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IOC drills for deal  in Congo
New Delhi, March 11
IndianOil Corporation (IOC) is likely to acquire French company Maurel & Prom's stake in oilfields in Congo for about $1.5 billion. Maurel & Prom had on February 22 announced sale of its interest in the producing fields of M'Boundi and Kouakouala and other exploration areas in Congo to Eni of Italy for $1.434 billion. But the transaction was subject to waiver of pre-emption right by partner Burren Energy of the UK.

MTNL bids to dial the Gulf
Dubai, March 11
Ten consortia led by international firms, including India's MTNL, are competing for Saudi Arabia's second landline phone licence, which will break the monopoly of Saudi Telecom Company (STC) in the West Asia's largest telecom market.

Bharti to invest $8 b
New Delhi, March 11
Bharti Airtel will invest a massive $8 billion by 2010 to have a 25 per cent market share. "By 2010, estimates are that India will have a subscriber base of 400-500 million.

Market Update
Yen jitters far from over
by Lalit Batra
M
arkets continued to yo-yo the last week but ended on a flat note. The BSE Sensex settled with a marginal loss of one point, at 12,884, while the Nifty settled at 3,718, a loss of nine points.

Tax Advice
Proceeds of life insurance policy tax-free
by S.C. Vasudeva



Brooklands cometh!
Bentley’s new Brooklands model, which was on display at the just-concluded Geneva car show. Bentley plans to drive in the Rs 4 crore Brooklands to India next year
Bentley’s new Brooklands model, which was on display at the just-concluded Geneva car show. Bentley plans to drive in the Rs 4 crore Brooklands to India next year. India’s fast-expanding list of billionaires is increasingly attracting world’s luxury car makers to sell some of the most expensive marque. — Reuters

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IOC drills for deal in Congo

New Delhi, March 11
IndianOil Corporation (IOC) is likely to acquire French company Maurel & Prom's stake in oilfields in Congo for about $1.5 billion.
Maurel & Prom had on February 22 announced sale of its interest in the producing fields of M'Boundi and Kouakouala and other exploration areas in Congo to Eni of Italy for $1.434 billion. But the transaction was subject to waiver of pre-emption right by partner Burren Energy of the UK.

"Burren Energy is opposed to the sale. It is likely to exercise its pre-emption right to stop the sale and instead bring in IOC," an industry source said. The British firm has time till the end of this month to exercise its pre-emption right.

IOC and its partner Oil India Ltd are in advanced stage of discussion with Burren Energy for possible takeover of Maurel & Prom's interest in Congo. "Burren Energy wants operatorship of the fields in Congo.

By exercising its pre-emption right, it will first acquire Maurel & Prom's interest in the fields and through a back-to-back agreement sell most of it to IOC-OIL combine," he said.

IOC-OIL combine had been interested in Maurel & Prom's Congo assets and their internal valuation had put the asset value at about $1.5 billion, $100 million more than what Eni is paying. Maurel & Prom had last month announced sale of its 48.6 per cent interest in M'Boundi oil field and 66 per cent in Kouakouala-A oilfield to Eni. Besides, it was selling 50 per cent in Kouakouala B, C, D exploration blocks and 50 per cent Kouilou exploration permit.

Burren Energy has 31.5 per cent interest in M'Boundi field and 25 per cent interest in Kouakouala.

If the acquisition goes through, IOC-OIL will get 17,000 barrels of oil per day from M'Boundi field in 2007. This will increase to 28,000 barrels per day in 2010, the source said.

The giant fields holds 1.4 billion barrels of in-place oil reserves and produces a high quality oil (39 degree API).

The Kouilou and Kouakouala license areas, located onshore along the Atlantic coast of Republic of Congo (Brazzaville), extended over an area of about 2,600 sq km and contain two producing fields - M'Boundi and Kouakouala, of which M'Boundi is by far the largest. The operator in each case of Maurel & Prom, the French independent oil company.

M'Boundi field currently produces 56,100 barrels of oil per day. Kouakouala field produces 1,000 barrels of oil a day.

The fields are connected by pipelines to the Total-operated export terminal at Djeno on the Atlantic coast, a distance from M'Bouondi of about 40-km, where the crude is blended for export. The M'Boundi and Kouakouala crudes are very light low sulphur crudes. — PTI

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MTNL bids to dial the Gulf

Dubai, March 11
Ten consortia led by international firms, including India's MTNL, are competing for Saudi Arabia's second landline phone licence, which will break the monopoly of Saudi Telecom Company (STC) in the West Asia's largest telecom market.

“The Communication and Information Technology Commission (CITC) has received applications from 10 consortia in response to the request forms issued on October 24, 2006,” CITC said.

“During the coming weeks, STC will study and evaluate the applications, based on the criteria specified in the request for applications (RFA),” Sultan Al Malik, a spokesman of the commission, told Arab News.

The 10 consortia include Al-Shola (MTNL India), Khaled Ahmed Al-Juffali Co (WorldCall Telecom of Pakistan), Makkah Telecom (China Telecom), and Bayanat (Korea Telecom).

Others are Optical Communications Company (Verizon), Saudi Telecom Holding (Qtel-Atco), Al-Mutakamilah (Hong Kong's PCCW), Electronet (Autelia of Italy), Etihad Etisalat (Mobily) and Atheeb Telecom. — PTI 

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Bharti to invest $8 b

New Delhi, March 11
Bharti Airtel will invest a massive $8 billion by 2010 to have a 25 per cent market share.
"By 2010, estimates are that India will have a subscriber base of 400-500 million. Bharti strives to retain up to 125 million or 25 per cent of the market," group chairman Sunil Mittal said.

The aggressive expansion programme assumes importance in the wake of imminent entry of global mobile leader Vodafone through acquisition of Hutch-Essar. The company since its inception has made an investment of about $8 billion (about Rs 36,000 crore) for various services, including mobile, basic, national and international long-distance, undersea cable and broadband services.

"We are spending nearly $2 billion every year as the future continues to be stronger than the past... by 2010, we would have doubled the investment.

RCom roaming pact

Meanwhile, ahead of Cricket World Cup, Reliance Communications (RCom) today announced the launch of international roaming with Oceanic Digital, a leading CDMA operator in Jamaica. "The Reliance customers will be able to make local and incoming calls from Jamaica at the rate of Rs 16 per minute while international call to India and rest of world will cost Rs 48 per minute," Reliance officials said.— PTI

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Market Update
Yen jitters far from over
by Lalit Batra

Markets continued to yo-yo the last week but ended on a flat note. The BSE Sensex settled with a marginal loss of one point, at 12,884, while the Nifty settled at 3,718, a loss of nine points.

A host of factors, including lack of inflows at higher levels, the surprise CRR-hikes, high valuations, rising inflation, high interest rates and fears of an earnings slowdown in the coming quarters has kept the sentiment edgy all along.

The latest and most dreadful demon to strike was unwinding of “yen-carry trade”, which had severely affected the Chinese bourses in particular, but the correction was diwespread across global markets. This is expected to weigh on the sentiment for few more weeks, as further possible repatriation of overseas profits by Japanese banks and companies, ahead of the country’s fiscal ending March 31, could lead to further rise of the Japanese currency against the US dollar and a resultant sell-off in share. Back home, inflation continued to be a cause of worry and any increase in this figure will dampen the sentiments, spooking a fresh sell-off wave.

Mahindra & Mahindra

India’s largest tractor-maker M&M, along with its subsidiary Mahindra Holdings and Finance Ltd, won the bid to acquire around 43.5 per cent stake in Punjab Tractors Limited (PTL) for Rs 360 a share in an all-cash deal. The private equity fund Actis’ 29 per cent stake and the Burman family’s 14.5 per cent stake in the PTL was up for sale. PTL has an installed capacity to manufacture 60,000 tractors per annum and enjoys a market share of 10 per cent in the Indian market.

Acquiring PTL makes good strategic sense for M&M as it would help consolidate its presence in the 31-40 HP category and allow it to make the presence felt in the over 51HP category. The acquisition would give M&M a dominate status in the Indian tractors industry, increasing its overall market share from current 30 per cent to 40.

The acquisition would help M&M take advantage of the strong brand equity of PTL’s Swaraj. Further, it would also give M&M Access to the strong distribution network of PTL. PTL has a strong network of 433 dealers across the nation compared to 450 dealers of M&M.

PTL’s acquisition would yield substantial long-term benefits for M&M as it would give M&M a greater presence in the higher-HP segment and a higher overall market share. It would also be able to make better use of PTL’s strong distribution network and brand equit. Investors with two to three years perspective may buy in to M&M.

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Tax Advice
Proceeds of life insurance policy tax-free
by S.C. Vasudeva

Q. I am a pensioner from a bank, getting a total pension of Rs 10,8000/-p.a. I had invested Rs 2 lakh in Bima Nivesh 2001 (single premium) policy with compounded guaranteed additions. The policy matured in December 2006. Kindly advise if there is any income tax liability on the proceeds on maturity of the policy.

— Harinderpal Singh, Jalandhar

A. Section 10(10D) of the Act exempts from tax any sum received under the life insurance policy, including the sum allocated by way of bonus of such policy other than any sum received under an insurance policy issued on or after the 1st day of April 2003 in respect of which the premium payable for any of the years during the term of the policy exceeds 20pc of the actual sum assured. Since you had taken the policy of Bima Nivesh prior to 1st April 2003, the entire sum received under the policy should be exempt from tax in view of the provisions of Section 10(10D) of the Act.

IT return

Q. Please advise on following points:

A. In one of the meeting of S.C. Association, a tax consultant explained that earlier I.T. returns could be filed direct — self by the members.

Now, hence forth, I.T. returns shall have to be got prepared/submitted through I.T. return preparer appointed/ to be appointed by the Deptt, IT. returns cannot be submitted direct. Kindly advise.

B. I am an NRI and have been allotted PAN No. I am having income as interest on banks/FDR companies, dividend from shares/mutual fund, deposits invested in Indian rupee. So far I have been filing I.T. returns. Dividend capital gains stand exempted, now my income on FDR's bank/companies etc. is below taxable limit. Can I or is it essential for me to file I.T. return, I want to retain PAN No. which is mandatory for investment in M.F./I.P.Os Shares.

C. In the daily Tribune dated 27.03.2006, you have suggested regarding NRO Account that withdrawals are permitted for personal use of the account holder.

Can't deposit in NRO Account be used for further investment in Mutual funds/I.P.O. shares on non-repatriable basis.

— Jeewan Jyoti Kapur, Chandigarh

A. (a) There is no necessity for you to file the return through an income-tax preparer. You can still file your own return.

(b) In case the income earned by you is from interest etc. and is below taxable limit without claiming any deduction under chapter VI-A of the income-tax Act 1961 (the Act), you need not file the income-tax return.

(c) The amount lying in NRO account can be utilised for making investments in mutual funds and in initial public offerings on non-repatriable basis.

Tax on interest income

Q. I am thankful for your advice on my query in Tribune dated the 16th instant under heading "No rebate permissible on Interest Income from FDRs".

Now, my query is in case of senior citizens, Form 15H can be filed if the total estimated income is NIL but as my income is well above Rs 1-85 lakh, the bank should deduct tax at source. Now it is not clear on what/which amount and at percentage the bank should deduct TDS. Sir, as per return filed by me for the year - financial year 2005-06, my income was/is:

Total income assessable 2,81,513

Tax payable 22,902

Less TDS 14,125

Payable 8,777

Add interest 1,023

Total 9,800

Property rent Rs 38,200/- — less house tax @ 30 pc 1,400/-
Net income 25,760

Pension = 79,892/-, this includes DA and medical allowance

Interest from FDRs + 1,75,861/-, I have account in two banks. All FDRs are in joint account with my children - In all, first name is mine, (M.S. Dewan) - Payable (to either plus survivours - out of the two bank - one has deducted TDS Rs.14,125/- other bank has not deducted any TDS i.e. on income interest of Rs 1,38,487/-. The other bank has not deducted any TDS.

(1) Now question arises, even when I am a senior citizen, is it compulsory for the bank to make deduction at the rate of 10 pc.

(2) Rental income is not a regular income — monthly or yearly — because in certain period it remains vacant whole or part.

(3) My children are living on different stations on rented houses. If they may live here the rental income will be NIL and when they are paying rent of other places, why adjustment cant be allowed here.

Sir, as already explained, I am 83 years old and cannot handle all such jobs without any help/assistance. Can I employ someone for my assistance/ help.

— M. S. Dewan

A. As explained in reply to your earlier query, the bank is obliged to deduct tax @ 10 pc on interest on fixed deposits. This is a legal requirement and the only exception is the filing of Form 15H by senior citizens whose income is below the taxable limit. The term "below the taxable income", for this purpose means that the total income of such person is below the maximum amount on which tax is not chargeable from a senior citizen. In case your children are paying house rent and are not entitled to house rent allowance or free accommodation, a claim for deduction can be made for rent paid by them under section 80GG of the Act, subject however to the limit specified therein.

Rebate on FDRs

Q. Very recently (August - September 2006) the Income Tax authorities have allowed rebate on fixed deposits up to Rs 1,00,000 only under Section 80C. The banks are doing such FDs for 5 years @ 8%-8.5% interest for individuals and senior citizens, respectively. Kindly advise as to whether the deposits made under Senior Citizens Saving Scheme 2004 @ 9% interest for 5 years during the current financial year 2006-07 (Assessment year 2007-08) are also subjected to rebate under Section 80C of the Act. Further, whether the banks should not deduct TDS on such deposits if form 15G/15H as applicable is given to them when the total income is not taxable.

— R. K. Aggarwal, Panchkula

A. The fact that making of fixed deposit for a period of 5 years has been included in section 80C of the Act is correct. The benefit in respect of such deposits is available for the financial year 2006-07. The bank would not deduct the tax at source provided Form 15H is filed with the bank declaring that the estimated total income of the previous year in which such interest income is to be included in computing your total income will be Nil.

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