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The Special Investigation Team (SIT) on black money on Tuesday informed the Supreme Court that it has recently filed its fourth probe report in a sealed cover with the apex court registry. A bench comprising Chief Justice HL Dattu and justice Arun Mishra considered the statement of senior advocate Dushyant Dave, appearing for the SIT, on this issue and said that it will hear the matter in January. The court, on September 3, had told the SIT to submit its fresh report on the progress of its probe and had also asked the Centre to apprise it about the steps taken to implement SIT’s recommendations to bring back illegal money stashed in foreign banks. Earlier, noted jurist Ram Jethmalani on whose petition the SIT was constituted, had accused the National Democratic Alliance (NDA) government and the previous United Progressive Alliance (UPA) dispensation of failure to bring back black money kept abroad. He had also attacked the SIT, saying it is “loaded with people who are loyal to ...

Amco Power allowed to accrue tax losses; move to benefit cos making acquisitions & restructuring In what could benefit companies making acquisitions and internal restructuring, a recent Supreme Court judgement has given clarity on whether tax losses could be allowed in the event of a change of shareholding beyond 51%. A problem that many Indian companies faced was the uncertainty on whether the buyer in a transaction -acquisition or restructuring of a group company -can add tax losses. The income tax depart ment's view was that tax losses caused by the seller cannot be added as cost to the transaction. This was struck down by the SC. In a case involving Amco Power Systems, the SC has allowed the company to accrue tax losses. Industry trackers said the whole debate was around Section 79 of the Income Tax Act, where the dispute was whether tax losses could be carried forward. “This decision will...

Panel to give suggestions by Jan 31 to help incorporate those in Budget FY17 The finance ministry on Tuesday set up a 10member committee to review the Income- Tax Act to avoid litigation and improve ease of doing business, after solving past minimum alternate tax ( MAT) cases and easing transfer pricing norms. The announcement came on a day when a World Bank report showed only marginal improvement in India’s ranking in terms of ease of doing business. The panel has been asked to submit a preliminary report by January 31, so that some of its recommendations could be incorporated in Budget 2016- 17. “We have constituted a committee to simplify the provisions of the I- T Act... This committee will be conducting a study from time to time. As and when it keeps giving a bundle of suggestions with regard to simplification, we will examine those… for those found acceptable, we will try and simplify the provisions of the I- T Act,” Finance Minister Arun Jaitley told reporters here. Th...

Updates Of the Day 1.SEBI has commenced regulating the commodity derivatives market with effect from 28 September 2015 and the forward contracts regulation Act got repealed w.e.f. 29 September, 2015. 2.CBEC revises limit for arrest and prosecution in cases of outright smuggling or mis-declaration of baggage from Rs.5 lakh to Rs. 20 lakh 3.The definition of 'charitable activity' contained in mega exemption has been amended by Notification No. 20/2015-ST dated 21-10-2015 to include 'yoga' in the said definition. 4.Service tax return filing last date will be 26 october, 2015, being 25th day of the month happens to be a public holiday. 5.Last date for filing of Form DP-1 of DVAT further extended to November 23, 2015. 6.DVAT return online as well as hard copy can be filed upto 28th after end of the quarter 7.Scanned image of documents shall be of original signed documents relevant to the e-forms. Rule 8(6) of the Companies (registration offices and fees), rules, 2014...

The nettlesome problem of provident fund for casual construction workers returned to the Delhi High Court with the Builders Association of India and several construction firms alleging that they should not be compelled to pay their contribution because the workers change places and could not be traced. The court had in the past asked the government to put in place a workable scheme to benefit the labourers who change employers and work place very often. Since this has not been done satisfactorily, the employers should not be compelled to contribute to the fund, they argued. The high court dismissed their petitions stating that the problem of logistics in finding the workers and paying them is different from the liability of the employers. The argument that unless the provident fund authorities and the government could show that they had a “ mechanism as per which the workmen whose job was portable could avail the benefit of the money lying to their credit all over India, no liability...

When a company acquires the plant of another, intellectual property such as brand name, copyright and know- how are of capital nature and it can claim deduction or depreciation in income tax, the Supreme Court has ruled. In this case, Mangalore Ganesh Beedi Works vs CIT, the partnership was dissolved and a new company consisting of association of persons was formed to continue the business. The new entity claimed depreciation under of the Income Tax Act towards acquisition of IPR. In the alternative, it claimed depreciation on capitalising the value of IPR by treating them as ‘plant’. The tax authorities rejected the claim. After appeals in forums below and the Karnataka high court, the question was raised by the firm in the Supreme Court: Would intellectual property come within the definition of ‘ plant’? The court answered yes, “ for the reason that there can be no doubt that for the purposes of a large business, control over IPR is absolutely necessary.” Further, the judgment expl...

State finance ministers are scheduled to meet on November 20 to discuss the model goods and services tax (GST) law as well as the integrated-GST or iGST legislation. The Centre had earlier this month circulated among states the draft of CGST, SGST and iGST for their comments. “The meeting of states to discuss the laws is scheduled to happen on November 20," an official told PTI. The Central GST (CGST) will be framed based on the model GST law. Also, the states will draft their own State GST (SGST) based on the draft model law with minor variation incorporating state-based exemption. Besides, iGST law would deal with inter-state movement of goods and services. After the draft laws are deliberated upon by states, it would be put up in the public domain seeking comments of trade and industry. “The model legislations have been drafted after consultations between representatives of both the Centre and states. Now, the state finance ministers have to formally approve it," ano...

As a debate continues about IPO-bound airline IndiGo doling out hefty dividend payouts to promoters, market regulator, the Securities and Exchange Board of India, plans to make it mandatory for all listed companies to have ‘dividend policy. The move is aimed at helping investors identify stocks with greater return potential, but the proposed policy would not mean forcing the companies to pay the dividend, a senior official said. Rather, it would require listed companies as well as those looking to get listed through the initial public offering (IPO) route to spell out the circumstances under which their shareholders can or cannot expect a payout, he added. InterGlobe Aviation, which runs low-cost air carrier IndiGo, has faced criticism in recent days upon disclosure in its IPO papers about a dividend payout to promoters, leading to a negative networth for the company. A final decision may, however, take some time as Sebi is looking to first issue a consultation paper and the ...

New norms may make it easier for fund managers to shift base to India without getting taxed The government is set to ease a few pre-set conditions for offshore fund managers to allow private equity investors to shift base to India without attracting a tax on capital gains by relaxing safe harbour rules, people familiar with the matter said. The government is likely to allow a `see through' so that the 10% limit on individual investors does not apply to special purpose vehicles and relax the arm'slength condition that allows only third party fund managers to rekindle investor interest in the scheme as it has failed attract a single fund manager even eight months after announcing what is known as safe harbour rules, people in the know said. After finance minister Arun Jaitley had announced the outlines of safe harbour norms during his budget speech in February, the government had come out with some 15 conditions that the fund managers had to meet if they wished to shift t...

BATTLE RAGES Custodian, bank account and broker contracts mean FPIs have a `place of business' here, says tax dept The last mile journey in the dispute over the minimum alternate tax (MAT) could turn out to be a tortuous court feud for many foreign portfolio investors if the government does not step in to keep the taxman at bay and end the controversy once and for all.Even as late as last week, arguing before the Bombay HC the counsel for the I-T department said that FPIs' bank accounts in India, relationship with the custodian that holds the securities on their behalf, and contracts with brokers would be considered to establish that an FPI has a “place of business“ in the country. The case pertains to the ongoing litigation that followed writ petitions filed by FPIs earlier this year in the Bombay High Court.The government has told the Supreme Court, which was hearing an appeal against a 2012 ruling of the Authority for Adanced Rulings (AAR), that it has accepted the recom...

NHB nod for such a move will hit borrowers looking to gain from falling rates The National Housing Bank is considering allowing lenders to levy prepayment penalty on housing loan customers who transfer the outstanding amount to another lender in the first two years of the loan tenure, a dampener for borrowers wanting to make the most of falling interest rates. Sriram Kalyanaraman, chairman of National Housing Bank, the regulator for housing finance companies (HFCs), believes that home loan `shopping' could lead to risks building up in the system as banks and HFCs are vying for the same customers to expand their market share. “I think there should be some form of lock-in for the customers in the initial days, say 18 to 24 months, before they are allowed to transfer loans,“ said Kalyanaraman. “CompaniesHFCsbanks are trying to woo customers with lower interest rates, which is good for customers, but there could be a bubble due to everyone concentrating on the same segment and ...