax. COMPILED BY,VIVEK. DEP OF MBA SITS. KMM

Assessment procedure : 

Assessment procedure Every person liable to tax has to file his income tax return. The income tax authorities make an assessment of the tax liability on the basis of his tax return and other information which they may have gathered from other sources. Submission of income Time for financial payment of income: the due dates for filing returns of income are given below: If the assessee is a company - due date is October 31st In all other cases – due date is July 31st Belated return: if the return is not furnished by the time allowed as above , the person may, furnish the return of any previous year at any time before the end of one year from the end of relevant assessment year. COMPILED BY,VIVEK. DEP OF MBA SITS. KMM

Slide 134: 

Defective return : where the assessing officer considers that the return of income furnished by the assessee is defective , he may intimate the defect to him and give him an opportunity to rectify the defect with in a period of 15 days from the date of such intimation .such time may be extended by the assessing officer on an application made by the assessee Self – assessment :every person before submitting a return, is under an obligation to make a self-assessment of his income and after taking in to account the amount of tax, if any, already paid, pay the self-assessment tax, if due. The assessee shall be liable to pay such tax together with interest payable for any delay in furnishing the return or any default or delay in payment of advance tax. COMPILED BY,VIVEK. DEP OF MBA SITS. KMM

GROSS TOTAL INCOME : 

COMPILED BY,VIVEK. DEP OF MBA SITS. KMM GROSS TOTAL INCOME Gross total income is commonly defined as the amount of company’s or person’s income before all deductions or any tax payers income, except which is specifically excluded by the internal revenue code ,before taking deduction taxes in to account. The GTI is computed by aggregating incomes the following five head Income from salary Income from house property Profits and gains of business or profession Capital gains Income from other sources

DELIVERY OF GOODS MISSING POINTS : 

COMPILED BY,VIVEK. DEP OF MBA SITS. KMM DELIVERY OF GOODS MISSING POINTS 11.Delivery of carrier or wharfinger. a) to make a suitable contract with the carrier or wharfinger b) to inform the buyer in time to enable him to insure his goods 12.Deteriaration of goods during transit.

Slide 137: 

COMPILED BY,VIVEK. DEP OF MBA SITS. KMM Thank you

Procedure for advance payment of tax : 

COMPILED BY,VIVEK. DEP OF MBA SITS. KMM Procedure for advance payment of tax It is another method of collection of tax by the central government in the form of prepaid tax . Its also known as “PAY AS YOU EARN”. Advance tax liability under different situations 1)payment of advance tax by the assessee of his own account (sec 210) 2)payment of advance tax in pursuance of assessing officer (210) a) order by the assessing officer. b) lower estimate by assessee. c) higher estimate by the assessee.

Computation by an assessee : 

COMPILED BY,VIVEK. DEP OF MBA SITS. KMM Computation by an assessee 3)payment of advance tax in pursuance of revised order of assessing officer. a) lower estimate by the assessee. b) higher estimate by the assessee. Computation of advance tax (sec 209) computation by an assessee . Computation by assessing officer .