Question 1

Ajay is a practising Chartered Accountant.Vijay is a practising Advocate representing matters in courts of law.  Ajay and Vijay agree to help each other in matters involving their professional expertise.  Accordingly Ajay recommends Vijay in all tax litigations in courts of law.  Vijay consults Ajay on all matters relating to finance and related matters, which come to him for arguing in various courts of law. Ajay seeks your advise on how he and Vijay should (i) remunerate each other (ii) ‘share’ the remuneration.(Final Nov 2000)

Hint:  CLAUSE 2 & 3 read with amendments 

Answer:

A chartered accountant in practice shall be deemed to be guilty of professional misconduct if he either directly or indirectly shares commission or brokerage in the fees or profits of his professional business to any other than member of the Institute or accepts any part of the profits of the professional work of a lawyer, broker, etc. who is not a member of the Institute.  Thus, as per Clauses 2 and 3 of Part I of the First Schedule to the Chartered Accountants Act, 1949 a member in practice can neither share fees or profits with a person who is not a member of the Institute nor he is permitted to receive and share the fees of other such as lawyers, engineers, etc. Ajay and Vijay therefore cannot "share" any remuneration.  They may, however, remunerate each other for "professional" services rendered on any reasonable basis separately which would be on time basis at rates depending on the extent of expertise.  It is, however, important that care should be taken by the member not to extend his service beyond the normal sphere of professional practice and any reports or recommendations should clearly delimit the responsibilities assumed and services rendered

Hi Akash..sorry for the delay in reply..

Answer as per my opininon to the above question is

Part I: first schedule

 Clause 2 says 

A CA can share commission or profits of his professional business with a member of any other professional bodies... which includes Bar council of India for a practicising Advocate

Clause 3 says

A CA cannot accept any part of profits of professional work of a person other than member of Institute(ICAI)

Exception: Specified professonal bodies in clause 2; i.e. bar council of india here

PS: Also clause 4 states that A can enter into partnership with members of other professional bodies(here Advocate- for the purpsose of sharing part of profits)

So, a practicing CA can receive/pay a share in profits OR  remmunerate each other as part of their professional work

Please corect me if i am wrong..

nice thread though