Friday, May 29, 2015

FORM vs SUBSTANCE - A non-tax case ?!

Posted: 29 May 2015 03:26 AM PDT
It is not very often that courts in India have had the occasion to interpret and rule on the Foreign Direct Investment (FDI) Policy of the Government of India. Earlier this month, the Bombay High Court issued its ruling in IDBI Trusteeship Services Ltd. v. Hubtown Ltd., which relates to the legalities of a foreign investment structure that involved compulsory convertible debentures (CCDs) issued by an Indian company to a foreign investor the proceeds of which were in turn used by the Indian company to invest in optionally convertible debentures (OCDs) of two other companies operating in the construction development sector. The specific issues in question relate to the permissibility of assured returns to the foreign investor and the nature of downstream investments. Sandip Bhagat, et. al., discuss the facts, issues and decision in an articleon The Firm.

Here, I propose to highlight some of the key implications of this judgment that may be of wider relevance:

1. The Bombay High Court has demonstrated its willingness to view the transaction as a whole by transcending beyond the form and into the substance. In other words, although the transaction involved two stages of foreign investment into a holding company, which in turn invested in two operating companies, the court effectively viewed the transaction as a whole and not in separate parts. The openness to re-characterizing the transaction may cause some amount of uncertainty in structuring foreign investments. Moreover, the reliance of the Court in doing so on judgments of the Supreme Court relating to aspects such as taxation and cases involving fraud leaves the debate somewhat open.

2. The implications of the judgment on downstream investments are categorical in that foreign owned/controlled investment companies in India must follow all aspects of foreign investment regulations (including types of investment instruments such as equity shares or CCDs). This enhances the compliance requirements of downstream investments.

3. In essence, the Court declined to validate the transaction due to the presence of an assured return. This will have to be considered in the context of pronouncements by the Reserve Bank of India (RBI) of its intention to liberalize greater flexibility in the pricing of instruments, including an assured return, in the context of optionality clauses, as discussed here.

In any event, this does not appear to be the final word as the Court was only determining whether there are triable issues in a summary suit that require further adjudication. The hearing in the suit is to follow.

Tuesday, May 26, 2015

Ides OF...


  itat on CAs' tax practice


Vijay V. Meghani vs. ACIT (MA By ICAI) (ITAT Mumbai)

Strictures passed against ICAI By ITAT for alleged “deteriorating standards” and “losing its grip over the Income tax matters” toned down on the basis that they were made in the context of a "hypothetical situation" and were not "intended to criticize the functioning of the ICAI"
The Income tax Appellate Tribunal, being a part of Government of India, should not shut its eyes when it is noticed that certain developments occurring in the Country may affect the Country as a whole, more particularly when the reputation of particular profession, from whom the Tribunal is getting assistance in the dispensation of justice, is at stake. Accordingly, we sincerely believe that it is the bounden duty of not only the Tribunal, but also the duty of one and all to point out and discuss about such kind of developments, when it is noticed that the same may affect the public at large. There cannot be any controversy that the interest of our Country is Supreme and no citizen can or should compromise on the same

....விட்டதும், தொட்டதும் .....

 அது யாரு அலமு பாட்டிதனே; சௌக்கியமா ; ரொம்ப நாள் ஆச்சு பேசி..
என்ன சொல்றேள் , அரை மணிக்கு முந்திதான் பேசினேனா, அது கிடக்கட்டும் விடுங்கோ , ரொம்ப ஞாபக மறதி , இப்ப ஒரு முக்ய சமாச்சாரம்னா..
சொல்லுடி அம்மா..
அது நீங்களே பபெர்லே படிசிருபேல் ..இருந்தாலும்
அந்த கொல்கத்தா சேதி
ஒ அந்த ஆம்படயன் பொண்டாட்டியே கத்தியால் குத்தி, அவளே அப்படி ஒன்னும் இல்லேன்னு சொல்லி ...
என்னமோம்மா, இந்த காலத்திலும் இப்படி ஒரு பதிவ்ரிதையான்னு ...
கரண்ட் போய்டுது , போனால் போகட்டும் போ(டா) - சாரி , - டி

<<<<<அலமு பாட்டிக்கு அந்தநாள் பாட்டு நினைவுக்கு வர ....

Jun 13, 2015

Robots Aren't As Good As Humans At Predicting Supreme Court Decisions


Foreign investors ask for too much

Tax evasion It’s serious crime STOONN/SHUTTERSTOCK.COM


Carping over India’s tax system won’t do. They should abide by global norms that deal with offshoring and tax havens »


Ides of September 16 < Should this happen in the US, believed-to-be-far advanced by any standard, hence as to be more secured against such astounding /shocking developments, the trillion dollar question is this: could any of the, in comparison, far less advanced countries across the globe continue to feel comfortable, and live in peace, in of course material terms, impudently or otherwise; and if so, for how long? >>>>>>>>>>>>>>>

IRS hit by cyberattack, thousands of taxpayers’ information stolen

Thieves managed to steal information on thousands of taxpayers from the IRS, Commissioner John Koskinen said Tuesday -- though he insisted the breach didn't affect ... read more >