CCI approves share acquisition in Suzlon; Affirmative rights covenants an investor protection tool
CCI approves acquisition of 16.49 % shares of Suzlon Energy Ltd ('Suzlon'), engaged in business of designing, developing, manufacturing and supply of wind turbine generators, on fully diluted basis by way of equity shares subscription, by a bunch of NBFCs and investors ('Acquirers'); Observes that Acquirers have affirmative rights on certain matters pertaining to Suzlon, however, such rights are in the form of investor protection rights only; Also notes that pursuant to the proposed combination, there would be no change in control of Suzlon irrespective of shareholding of Acquirers in Suzlon post combination; With regard to horizontal overlap, notes that that both Suzlon and certain entities controlled by some of the Acquirers are engaged in wind power generation, however observes that, "while wind power generated by Suzlon is used for captive consumption and for supply to state electricity boards, on the other hand, the affiliates of Acquirers generate wind power for captive consumption purposes only"; Thus, holds that combination is not likely to raise any competition concern in India:CCI
CCI approves acquisition of Odhisha based ferro-alloys producer's unit by Balasore Alloys
CCI approves proposed acquisition of Rohit Ferro Tech Limited's ('RFTL') ferrochrome producing facility at Jajpur, Odisha ('Facility') on a slump-sale basis by Balasore Alloys Limited ('Acquirer'), engaged in the manufacture of ferrochrome; Notes that RFTL provides a whole range of ferro alloys, while Acquirer is engaged in the production of ferrochrome only; Observes that producers of other ferro alloys could also manufacture ferrochrome as similar type of plants and equipment may produce different types of ferro alloys, thus, states that there is no vertical relationship between the parties; Further observes that post the proposed combination, presence of other major producers of ferrochrome & other ferro alloys in India such as Tata Steel, Jindal Steel, Visa Steel etc would not allow Acquirer to raise any competition concerns; Thus, holds that the proposed combination would not result in any appreciable adverse effect on competition in India:CCI
CCI nods to acquisition of Alkem Laboratories' fertility drug division by Ordain Health Care
CCI approves proposed combination relating to acquisition of Alkem Laboratories Limited's fertility drugs division (i.e., 'Fertica Business') by Ordain Health Care Global Private Limited ("Acquirer"); Notes that Fertica Business comprises of manufacturing, marketing and distribution of certain hormonal and nutritional pharmaceutical products for treating male and female infertility; Further notes that Acquirer is a subsidiary of a Spain-based integrated healthcare multinational group, and is engaged in pharmaceutical business in India and Alkem is engaged in manufacturing of generic and specialty pharmaceutical products; States that at the molecule level, i.e., medicines/formulations, as well as at therapeutic group level, there is no overlap between any of the products of Chemo Group sold in India and the products of Fertica Business being acquired by Acquirer; Also observes that combined market share of these products in market is less than three per cent, thus "the proposed combination is not likely to cause any appreciable adverse effect on competition in any of the potential relevant markets and therefore, the exact delineation of the relevant market may be left open in this case":CCI
No similarity in reliefs sought from HC & Consumer Forum; Admits MRTP application
COMPAT dismisses application seeking dismissal of complaint filed u/s 36-A (deals with Unfair Trade Practices) of Monopolies and Restrictive Trade Practices Act, 1969 ('Act') on the ground that similar issues had already been decided by Consumer Forums, Punjab & Haryana High Court ('HC') and Supreme Court ('SC'); Notes that in the instant complaint alleging unfair trade practice, complainant sought direction against respondent to deliver them the residential plots, however in proceedings before Consumer Forums (filed by four prospective allottees of plots) damages for not developing the land were sought; Further notes that petitions filed before Consumer Forums were dismissed on the ground of being 'highly belated' and writ petition before Single Judge of HC (filed by builder-association) was rejected on the ground of having no locus standi, SLP against which was summarily dismissed by SC; Observes that there was no similarity in the relief prayed for in proceedings instituted before Consumer Forums & HC and in the instant complaint; Holds that, "Therefore, the order passed by that High Court cannot be treated as binding on the complainants and they cannot be non-suited on the ground that similar issue has already been decided by the High Court and the Supreme Court"; Also observes that summary dismissal of special leave petition by SC cannot be treated as a declaration of law which would be binding on other courts and judicial/quasi judicial forums:COMPAT
INCOME TAX REPORTS (ITR)
Recovery of dues --Arrest and detention--Conditions precedent--Procedure--Failure by officer of company to pay penalty--Arrest without recording satisfaction that defaulter obstructing execution of certificate or despite having means dishonestly refusing to pay--Order passed and arrest made without giving defaulter opportunity to submit proposal for repayment--Arrest and detention in violation of principles of natural justice--Securities and Exchange Board of India Act, 1992, s. 28A--Income-tax Act, 1961, s. 222 ; Sch. II, rr. 73, 74--Securities and Exchange Board of India (Prohibition of Fraudulent and Unfair Trade Practices Relating to Securities Markets) Regulations, 2003-- Vinod Hingorani v. Securities and Exchange Board of India (Bom) . . . 435
Recovery of tax --Garnishee proceedings--Condition precedent--Copy of notice issued to garnishee must be forwarded to assessee--Income-tax Act, 1961, s. 226-- Suntec Business Solutions P. Ltd. v. Union of India (Ker) . . . 452
Writ --Maintainability--Existence of alternative remedy--Allegation of infringement of fundamental rights--Court not precluded from examining legality and propriety of order notwithstanding availability of alternative remedy--Constitution of India, art. 226 -- Vinod Hingorani v. Securities and Exchange Board of India (Bom) . . . 435
Business income --Special allowances--Assessee engaged in production of mineral oils--Condition precedent for grant of allowances--Only if specified in contract entered into with Government--Not on general principles--Tenders invited with model production sharing contract providing for allowances under section 42--Contracts signed after Cabinet approval not providing for allowances--Assessee not entitled to allowances--Grant of allowances for some years or communications prior to signing of contracts not material--Contracts providing for amendment only in writing signed by both parties--Assessee not entitled to seek direction from court to read such provision into contract--Not entitled to claim legitimate expectation--Income-tax Act, 1961, s. 42-- Joshi Technologies International Inc. v. Union of India . . . 322
Income-tax authorities --Bound to apply provisions of Act-- Joshi Technologies International Inc. v. Union of India . . . 322
Writ --Scope of interference in contractual matters--Contracts where Government is party--Factors governing--Constitution of India, arts. 226, 299-- Joshi Technologies International Inc. v. Union of India . . . 322
Amortisation of preliminary expenses --Scope of section 35D--Depreciation--Issue of shares to facilitate expansion of business--Part of expenses capitalised--Section 35D would apply--Depreciation cannot be claimed on the expenses--Income-tax Act, 1961, ss. 32, 35D-- International Computers Indian Manufacture Ltd. v. CIT (Bom) . . . 243
Appeal to High Court --Limitation--Condonation of delay--Assessee deciding not to appeal though there were decisions of other High Courts which were favourable--Appeal after five years after favourable decision by jurisdictional High Court--Delay could not be condoned--Income-tax Act, 1961, s. 260A--Indian Limitation Act-- Somerset Place Co-operative Housing Society Ltd. , In re (Bom) . . . 307
Business expenditure --Premium on keyman insurance--Firm consisting of two partners--Keyman insurance taken by firm--Premium deductible--Income-tax Act, 1961, s. 37-- CIT v. Agarwal Enterprises (Bom) . . . 240
Charitable purposes --Charitable trust--Exemption--Effect of sections 11 and 12--Amounts exempt under section 10 to be taken into account for purposes of section 11--Income-tax Act, 1961, ss. 11, 12-- Director of Income-tax (Exemptions) v. Jasubhai Foundation (Bom) . . . 315
----Educational institution--Exemption--Scope of sections 11, 12 13--Charitable trust running educational institutions--No evidence of receipt of capitation fees--Cash found in possession of chairman of trust assessed in his hands--No evidence of utilisation of income for non-charitable purposes--Charitable trust entitled to exemption--Income-tax Act, 1961, ss. 10(23C), 11, 12, 13-- CIT v. Balaji Educational and Charitable Public Trust (Mad) . . . 274
Exploration, development and production of mineral oil and natural gas --Special deduction--Constitutional validity of provision--Amendment of section 80-IB by Finance (No. 2) Act, 2009--Insertion of Explanation to section 80-IB(9)-- Explanation defining “undertaking†to mean “all blocks licensed under single contractâ€--Amendment prospective in operation--Retrospective effect given to affected vested interests in property of persons--Violated article 14-- Explanation to section 80-IB(9) not valid--Income-tax Act, 1961, s. 80-IB-- Niko Resources Ltd. v. Union of India (Guj) . . . 369
Income-tax enquiry --Powers of income-tax authorities--Constitutional validity of provisions--Amendment to section 133(6) by Finance Act, 1995, giving power to income-tax authorities to call for information even where no proceedings were pending under Income-tax Act--Amendment valid--Income-tax Act, 1961, s. 133-- Pattambi Service Co-operative Bank Ltd. v. Union of India (Ker) . . . 254
Interpretation of taxing statutes --Rule against retrospectivity of provision-- Niko Resources Ltd. v. Union of India (Guj) . . . 369
Legislative powers --Constitutional validity of provisions--Greater latitude in tax matters--Constitution of India-- Pattambi Service Co-operative Bank Ltd. v. Union of India (Ker) . . . 254
Precedent --Effect of decisions of Supreme Court in Vivian Joseph Ferreira v. Municipal Corporation of Greater Bombay [1972] 1 SCC 70, R. K. Garg v. Union of India [1982] 133 ITR 239 (SC) and Gobind v. State of Madhya Pradesh [1975] AIR 1975 SC 1378-- Pattambi Service Co-operative Bank Ltd. v. Union of India (Ker) . . . 254
Recovery of tax --Settlement of cases--Interest for default in payment of tax--Application for settlement of case--Interest payable from date of default till date of admission of application for settlement of case--Income-tax Act, 1961, ss. 220, 245D-- CIT v. Smt. Leonie M. Almeida (Bom) . . . 304
Reference --Powers of High Court--Power to consider all aspects of question referred--Income-tax Act, 1961, s. 256-- International Computers Indian Manufacture Ltd. v. CIT (Bom) . . . 243
Valuation of stock --Recognised method followed for sixteen years and accepted by Revenue--Method could not be changed--Income-tax Act, 1961-- CIT v. Agarwal Enterprises (Bom) . . . 240
Art. 226 --Writ--Scope of interference in contractual matters--Contracts where Government is party--Factors governing-- Joshi Technologies International Inc. v. Union of India (SC). . . 322
Art. 299 --Writ--Scope of interference in contractual matters--Contracts where Government is party--Factors governing-- Joshi Technologies International Inc. v. Union of India (SC). . . 322
S. 10(23C) --Charitable purposes--Educational institution--Exemption--Scope of sections 11, 12 13--Charitable trust running educational institutions--No evidence of receipt of capitation fees--Cash found in possession of chairman of trust assessed in his hands--No evidence of utilisation of income for non-charitable purposes--Charitable trust entitled to exemption-- CIT v. Balaji Educational and Charitable Public Trust (Mad) . . . 274
S. 11 --Charitable purposes--Charitable trust--Exemption--Effect of sections 11 and 12--Amounts exempt under section 10 to be taken into account for purposes of section 11-- Director of Income-tax (Exemptions) v. Jasubhai Foundation (Bom) . . . 315
----Charitable purposes--Educational institution--Exemption--Scope of sections 11, 12 13--Charitable trust running educational institutions--No evidence of receipt of capitation fees--Cash found in possession of chairman of trust assessed in his hands--No evidence of utilisation of income for non-charitable purposes--Charitable trust entitled to exemption-- CIT v. Balaji Educational and Charitable Public Trust (Mad) . . . 274
S. 12 --Charitable purposes--Charitable trust--Exemption--Effect of sections 11 and 12--Amounts exempt under section 10 to be taken into account for purposes of section 11-- Director of Income-tax (Exemptions) v. Jasubhai Foundation (Bom) . . . 315
----Charitable purposes--Educational institution--Exemption--Scope of sections 11, 12 13--Charitable trust running educational institutions--No evidence of receipt of capitation fees--Cash found in possession of chairman of trust assessed in his hands--No evidence of utilisation of income for non-charitable purposes--Charitable trust entitled to exemption-- CIT v. Balaji Educational and Charitable Public Trust (Mad) . . . 274
S. 13 --Charitable purposes--Educational institution--Exemption--Scope of sections 11, 12 13--Charitable trust running educational institutions--No evidence of receipt of capitation fees--Cash found in possession of chairman of trust assessed in his hands--No evidence of utilisation of income for non-charitable purposes--Charitable trust entitled to exemption-- CIT v. Balaji Educational and Charitable Public Trust (Mad) . . . 274
S. 32 --Amortisation of preliminary expenses--Scope of section 35D--Depreciation--Issue of shares to facilitate expansion of business--Part of expenses capitalised--Section 35D would apply--Depreciation cannot be claimed on the expenses-- International Computers Indian Manufacture Ltd. v. CIT (Bom) . . . 243
S. 35D --Amortisation of preliminary expenses--Scope of section 35D--Depreciation--Issue of shares to facilitate expansion of business--Part of expenses capitalised--Section 35D would apply--Depreciation cannot be claimed on the expenses-- International Computers Indian Manufacture Ltd. v. CIT (Bom) . . . 243
S. 37 --Business expenditure--Premium on keyman insurance--Firm consisting of two partners--Keyman insurance taken by firm--Premium deductible-- CIT v. Agarwal Enterprises (Bom) . . . 240
S. 42 --Business income--Special allowances--Assessee engaged in production of mineral oils--Condition precedent for grant of allowances--Only if specified in contract entered into with Government--Not on general principles--Tenders invited with model production sharing contract providing for allowances under section 42--Contracts signed after Cabinet approval not providing for allowances--Assessee not entitled to allowances--Grant of allowances for some years or communications prior to signing of contracts not material--Contracts providing for amendment only in writing signed by both parties--Assessee not entitled to seek direction from court to read such provision into contract--Not entitled to claim legitimate expectation-- Joshi Technologies International Inc. v. Union of India (SC). . . 322
S. 80-IB --Exploration, development and production of mineral oil and natural gas--Special deduction--Constitutional validity of provision--Amendment of section 80-IB by Finance (No. 2) Act, 2009--Insertion of Explanation to section 80-IB(9)-- Explanation defining “undertaking†to mean “all blocks licensed under single contractâ€--Amendment prospective in operation--Retrospective effect given to affected vested interests in property of persons--Violated article 14-- Explanation to section 80-IB(9) not valid-- Niko Resources Ltd. v. Union of India (Guj) . . . 369
S. 133 --Income-tax enquiry--Powers of income-tax authorities--Constitutional validity of provisions--Amendment to section 133(6) by Finance Act, 1995, giving power to income-tax authorities to call for information even where no proceedings were pending under Income-tax Act--Amendment valid-- Pattambi Service Co-operative Bank Ltd. v. Union of India (Ker) . . . 254
S. 220 --Recovery of tax--Settlement of cases--Interest for default in payment of tax--Application for settlement of case--Interest payable from date of default till date of admission of application for settlement of case-- CIT v. Smt. Leonie M. Almeida (Bom) . . . 304
S. 245D --Recovery of tax--Settlement of cases--Interest for default in payment of tax--Application for settlement of case--Interest payable from date of default till date of admission of application for settlement of case-- CIT v. Smt. Leonie M. Almeida (Bom) . . . 304
S. 256 --Reference--Powers of High Court--Power to consider all aspects of question referred-- International Computers Indian Manufacture Ltd. v. CIT (Bom) . . . 243
S. 260A --Appeal to High Court--Limitation--Condonation of delay--Assessee deciding not to appeal though there were decisions of other High Courts which were favourable--Appeal after five years after favourable decision by jurisdictional High Court--Delay could not be condoned-- Somerset Place Co-operative Housing Society Ltd. , In re (Bom) . . . 307
Ministry of Finance
31-May, 2015 13:53 IST
Income Tax Return Forms ITR 1, 2 and 4S Simplified for Convenience of the Tax Payers;
A New Form ITR 2A Proposed which can be Filed by an Individual or HUF who does not have Capital Gains, Income from Business/Profession or Foreign Asset/Foreign Income; In Form ITR 2 and the New Form ITR 2A, the Main Form will not Contain more than 3 Pages, and other Information will be Captured in the Schedules which will be Required to be filled only if applicable;
As the Software for these Forms is under Preparation, they are likely to be available for e-filing by 3rd week of june 2015;Time Limit for Filing these Returns is also Proposed to be Extended up to 31.08.2015;
Only Passport Number, if available, would be required to be given in forms Itr-2 and itr-2A. Details of Foreign Trips or Expenditure thereon are not required to be Furnished
Forms ITR 1, 2 and 4S for Assessment Year 2015-16 were notified on 15th April 2015 (15.04.2015). In view of various representations, it was announced that these ITR forms will be reviewed. Having considered the responses received from various stakeholders, these forms are proposed to be simplified in the following manner for the convenience of the taxpayers:-
1) Individuals having exempt income without any ceiling (other than agricultural income exceeding Rs. 5,000) can now file Form ITR 1 (Sahaj). Similar simplification is also proposed for individuals/HUF in respect of Form ITR 4S (Sugam).
2) At present individuals/HUFs having income from more than one house property and capital gains are required to file Form ITR-2. It is, however, noticed that majority of individuals/HUFs who file Form ITR-2 do not have capital gains. With a view to provide for a simplified form for these individuals/HUFs, a new Form ITR 2A is proposed which can be filed by an individual or HUF who does not have capital gains, income from business/profession or foreign asset/foreign income.
3) In lieu of foreign travel details, it is now proposed that only Passport Number, if available, would be required to be given in Forms ITR-2 and ITR-2A. Details of foreign trips or expenditure thereon are not required to be furnished.
4) As regards bank account details in all these forms, only the IFS code, account number of all the current/savings account which are held at any time during the previous year will be required to be filled-up. The balance in accounts will not be required to be furnished. Details of dormant accounts which are not operational during the last three years are not required to be furnished.
5) An individual who is not an Indian citizen and is in India on a business, employment or student visa (expatriate), would not mandatorily be required to report the foreign assets acquired by him during the previous years in which he was non-resident if no income is derived from such assets during the relevant previous year.
6) As a measure of simplification, it has been endeavoured to ensure that in Form ITR 2 and the new Form ITR 2A, the main form will not contain more than 3 pages, and other information will be captured in the Schedules which will be required to be filled only if applicable.
As the software for these forms is under preparation, they are likely to be available for e-filing by 3rd week of June 2015. Accordingly, the time limit for filing these returns is also proposed to be extended up to 31st August, 2015 (31.08.2015). A separate notification will be issued in this regard.
No FDI in multi-brand retail, 32 IPO proposals in Modi govt's first year
No FDI in multi-brand retail, 32 IPO proposals in Modi govt's first year
Over dozen sections under the new Companies Act effective from May 29th
MCA notifies May 29, 2015 as effective date for Sections 1 to 12 and Sections 15 to 23 of Companies (Amendment) Act, 2015 to come into force; The enforced sections relate to change in definitions of private co & public co with regard to the paid up share capital, deposits, dividend declaration, loan to directors, related party transactions, investigation of companies, establishment of special courts, constitution of Tribunal benches; Sections pertaining to powers of auditors relating to fraud and audit committee have not been enforced; MCA also notifies Rules for the enforced sections; These rules are Companies (Share Capital and Debentures) Second Amendment Rules, 2015, Companies (Declaration and Payment of Dividend) Second Amendment Rules, 2015, Companies (Incorporation) Second Amendment Rules, 2015, Companies (Registration of Charges) Amendment Rules, 2015, Companies (Registration Offices and Fees) Second Amendment Rules, 2015 : MCA
Director has unfettered right to resign despite co's outstanding-liabilities; Co. refusal ill-founded
CLB u/s 614 of Companies Act, 1956 ('the Act') directs respondent co. to file Form 32 with the Registrar for petitioner's (founder promoter & director) resignation from his directorship, as it defaulted in doing so despite 14 days' notice by petitioner to it; Rejects respondent's contention that petitioner could not resign until all liabilities incurred by company at behest of petitioner were cleared, holds that, "The said reason cannot be a ground to withhold in filing form 32 with the concerned RoC showing cessation of petitioner as director due to resignation"; Also observes that there is no provision in the Act, Regulations thereof or in company's articles regarding acceptance of resignation of a director by the Company; Holds that even Section 283 of the Act which prescribes vacation of office by directors does not contain any provision regarding acceptance of resignation, thus, a director can resign at any time from his office; Observes that petitioner tendered his resignation vide letter, thus his intention was explicit & clear and thus resignation took effect from the date of letter, however, holds that such resignation would not relieve petitioner from any liability, which he might have incurred while in office:Chennai CLB
The Order was passed by Shri Kanthi Narahari, Judicial Member, CLB.
PCS K.S. Ravichandran appeared on behalf of Petitioner.
Reclassifying promoters as public shareholders to meet 25% threshold gross misrepresentation
SEBI freezes voting rights and all corporate benefits of 31 promoters of Taparia Tools Ltd. ('Company') for non-compliance of minimum public shareholding ('MPS') of 25%, also prohibits co.'s promoters and directors from dealing in co.'s shares; Observes that co.'s promoter group held 94% stake in co. and just to represent that MPS norms were complied with, co. reclassified few promoters as 'public shareholders', holds that such 'reclassification' was not one of approved methods for complying with MPS norms; Observes that the co. made an attempt to evade compliance with MPS norms and had misrepresented that noticee co. had achieved compliance with MPS norms, by merely reclassifying a few promoters as public shareholders; Points out that Rule 19A of Securities Contracts (Regulation) Rules, 1957 ('SCRR') [relating to Minimum Public Shareholding Requirements] was inserted to provide for a dispersed shareholding structure which is "essential for the sustenance of a continuous market for listed securities to provide liquidity to the investors and to discover fair prices"; States that co.'s promoters/promoter group would have had an advantage on account of their disproportionate stake compared to public in their Company and also placed them in a more advantageous position as compared to promoter/ promoter groups of compliant companies on account of violating regulatory requirement prescribed in SCRR, relies on SAT observations in Gillette Limited vs. SEBI:SEBI
The Order was passed by Shri Prashant Saran, Whole Time Member, SEBI.
FDI policy revised; NRI investment deemed to be domestic investment
Govt of India reviews FDI policy on investments by NRIs, persons of Indian origin (PIOs) and overseas citizens of India (OCIs); Amends definition of NRI to include OCI cardholder under its ambit, earlier citizens of India & PIOs were only included; Investments by NRIs shall be deemed to be domestic investment at par with investment made by residents; Such policy to come into effect from June 18, 2015 : DIPP Press Note
Click here to read more.
Govt. revises investment limit for cases requiring Govt approval
Govt of India revises limit of investment that require approval of Foreign Investment Promotion Board (FIPB) / Cabinet Committee of Economic Affairs (CCEA); FIPB to consider proposals with total foreign equity inflow of Rs. 3000 cr (earlier it was Rs. 2000 cr); Proposals with foreign equity inflow of more than Rs. 3000 cr to be placed before CCEA; CCEA to also consider proposals referred to it by FIPB; Such revision to take effect from June 18, 2015 : DIPP Press Note
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