Sec 44AA & 44AB of Income Tax Act, 1961
Sec 44AA:- Maintenance Of Accounts required by Certain Persons Carrying On Business Or Profession
Maintenance of books is required when two conditions are satisfied:-
- Claim lower profit than limit specified u/s 44AD
- Total Income exceed basic exemption limit
Prescribed Books means:- Cash Book, Journal, Ledger etc. In case of Medical Profession, Daily Case registers in Form No. 3C and Stock Register are also to be maintained.
Books of accounts are required to be maintained for 6 Years from the end of relevant Assessment Year.
Sec 44AB:- Audit Of Accounts under Income tax
- Audit of accounts is compulsory;
- In case of Business: - If Total Sales/ Gross Turnover exceeds Rs 1 Crore in any previous Year.
- In case of Profession: - If Gross Receipts exceeds Rs 50 Lakh in any previous Year.
- Assessees covered u/s 44AD/44AE/44BB/44BBB also required to accounts audited if they claim that their profit is less than limit specified in respective section. e.g. u/s 44 AD
- .
- TAX Audit Report clauses
-
- Clause 17 Consideration for transfer
What is the objective of tax audit?
One of the objectives of tax audit is to ascertain/derive/report the
requirements of Form Nos. 3CA/3CB and 3CD. Apart from reporting requirements of
Form Nos. 3CA/3CB and 3CD, a proper audit for tax purposes would ensure that
the books of account and other records are properly maintained, that they
faithfully reflect the income of the taxpayer and claims for deduction are
correctly made by him. Such audit would also help in checking fraudulent
practices. It can also facilitate the administration of tax laws by a proper
presentation of accounts before the tax authorities and considerably save the
time of Assessing Officers in carrying out routine verifications, like checking
correctness of totals and verifying whether purchases and sales are properly
vouched for or not. The time of the Assessing Officers saved could be utilised
for attending to more important and investigational aspects of a case.
As per section 44AB, who is compulsorily required to get his accounts
audited, i.e., who is covered by tax audit?
As per section 44AB, following persons are compulsorily required to get
their accounts audited :
· A person carrying on
business, if his total sales, turnover or gross receipts (as the case may be)
in business for the year exceed or exceeds Rs. 1 crore.
· A person carrying on
profession, if his gross receipts in profession for the year exceed Rs.
50 lakhs.
· A person who is
eligible to opt for the presumptive taxation scheme of section 44AD (*) but
claims the profits or gains for such business to be lower than the profits and
gains computed as per the presumptive taxation scheme of section 44AD and his
income exceeds the amount which is not chargeable to tax.
· If an eligible
assessee opts out of the presumptive taxation scheme, after specified period,
he cannot choose to revert back to the presumptive taxation scheme for a period
of five assessment years thereafter.
· A person who is
eligible to opt for the presumptive taxation scheme of section 44ADA (*) but he
claims the profits or gains for such profession to be lower than the profit and
gains computed as per the presumptive taxation scheme and his income exceeds
the amount which is not chargeable to tax.
· A person who is
eligible to opt for the presumptive taxation scheme of sections 44AE (*) but he
claims the profits or gains for such business to be lower than the profits and
gains computed as per the presumptive taxation scheme of sections 44AE.
· A person who is
eligible to opt for the taxation scheme prescribed under section 44BB (*) or
section 44BBB (*) but he claims the profits or gains for such business to be
lower than the profits and gains computed as per the taxation scheme of these
sections.
(*) section 44BB is applicable to non-resident taxpayers engaged in the
business of providing services or facilities in connection with, or supplying
plant and machinery on hire basis to be used in exploration of mineral oils.
section 44BBB is applicable to foreign companies engaged in the business of civil
construction or erection of plant or machinery or testing or commissioning
thereof, in connection with a turnkey power project.
If a person is required by or under any other law to get his accounts
audited, then is it compulsory for him to once again get his accounts audited
to comply with the requirement of section 44AB?
Persons like company or co-operative society are required to get their
accounts audited under their respective law. Section 44AB provides that, if a
person is required by or under any other law to get his accounts audited, then
he need not again get his accounts audited to comply with the requirement of
section 44AB. Is such a case, it shall be sufficient if such person gets the
accounts of such business or profession audited under such law and obtains the
report of the audit as required under such other law and also a report by the
chartered accountant in the form prescribed under section 44AB, i.e., Form No.
3CA and Form 3CD.
What are Form Nos. 3CA/3CB and 3CD?
The report of the tax audit conducted by the chartered accountant is to
be furnished in the prescribed form. The form prescribed for audit report in
respect of audit conducted under section 44AB is Form No. 3CB and the
prescribed particulars are to be reported in Form No. 3CD.
In case of persons covered under previous FAQ, i.e., who
are required to get their accounts audited by or under any other law, the form
prescribed for audit report is Form No. 3CA and the prescribed particulars are
to be reported in Form No. 3CD.
What is the due date by which a taxpayer should get his accounts
audited?
Finance Act, 2020 has amended the provisions of section 44AB to provide for the due date filing of the tax audit report one month prior to the due date of filing of return of income u/s 139(1) applicable for tax audit cases.
As per the amended provision, the tax audit report is required to be furnished by 30th September 2020 for the AY 2020-21. Finance Act, 2020 has extended the due date for filing of the income tax return from 30th September to 31st October. Since the due date for filing of return of income of an assessee who is subject to compulsory tax audit u/s 44AB for the assessment year 2020-21 is 31st October 2020, thus tax audit report shall be required to be furnished by 30-09-2020. The objective of such an amendment is for pre-filling the income tax returns from the tax audit report. Earlier till AY 2019-20, the tax audit report was required to be filed along with the return of income.
What is the penalty for not getting the accounts audited as required by
section 44AB?
According to section 271B, if any person who is required to comply with
section 44AB fails to get his accounts audited in respect of any year or years
as required under section 44AB, the Assessing Officer may impose a penalty. The
penalty shall be lower of the following amounts:
(a) 0.5% of the total sales, turnover or gross receipts, as the case may
be, in business, or of the gross receipts in profession, in such year or years.
(b) Rs. 1,50,000.
However, according to section 273B, no penalty shall be imposed if
reasonable cause for such failure is proved.
Negligence in
reporting 40A(3) & 40(a)(ia) violation is Professional Negligence – CA
awarded punishment of removal of his name from the Register of Members 19th October 2018
Negligence in reporting 40A(3) & 40(a)(ia) violation is
Professional Negligence – CA awarded punishment of removal of his name from the
Register of Members Negligence in reporting 40A(3) & 40(a)(ia) violation is
Professional Negligence – CA awarded punishment of removal of his name from the
Register of Members Ignorance & caaualness may be a costly. There is not only
penalty u/s 271J but also chances of Discplinary action by ICAI.
Income Tax
Department is taking all such matters for disciplinary action with ICAI. One
such instance was found in CA Ishaq Esmail Lakkadghat Versus Income Tax
Officer, 11 (3) -1 Mumbai case wherein the Tax auditor was held guilty by the
disciplinary committee of ICAI of lack of exercising due diligence, or gross
negligence in the conduct of his professional duties.
1.The Reporting Auditor (CA) stated NIL in the column
“amount admissible u/s 40A (3) read with rule 6DD and computation thereof”
2. The error was detected in scrutiny assessment for AY
2007-08, when it was found that the assessee has made payment of consultancy
charges amounting to Rs. 5, 45,715/- to various Doctor which exceeds Rs. 20,
000/-. The assessee has made this payment in cash which is exceeding Rs. 20,
000/- and no tax has been deducted which is required u/s 194J of the Income Tax
Act, 1961. These facts have not been mentioned in the Tax Audit Report
certified by the CA
3. The matter was reported to the Disciplinary Committee of
the ICAI which that on perusal of Profit & Loss Account of the Hospital vis-à-vis
working papers of the Respondent, it has been noted that consultancy charges
were shown as expenses in the Profit & Loss Account of the Hospital.
4. The CA submitted
a. “……since the
Doctors did not provide any professional service to the Hospital, the
provisions of Section 194J would not be attracted.
b. As per the judgment passed by the Special Bench in case
of “Merilyn Shipping and Transports-vs ACIT, Section 40 (a) (ia) is applicable
only to the amounts of expenditure which are payable as on 31st March of every
year and it cannot be invoked to disallow the amounts which have been actually
paid during the previous year, without deduction of tax at source. Further, all
payments were made to the respective doctors before 31st March, 2007. As per his
belief, the payment made to the Doctors by way of reimbursement of the fees
does not fall under the TDS Act and even if it falls, these payments would not
be disallowable u/s 194J of the Income Tax Act.
5. However the Committee was of the view that it is for the
assessee to reply on any judgment for making deduction of TDS on payment of
consultancy fees u/s 194J. As per provision of the Income Tax Act, 1961 and
Guidance notes on Tax Audit issued by the Institute, the Auditor is required to
report as to whether any amount is inadmissible under Section 40 (a) the Income
Tax Act, 1961. If the Assessee did not deduct TDS based on a judgment given in
a particular case, the Respondent being a Statutory Tax Auditor was required to
disclose the same in his report so as to enable the Income Tax Department to
know the reason as to why TDS was not deducted by the Assessee u/s 194J of the
Income Tax, 1961.
6. On appeal against the order of the disciplinary committee
of ICAI, the Appellate Authority – ICAI the CA further added that as he
has passed Chartered Accountancy only in 2005, he was very new in the
profession and it is possible that he did not understand the proper
interpretation of Section 194J of the Income Tax Act 1961. Therefore he prayed
that his mistake may be condoned and lenient view may be taken.
7. The Appellate Authority – ICAI held as under: a. It is very clear that the CA was required to report instances where tax was deductible by the auditee but not deducted by him. The CBDT vide Notification No. 208/2006 dated 10th August, 2006 had widened reporting requirements of Form 3CD and thus it was the duty of the CA to report such transactions in the Form 3CD, which he failed to do. b. The CA being new in the profession and not being able to understand properly the ambit of section 194J of the Income Tax Act, can’t be a ground to completely ignore the new reporting requirements imposed by the CBDT from 10th August, 2006. (Ignorance of Law in No EXCUSE- supplied) c. Held that CA did not exercise due diligence in carrying out his professional duties, which is expected from him. d. As regards to the issue of quantum of punishment, the CA prayed for taking lenient view and explained that he was very new in the profession and he might not have been fully aware of the recent amendments in the law, and he also pleaded that the default was for a very small quantum. e. Looking to all the facts involved and the fact that the Appellant fully co-operated in all proceedings at every level of enquiry, we feel that the “ends of justice” would meet, if the Appellant is awarded punishment to “Reprimand”. We, accordingly modify the Impugned Order of the Disciplinary Committee to this extent. Though, *further, we direct the Appellant to be more cautious in future while dealing with such situation
7. The Appellate Authority – ICAI held as under: a. It is very clear that the CA was required to report instances where tax was deductible by the auditee but not deducted by him. The CBDT vide Notification No. 208/2006 dated 10th August, 2006 had widened reporting requirements of Form 3CD and thus it was the duty of the CA to report such transactions in the Form 3CD, which he failed to do. b. The CA being new in the profession and not being able to understand properly the ambit of section 194J of the Income Tax Act, can’t be a ground to completely ignore the new reporting requirements imposed by the CBDT from 10th August, 2006. (Ignorance of Law in No EXCUSE- supplied) c. Held that CA did not exercise due diligence in carrying out his professional duties, which is expected from him. d. As regards to the issue of quantum of punishment, the CA prayed for taking lenient view and explained that he was very new in the profession and he might not have been fully aware of the recent amendments in the law, and he also pleaded that the default was for a very small quantum. e. Looking to all the facts involved and the fact that the Appellant fully co-operated in all proceedings at every level of enquiry, we feel that the “ends of justice” would meet, if the Appellant is awarded punishment to “Reprimand”. We, accordingly modify the Impugned Order of the Disciplinary Committee to this extent. Though, *further, we direct the Appellant to be more cautious in future while dealing with such situation
Share trading turnover - Tax Audit impact
Sep 08, 2016
DETERMINATION
OF TURNOVER IN CASE OF TRADING OF SHARES EITHER ON SPECULATION OR NON
SPECULATION BASIS
1.
Preamble:
1.1 The
broad legal positions are as follows- Dealing in shares whether Investment or
Business
Dealing in
shares can result either in "Business income" (chargeable as Profits
& Gains of Business or Profession chargeable under section 28 of the Income
Tax Act, 1961) or "Capital Gains" (chargeable under Sec.45 of the
Act). Thus, dealings in shares could either be in the course of business -
chargeable as Business Income, OR for the purpose of investment - chargeable as
Capital Gains. Classification into Business Income and Capital Gains depends on
facts & circumstances of each case. However, as a very broad guideline, as
held in many cases, it can be said that - ordinarily, the purchase and sale of
shares with the motive of earning a profit, would result in transaction being
in the nature of trade, but where the object of investment in shares of a
company is to derive income by way of dividend etc., then the profit accruing
by sale of shares will yield capital gains and not revenue gains (business
income).
2. This
article deals with the situation where trading in shares have been considered
as business income
3.
Explaining Speculation and Non Speculation Business:
Trading in
shares can be of two types namely
A) Delivery based trading
B) Non delivery based (also called
intraday trading)
3.1. DELIVERY BASED TRADING:
Under this
type of trading, the share transaction is said to be complete only when there is actual delivery of shares/securities upon the settlement
of transaction i.e. in other words, when shares are
purchased/ sold on delivery basis, then those shares will be transferred
to/from Demat account of the buyers/sellers. The buyer of the share will have
to pay the full value of share and the share will become his asset with that
either he can trade in his business or hold for investment.
3.2. NON DELIVERY BASED TRADING (or
intraday trading):
Intraday
trading by the name itself one can get a view that it refers to the trading
system where the traders have to square-off their
trade on the same day. Squaring off the trade means that
the traders have to do the buy and sell or sell and buy transaction on the same
day before the market close. In other words in this trading, shares are not
actually transferred to the DEMAT account of the buyer instead they have
to square off their position before the
market close on same day by selling the same number of shares. The buyer of the shares will not pay the full value of shares instead
he will pay only the difference margin arising on account of such buy/sell
transaction.
3.3 Speculative Business Income:
3.3.1. Income
from intra-day trading is considered as speculation income and taxed as such.
3.3.2. As
per Section 43(5) of the Income Tax Act, 1961, intra-day trading shall be
considered as speculation business transactions and the income therefrom would
be either speculation gains or speculation losses. Income from speculation
gains is taxed at the normal rates.
3.3.3. Intra-day
trading is the trading of shares within the same day. Generally, delivery is
not taken in case of intra-day trading, and thus, these are said to be
speculative transactions. As per Section 43(5) of the Income Tax Act, 1961, the
said transactions shall be considered as speculation business transactions and
the income therefrom would be either speculation gains or speculation losses.
3.3.4. For
a person earning income from any head of income, intra-day trading in shares is
always treated as speculative business. Section 43(5) of the Income Tax Act,
1961, deals with speculative transaction. It states that a transaction of
purchase or sale of a commodity including stocks and shares settled otherwise
than by actual delivery or transfer of the commodity or scrip is a speculative
transaction.
3.3.5. In intra-day trading in
shares, there is no actual delivery as the shares enter and exit from the
trading account on the same date and it does not enter the DEMAT account at
all.
3.4 Non Speculative Business Income:
3.4.1. Income
from trading F&O (both intraday and overnight) on all the exchanges is considered as non-speculative business income as it has been
specifically defined this way. F&O is also considered as non-speculative as
these instruments are used for hedging and also for taking/giving delivery of
underlying contract. Even though currently almost all equity, currency, &
commodity contracts in India are cash settled, but by definition they give rise
to giving/taking delivery (there are a few commodity future contracts like gold
and almost all agri-commodity contracts with delivery option to it).Income from
shorter term equity delivery based trades (held for between 1 day to 1 year)
are also best to be considered as non-speculative business income if frequency
of such trades executed by you is high or if investing/trading in the markets
is your main source of income.
3.4.2. Profit
/ Loss in derivatives (futures and options) is treated as non-speculation
business even though delivery is not effected in such transactions.
3.4.3. From
the reading of the above it is clear that trading in derivatives including
commodity derivatives on a recognized stock exchange will not be considered as
a speculative transaction and hence not treated as speculative business. Therefore
since these are not considered as speculative business, therefore income from
such transactions will be considered as normal business income and loss from
such transactions will be considered as normal business loss.
4. How is turnover computed.?
DETERMINATION OF TURNOVER:
DETERMINATION
OF TURNOVER IN RESPECT OF SPECULATIVE TRANSACTION
Now, your
attention may be directed to the Para 5 of “Guidance Note on Tax Audit under
Section 44AB of the Income Tax Act,1961" issued by The Institute of
Chartered Accountants of India (ICAI), which provides the guidelines regarding
"Turnover or Gross Receipts in respect of transactions in shares.."
as follows:
a) In a
speculative transaction, the contract for sale or purchase which is entered
into is not completed by giving or receiving delivery so as to result in the
sale as per value of contract note.
b) The
contract is settled otherwise and squared up by paying out the difference which may be positive or negative. As such, in such transaction the difference amount is 'turnover'.
c) In the
case of an assessee undertaking speculative transactions there can be both
positive and negative differences arising by settlement of various such
contracts during the year. Each transaction resulting into whether a positive
or negative difference is an independent transaction.
d)
Further, amount paid on account of negative difference paid is not related to
the amount received on account of positive difference. In such transactions
though the contract notes are issued for full value of the purchased or sold
asset the entries in the books of account are made only for the differences.
e)
Accordingly, the aggregate of both positive and negative differences is to be
considered as the turnover of such transactions for determining the liability
to audit vides section 44AB, whether the differences are positive or negative.
DETERMINATION
OF TURNOVER IN RESPECT OF NON SPECULATIVE TRANSACTION
Determination
of turnover in case of F&O is one of the important factors for every
individual for the income tax purpose. Turnover must be firstly calculated, in
the manner explained below:
1. The total of positive and negative
or favorable and unfavorable differences shall be taken as turnover.
2. Premium received on sale of
options is to be included in turnover.
3. In respect of any reverse trades
entered, the difference thereon shall also form part of the turnover.
Here, it
makes no difference, whether the difference is positive or negative. All the
differences, whether positive or negative are aggregated and the turnover is
calculated.
DETERMINATION
OF TURNOVER IN RESPECT OF DELIVERY BASED TRANSACTION:
Where the
transaction for the purchase or sale of any commodity including stocks and
shares is delivery based whether intended or by default, the total value of the
sales is to be considered as turnover.
5. When is
audit required?
An audit
is required if you have a business income and if your business turnover is more
than Rs 2 crores (was Rs 1 crore until FY 16/17) for the given financial
year. Audit is also required as per section 44AD in cases where turnover is
less than Rs.2 Crores but profits are lesser than 8% of the turnover and total
income is above minimum exemption limit.
Therefore,
the applicability of tax audit will be as follows in case of F&O Trading:
5.1 In case of Profit from
transactions of F&O trading
a) In the case of profit from
derivative transactions, tax audit will be applicable if the turnover from such
trading exceeds Rs. 1 crore.
b) Tax audit u/s 44AB r/w section
44AD will also be applicable, if the net profit from such transactions is less
than 8% of the turnover from such transactions.
5.2 In
case of Loss from F&O Trading
In case of
Loss from derivative trading, since profit (Loss in this case) is less than 8%
of the turnover, therefore Tax Audit will be applicable u/s 44AB read with
section 44AD.
6. Tax
Treatment:
Business
income: If you are trading in the stock
market frequently (mostly non-delivery trade), returns from it can be
classified as follows:
6.1. Speculative
Business income: Profit
from intraday trading is categorized under speculative business income.
Tax treatment is similar to your Business income tax. It is taxed as per the
tax slab you fall in while losses can be offset only against speculative
gains.
6.2.
Non-speculative Business income: Income
from trading futures & options on recognized exchanges (equity, commodity,
& currency) is categorized under non-speculative business income. Tax on
share trading in such cases is similar to your business income tax. The profits
on F/O trading are taxed as per the tax slab you fall in whereas losses on such
F/O trading can be set off against business profit.
7. Treatment of Adjustment for loss
7.1 Loss
in respect of non speculative business income:
As per the
Section 71 of the Income Tax Act, loss in respect of such business can be set
off against any other heads of income including income from speculative
business but excluding income under the head “salaries” of that year.
As per
Section 72 of the Income Tax Act, if there is any such loss which is not set
off against the above said incomes, such losses are eligible to be carried
forward and set off against the other incomes excluding income from salary for
a period of 8 subsequent assessment years in the manner as specified in the above order of set off.
7.2 Loss
in respect of speculative business income:
As per the
Section 73 of the Income Tax Act, loss in respect of speculative business
cannot be set off against any other heads of income i.e. it can be set off only against other speculative incomes if any in that year.
If there
is any such loss which is not set off, such losses are eligible to be carried
forward and set off only against speculative
incomes for a period of only 4 subsequent assessment years.
Form 3CEB
Under
transfer pricing regulations, companies in India are expected to file Form 3CEB
if the entity has entered into any international transaction with an associated
enterprise or some specified domestic transaction (the latter with effect from
assessment year 2013-14).
This is
filed alongside Form 3CD under Section 92A to 92F of the Income Tax Act, 1961.
Form 3CD is a detailed statement of particulars related to various aspects of
the business and transactions undertaken.
What is Form 3CEB and when does it apply?
Form 3CEB
is applied if companies engaged in international and specified domestic
transactions with any associated enterprise. All companies that conducted such
transactions must provide a detailed report from a chartered accountant.
Form 3CEB
follows two conditions as set forth by transfer pricing regulations:
- A
transaction between any two or multiple associated businesses, either or
both being foreign businesses, is an international transaction; and
- Specified
domestic transactions are those connected to transfer pricing but do not
include international transactions. (Transfer pricing is the price one
company levies on another company for the goods and services it has
rendered.)
What do we mean by specified
domestic transactions?
According
to the Income Tax Act specified domestic transactions must satisfy certain
parameters. The transaction(s) should fall under Section 92BA of the Act, which
describes them as:
1)
Transactions listed under Section 80A, which correlate with the market price of
goods and services.
2)
Transactions of goods and services listed under sub-section 8 of Section 80IA.
3) Business
transactions listed under sub-section 10 of Section 80IA.
4)
Transactions listed in any other section on which the provisions of
sub-sections 8 and 10 of Section 80IA are also applied. There are five such
provisions that are as follows:
- 80IAB
– The profits of a business will be subtracted if it is a part of a
developing Special Economic Zone.
- 80IB –
The profits of specific industrial ventures will be subtracted as compared
to specific development of infrastructure ventures.
- 80IC –
There will be special provisions for specific businesses that fall under
special category states.
- 80ID –
The profits of a business will be subtracted if it is a hotel business and
if it is a convention center located in a specific area.
- 80IE –
There will be special provisions for those specific businesses that lie
within northeastern states.
5) The
transaction is not international.
6) The
transaction will fall under domestic pricing only if its aggregate value is
more than the threshold limit of INR 200 million (US$2.7 million) (from
assessment year 2016-17).
What qualifies as an
international transaction?
According
to the Income Tax Act, international transactions must meet the following
conditions:
- The
transaction occurs between two or more associated enterprises, either or
both of which are foreign entities;
- The
transaction includes sale or lease of physical/tangible property and
services provided, or lending or borrowing money or any other transaction
that has impacts profits, income, losses, and/or assets of such
enterprises; and
- There
is a mutual arrangement or agreement reached between two or more
associated enterprises for the purpose of allocating or apportioning or
making any contribution to any cost incurred or to be incurred – in
connection with a benefit, service, or facility provided or to be provided
to any one or more of such enterprises.
Accordingly,
companies will need to submit Form 3CEB if they have entered into an
international transaction or specified domestic transaction.
What are the reporting
requirements in Form 3CEB?
- Taxpayers
must provide general personal information as well as the aggregate value
of the international transactions that have been undertaken;
- Taxpayers
must provide information about the international transactions that were
undertaken during the financial year calculated as April 1 to March 3; and
- Taxpayers
must provide information about the specified domestic transactions that
were undertaken during the financial year.
What is the penalty for
incompliance?
Penalties
are triggered if the company fails to file Form 3CEB in the expected format.
These are:
- Fine
of minimum INR 100,000 (approx. US$1,352) if the report is not presented
as the required Form 3CEB;
- Fine
of two percent of the value of the transaction if the given information on
them is inadequate; and
- Fine
of two percent of the value of the transaction if the given information on
them is incorrect.
Other Certifications by CA under Income tax
FMV of Unqouted shared
The Indian Government has in 2017 notified final rules to compute fair market value of unquoted shares which are to be used in determining quantum of:
1. Capital gains on transfer of shares in a company; and
2. Income in the hands of a recipient of shares if consideration paid by him is lower than its fair market value
The final rules specify, among others, that fair market value of securities and shares (other than unquoted equity shares) owned by a company would be the value as certified by a merchant banker or a chartered accountant on the valuation date.