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IT Dept moves SC Bollywood on tour operators’ itinerary India helps tame tomato prices in Pak |
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Tatas in bid to take over Jaguar Market Scan Tax Advice
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IT Dept moves SC
New Delhi, October 28 Seeking quashing of the court's July 9 order on a case involving Morgan Stanley's captive BPO firm Morgan Stanley Advantage Services (MSAS), the department submitted that MSAS was carrying out core business activities for the parent and not just back office operations. The court had earlier upheld the Authority for Advance Ruling (AAR) order that MSAS was not a permanent establishment (PE) as it was performing only back office operations in India and cannot be taxed under PE rules. Challenging the judgement, the department submitted that the norm that profits of multinationals' operations in the country had to be taxed only on arm's length payment (market price) to the captive entity cannot absolve them from payment of tax on other transactions. The remuneration at market price to BPOs and the taxability on the profits of foreign companies were different from each other, it said, adding: "...arm's length payment to the service provider cannot extinguish the taxability of the profits of the foreign principle. "A proposition to such effect in the impugned judgement goes against the internationally accepted principles on attribution of profits to the PE." The department contended that "the Supreme Court grossly erred in holding that the business activities carried out by MSAS were back office operations." While stating that Morgan Stanley carried its business through MSAS and thus constituted a fixed PE in India, the department said the US investment banker had in effect outsourced some of its "substantive" business functions to MSAS which cannot be termed as a "mere auxiliary and ancillary business functions." Seeking a review of the judgement, the petition said the court's observation that MSAS had no authority to conclude contracts was not important as "what is of relevance is the substance of authorisation given to the agent and not the mere form." The department also said the apex court while determining tax liability had erred in holding that the Transactional Net Margin Method (net profit margin realised by the enterprise from a comparable uncontrolled transaction) was the appropriate method for determination of the arm's length price in respect of the transaction between Morgan Stanley and
MSAS. — PTI |
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Bollywood on tour operators’ itinerary Mumbai, October 28 According to Asgar Khan, CEO, Viking Tours and Travels, the two-day package allows tourists to get a real life feel of the Indian film and television industry. "Tourists can visit prominent locations featuring in hit movies, major film and television studios and if lucky get to view an actual film shooting" says Khan. Such spots include the long steps in front of the Asiatic Society library, Marine Drive, the basketball court featured in ‘Kuch Kuch Hota Hai’ etc. Called `Bollywood Trails', the two-day package includes the favourite past-time of out-of-towners flocking to Mumbai - an opportunity to gawk at the bungalows and houses of their favourite stars. Amitabh Bachchan's bungalow at Juhu will certainly be on the package as will be the prominent restaurants and coffee shops that dot Juhu in suburban Mumbai. The tour operators have also tied up with recording and animation studios in the city so that visitors get a first-hand experience on the post-production aspects of film making. The package is complete with an evening out at the watering holes frequented by the stars. According to the promoters, the cost of the package ranges between $379 and $969 depending on the facilities availed of by the tourists. |
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India helps tame tomato prices in Pak New Delhi, October 28 Tomato traders say ever since truckloads of tomato consignments started arriving in Pakistan through the Wagah border, the price of the vegetable has come down substantially there. Reportedly, the prices have almost halved in the past 10 days. Incidentally, Punjab Chief Minister Parkash Singh Badal had flagged off the first load of tomatoes to Pakistan on October 1 from Attari. Pakistani media reports suggest that tomato prices in Lahore had gone up to Rs 91 per kg on October 17, but Indian imports brought them down to Rs 35-40 per kg. |
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Tatas in bid to take over Jaguar
London, October 28 The Tata group, headed by Ratan Tata, is set for a battle royal with One Equity, the private-equity arm of American bank JP Morgan, over Jaguar and Land Rover, the two British marques that have been put up for sale by Ford. Second-round of bids for the famous brands are due tomorrow and sources said the field, currently comprising six contenders, is likely to be narrowed to two. The Tata group is expected to lead the race, but will face stiff competition from One Equity, the private-equity arm of American bank JP Morgan, according to the Sunday Times. The One Equity bid is being led by Jac Nasser, the former chief executive of Ford. All interested parties have toured the two companies' plants and seen the new Jaguar XF, a model that will go on sale in March and is regarded as crucial to the marque's future. The sale of Jaguar and Land Rover is part of a radical reshaping of Ford, which is struggling to return to profitability in the face of crippling healthcare and pension costs and competition from foreign carmakers.
— PTI |
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SEBI’s ban on P-Notes timely by J.C. Anand SEBI’s recent announcement on “Participatory Notes” (P-N) that foreign institutional investors (FIIs) cannot issue fresh P-N and will have to wind up their current position in 18 months will bring transparency in the stock market and prevent the laundering of dirty domestic funds as well as the investment of terror funds in the Indian stock market through P-N. P-N are derivative instruments used by the foreign funds not registered in India for trading in the domestic market. These investors who want to remain anonymous and to hide their identity invest through P-N by depositing funds in the US or European operations of the FIIs which use their propriety account to buy stocks or dabble in the F & O market. According to a top financial paper, the notional value of P-N stood at Rs 3,53,484 crore till August this year. P-N are being currently misused by the FIIs by allowing one P-N holder to sell to another P-N holder through their books outside the purview of the Indian stock exchanges. They are virtually running parallel mini exchanges outside the country. They charge high brokerage fees and investors willingly pay high brokerage fees to maintain their anonymity. SEBI has directed that (i) no fresh P-N will be issued by FIIs and they have to wind up their current position in 18 months. (ii) In the spot market, FIIs will be allowed to issue P-N that are more than 40 per cent of their assets. (iii) Those FIIs that have issued P-N less than 40 per cent of their assets can issue additional instruments at the rate of 5 per cent of their assets. SEBI’s new rules are timely are likely to be effective in regulating and checking the inflow of foreign funds in Indian stock market. This is not likely to block or impede the inflow of foreign funds though it may affect investments in F & O sector of the stock market. SEBI has allowed 18 months to the FIIs to wind up their P-N which gives ample time to the stock market to adjust itself to the situation. It was feared that the stock market may react adversely to the SEBI’s announcement but this has been disapproved by the response of the stock market on Friday (October 27). The Sensex was up by 472 points (2.52 per cent) and closed at 19243 points. Some scrips like L & T and Tata Steel registered new high levels. However, apart from blue chip scrips, the market has largely remained untouched by the rise in the Sensex and Nifty. Investors should stay away from the market for the present and make investments only when the market dips. Interest rates by the bank deposits are likely to be reduced. The investors who are willing to take some risk may invest in the “balance” or in “debt funds” operated by the mutual funds. Investment in PPF is still rewarding. Tata Steel have fixed November 5, 2007 as the “record date” to receive rights issue of equity shares and cumulative convertible preference shares. The ratio for rights issue is 1 for 5 shares held and ex-date is October 29, 2007. Federal Bank has announced rights issue in the ratio of 1 share for 1 share held at a price of Rs 250 a share of Rs 10 face value. The present market rate of Federal Bank share is around Rs. 388.
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MFs held for more than a year are long-term capital assets by S.C. Vasudeva Q. I am a government employee. I am investing a part of my small savings in mutual fund - equity-based through SIP at the rate of Rs 1,000 per month since November 2005. On April 16, 2007, I redeemed units worth Rs 20,000. Please let me know whether mutual fund investment is tax free? Or, redemption amount attracts income tax? If not, does this is required to be shown in the return for financial year 2007-08? If so, what would be my tax liability on Rs 20,000 redemption amount and the formula? — V.K.Puri, Chandigarh A. Since the units of mutual funds redeemed by you were held for more than one year, such units would be classified as long-term capital asset. Any profit on redemption of such units would thus be a long-term capital gain. Section 10(38) of the Act provides for exemption of income arising from the transfer of a long-term capital asset being units of an equity-oriented fund provided transactions has been entered after the date of coming into force of the provisions relating to the Securities Transaction Tax and such transaction is chargeable to securities transaction tax under the aforesaid provisions. Since the particulars in this regard are missing in query, I am unable to provide you a complete answer in this regard. However, you may ascertain whether the units redeemed in your case were subjected to securities transaction tax. In case securities transactions tax has been paid the income from such capital gain would be tax free otherwise the capital gain arising on redemption would be taxable at the rate of 10 per cent plus education cess at the rate of 3 per cent. Any income, which is claimed to be exempt from tax, is required to be shown in the return of income. Therefore, in case the income is claimed to be tax-free, it should be shown in the return. PPF account
Q. I had opened a PPF account in post office on March 30, 1991, which was matured on March 31, 2006. I got this account extended for another five years. On April 7, 2006, I withdrew some amount from it. Now, I want to withdraw the remaining amount from this account alongwith up date interest. Please let me know: 1 Can I withdraw the total amount along with interest? 2 If not the total amount then what percentage of the balanced amount can be withdrawn? 3 Can P.P.F. account be closed during the extended period of five years prematurely? 4 If this account can not be closed prematurely during the extended period, it is necessary to deposit some amount in this account in each financial year? — Ram Murti, Khanna A.
1 In accordance with sub-clause (3B) of clause 9 of the Public Provident Fund Scheme 1968, a subscriber opting to subscribe for extended block period of five years, shall be eligible to make partial withdrawal not exceeding one every year by applying to the accounts office in Form C or as near thereto as possible, subject to the conditions that the total of the withdrawals during the five year block period, shall not exceed 60 per cent of the balance at his credit at the commencement of the said period. 2 The extention for a further period of five years is granted on the basis of option exercisable under sub-clause 3A of clause 9 of the scheme. The said clause requires the depositor to state that he would continue to subscribe to a further block period of five year according to the limits of subscription prescribed in the scheme. In my opinion, therefore, you should continue depositing a token sum of Rs 500 every year so as to complete the extended block period of five years in order to avoid any complications in this regard. TDS deduction
Q. My son is a guest faculty professor for few M.B.A institutions. He follows the mercantile system of accounting. For the lectures delivered by him during March (financial year 2006-07), one of the institutes paid by cheque dated April 9, 2007, for Rs 89,785 after deducting TDS of Rs 4,825. The institute is showing this payment as well as the TDS in the financial year 2007-08. The TDS was paid into the government account on May 23,2007. Another institute had also followed the same procedure, but depositing the TDS in the government account on July 7,2007. Clarification solicited: As mercantile system of accounting is being followed by my son, can he show the above incomes in the financial year 2006-07? Can he adjust the TDS deducted by the institutes in the tax to be paid for the financial year 2006-07 although these TDS were deposited by the institutes in the government account only in the financial year 2007-08? — H.P.S. Iyer A. In case your son is following the mercantile basis of accounting, the Guest Faculty fee will have to be accounted in the year in which it became due to be received by your son. Accordingly, fee due from both the Institutes will have to be included in the return for the assessment year 2007-08 (financial year 2006-07). The TDS deducted by institutes though deposited in the succeeding year, will be allowed to be adjusted in the year in which the income in respect of which tax has been deducted is assessable in accordance with the method of accounting followed by an assessee. Your son should, in my opinion be able to get the adjustment for the TDS in the assessment year 2007-08 in view of the aforesaid provisions of the Act. |
SBI net up 36 pc Dabur foray IDBI plan Gitanjali stores |
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