CA Online

The Securities and Exchange Board of India ( Sebi) has restrained 22 entities, mostly brokers, from the securities market for allegedly making illicit gain through manipulation of liquid stocks options. Sebi found these entities putting through ‘ reversal trades’ in the stock options segment. The manipulation typically took in deep in- themoney and out- of- the- money options on individual stocks that were thinly traded. In fact, 70- 100 per cent of the volumes in these counters were by the alleged manipulators, it said. According to Sebi, entities through reversal trades generated atotal loss of Rs.1,273 crore and total profit of Rs.1,303 crore. “ These brokers have, prima facie, facilitated their clients to use and employ a pre- meditated manipulative device or contrivance while dealing in the market, a... nongenuine and deceptive transaction,” said Rajeev Kumar Agarwal, member of Sebi, in an order. Some of the entities barred are Giriraj Stock Broking, Best Bull Stock Tradin...

FinMin officials say an announcement could be made in the Budget The Centre is likely to set up a “ bad bank” to take over the non- performing assets (NPAs) of the country’s financial institutions, and is examining a policy proposal paper on the matter. As such, the setting up of an asset reconstruction company backed by the sovereign is a long- drawn process and these are still early days. Even then, senior government sources say Finance Minister Arun Jaitley might make an announcement in the upcoming Union Budget as part of his medium- term plans for the financial sector. There have been inter- ministerial discussions on the matter. Earlier in February, Reserve Bank of India ( RBI) Governor Rajan had said there was “ no need” to set up a separate “ bad bank” to deal with stressed assets of public sector ( PSU) banks. “ PSU banks themselves have the backing of the government, so there is no need to create a new entity that has the backing of the government. The issue is now to...

Various instances of client code changes by stock brokers between 2009 and 2011 has caught the attention of the income-tax department. A few brokers in Mumbai, Delhi, Gujarat and Rajasthan have got notices from the I-T department in January and February seeking details of changes to client codes in their system in the past few years mainly for assessment year 2010-2011. Changing client codes within 30 minutes after the market closed to rectify any punching errors was a common practice in markets. However, the I-T department feels the practice was turning into a scheme to avoid paying taxes as client code modifications constituted a staggering Rs.56,000 crore worth of trade ev` ery month. Tax officials believe that gains and losses were transferred from one account to another un der the guise of rectifying errors. The I-T department is seeking details like the transaction ID original client code, modified client code, name of the origi nal client, PAN of the original client, nam...

Updates Of the Day 1.The petitioner is admittedly not a foreign company : Since the petitioner is not an eligible assessee in terms of section 144C(15)(b), no draft order can be passed in the case of the petitioner u/s 144C(1) - HC. [Honda Cars India Limited (Formerly – M/s. Honda Siel Cars India Limited vs Deputy Commissioner of Income Tax & Another - 2016 (2) TMI 527 - Delhi High Court]. 2.Manufacture of rosin and turpentine without aid of power , seeking retrospective exemption is not a constitutional right - HC. [Mangalam Organics Limited vs Union of India - 2016 (2) TMI 529 - Delhi High Court]. 3.Supply Of Goods to Indian Navy not must to claim excise exemption. [CCEx vs. M/s Wartsila (I) Pvt. Ltd]. 4.Proceedings under rule declared unconstitutional by HC in invalid. [Vipul-S Plasticrafts P. Ltd. vs. Commissioner of Central Excise]. 5.Cenvat of Goods/ Service used in construction of rented property allowed. [Nirlon Ltd. vs. Commissioner of Central Excise,Mumbai]. 6.Bro...