Monday, March 30, 2015

A Professional & His Professional Life

April 11

Real estate trusts may remain stillborn

After effect of AAR controversial Ruling in Timken...?????????

While market regulator SEBI provided a workable structure, the mindset of the tax department has, unfortunately, not changed enough to help this innovative product that has been a success in many other parts of the world.

The sponsors, bankers and investors had mooted a few key demands. These included not levying taxes (capital gains or MAT on accounting profit) on swapping of shares of asset holding special purpose vehicles with units of BTs. A clarification is awaited from SEBI on whether existing multi-tier structures should be accepted.

The two major issues of levy of minimum alternate tax (MAT) on accounting profits and DDT on distribution of surplus by a BT are the reasons why BTs in India would likely be a still-born this time as well.

No MAT here

If a company swaps its shares or assets with units of a BT, it will be required to value the units of the BT at fair market value (FMV) and recognise the difference in FMV and cost of the shares or assets as a profit. This will result in a MAT of over 20 per cent being levied on the entire unrealised accounting profit, giving rise to a serious cash outflow without any inflow.
The tax department must realise that this is not a tax on profits earned but an unrealised accounting profit on the swap, and, hence, must not attract MAT.

How U.S. Corporations Print Their Own Money: The REIT ...

An Update >

Govt to press ahead with Rs. 40,000 cr tax demand on FIIs: Jaitley

 Comment: Ref. BL Col. ; Facebook

<AAR...on MAT

Source of provocation:

A Tale Of Two X Rulings (Author: AAR) » In Re The Timken Company (AAR)» Latest ...                   


The two Rulings of AAR on the issue of MAT are mutually contradicting; in that, in Timken case the Ruling has turned out to be adverse, whereas in the previous Carleton case it is in its favour. Albeit,the matrix of facts, of relevance,is indisputably no different but is on all fours. As perceived, if at all, the cause for the contradictory Rulings  seems to lie in reading and understanding the implications of the cinching sub-section (2) of section 115JB  differently.

Said sub-section (2) (before its amendment w.e.f. reads:
“(2) Every assessee,being a company, shall, for the purposes of this section, prepare its profit and loss account for the relevant previous year in accordance with the provisions of Parts II and III of Schedule VI to the Companies Act, 1956 (1 of 1956):“

The point to critically consider is this: Is not, in Timken case, the provision has been read and understood, wrongly so, as if, it reads:

 “(2) Every assessee, being a company, shall, for the purposes of this section, prepare its profit and loss account for the relevant previous year, AND in accordance with the provisions of Parts II and III of Schedule VI to the Companies Act, 1956 (1 of 1956):“(FONT supplied)

Over to experts active in the field for further deliberation and sharing individual thoughts, should that happen to be at variance.

Punctuation and the Interpretation of Statutes
Raymond B. Marcin
The Catholic University of America, Columbus School of Law

(Recommended Citation
Raymond B. Marcin, Punctuation and the Interpretation of Statutes, 9 CONN. L. REV. 227 (1977)

According to a school of thought, as is found echoed by case law in India, - be that as it could not have been normally expected otherwise, more so in the commonly given /faced context in which inept and resultant clumsy drafting has come to be increasingly  recognized, nay admitted, as the hallmark of today’s legislation in general,-punctuation need not be given so much importance as a puritan may think.

Should anyone care to and scout around- say, through Google search, should be able to locate a plethora of interesting material holding out a different school of thought founded on a varying  stroke of reasoning. For instance, look up the random instance, in criminal law regime  – HERE



Dreams are easy and so interchangeable when we’re young. But as John Lennon put it: “Life is what happens while you’re busy making other plans.” As we get more established in life and in our careers, it can seem harder and harder to consider a career change… no matter how badly you still want to pursue your lifelong ambition of launching your own tech startup or writing a hit TV comedy.

Yes; it must be a truly great, but mixed feeling of satisfaction, joy, etc., bundled up together. Only, perhaps, each component will, in comparison, be of varying measure, depending mainly on, besides individual’s EQ (- level of emotional quotient), his set goal of professional achievement in its ideal and profound sense!