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Income tax assessment of a company which takes overasick unit with liabilities was examined by the Supreme Court in its recent judgment in the case, Mc dowell Co vs CIT. The sick company, Hindustan Polymers Ltd (HPL), was amalgamated with Mcdowell. HPL owed alot of money to banks and financial institutions.However, they waived interest on them.The interest was shown as expenditure by HPL. Mcdowell claimed benefit on that account, invoking Section 72A of the Income Tax Act. According to that provision, the company which takes over the sick company is allowed to set off losses of the amalgamated company as its own losses, subject to certain conditions.The assessing officer treated the income at the hands of the company and adjusted it from the accumulated losses.Mcdowell challenged it before the tribunal which ruled in its favour, stating income was that of HPL, which was a different entity.But the Karnataka High Court held that the tribunal was wrong in treating the waiver of intere

The government will soon make quoting of Aadhaar number compulsory for key managerial personnel and directors in regulatory filings under the Companies Act.The move, primarily aimed at tackling the issue of bogus identities, comes atatime when the authorities are bolstering measures to deal with the menace of shell companies, suspected to be used for laundering illicit funds.Moving towards implementation of the Aadhaar card requirement under the companies law, the corporate affairs ministry has already asked individual stakeholders to obtain Aadhaar at the earliest for “integrating their details with MCA21”.MCA21 is the portal through which filings required under the Companies Act are submitted to the ministry.A source said the ministry has started work for implementing a framework to make quoting of Aadhaar compulsory in the filings made under the companies law. “We will roll it out pretty fast. It will be done in a phased manner,” the source added. Business Standard New Delhi, 01

Jaitley hints at minimal disruption, says gains from lower rates should be passed on to consumers. Finance minister Arun Jaitley said rates under the new goods and services tax (GST) regime will not be “significantly different“ from existing levels, suggesting there will be minimal disruption when it is rolled out on July 1. But any savings should be passed on to consumers, he said. “We are now in the final stages of fixing tariffs for different commodities. The formula under which it is being done has also been explained and therefore nobody is going to be taken by surprise,“ he said. “It's not going to be very significantly different,“ he said, adding that rules and regulations governing GST have been framed. GST is one of India's most significant economic reforms in decades and will erase barriers bet ween states to create a common market that will lower costs and increase efficiencies, thus potentially boosting growth by 4.2%, according to a US Federal Reserve p

Sharply critical of the existing corporate gover nance practices, Sebi chief Ajay Tyagi on Friday said “indepen dent directors are not indepen dent“ and audit committees are not working but admitted he does not have a solution to fix the lacunae. Pitching for a “common stewardship code“ for institutional investors, he said the worrying part is that there is no such code for these entities once they become significant shareholders in companies. Tyagi, who took over the reins as markets regulator last month, said there are too many lacunae with respect to the concept of independent directors with many having “no commitment to any cause“. “I must admit I have no solutions on what should be done but it will be anyone's case that existing system has lot of lacunae,“ he said here. Mincing no words, Tyagi said, some independent directors are appointed at the mercy of promoters “(with) no prescribed qualifications or procedures, favouritism, (many are from) closed clubs (such a

The RBI has said banks cannot refuse to accept faded notes or those with scribbles. The central bank said such banknotes had to be treated as “soiled notes“ and dealt with according to the RBI's “clean note policy“. The circular to banks was sent by the RBI after it received complaints that many branches were not accepting banknotes, specifically of 500 and 2,000 denominations, with anything written on them or those either smudged with colour or faded due to washing. Bank branches have been rejecting such notes following rumours in social media that such notes were not acceptable. The RBI drew attention to its December 2013 statement, issued in response to rumours that from 2017 onwards banks would not accept notes with anything written on them. The RBI had then stated that it had not issued any such instruction. The central bank clarified that its instructions on scribbling on notes was a directive for staffers not to write on banknotes. This was after the RBI had observ

Chief economic adviser Arvind Subramanian on Friday further stoked the controversy over imposing tax on farm income and said that 29 states have option to levy tax on agriculture income and a clear distinction has to be made between rich and poor farmer. “Nothing prevents state governments from taxing agriculture income. The constitutional restriction is on central government taxing agriculture income.There too, one could make a case that this is a choice open to 29 state governments and if there are willing takers,“ he said adding there is a need to make a clear distinction between poor and rich farmer. “Why is it that it is very difficult to make a distinction between a poor farmer and a rich farmer....When you say farmer, people think that you are going after the poor farmer. So what is it about political discourse that does not allow these distinctions to be made. Why can't we say, rich regardless of where they get their income, should be taxed,“ said Subramanian. Ear

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