Friday, October 10, 2014

TODAY SELECTEDs- to provoke thoughts

 Nov 7

The GReat 'Nani' - Memories Down The Lawyers'  Lane

Nani Palkhivala: The Courtroom Genius By Soli J. Sorabjee ...

Tax Titans » Nani Palkhivala's Top 10 Secrets Of Success


On the bright side, it also probably signals the court’s realisation that international commitments on confidentiality should be observed. This is not enough. The court must restrain itself from stepping into the executive’s domain. It does not work and brings discredit, ultimately, to both the judiciary and the executive.


Nov 1

ICAI President’s Message – November 2014


"...This requires a reasonable, simple and transparent taxation system, ....The Direct Taxes Code and the Goods and Services Tax will go some way in providing the former.."

In so suggesting, though not for the first time, that enactment of the DTC, in the same vein like GST,  is a way for betterment of the extant (direct) taxation system /regime,  the firm view to the contrary eminently propounded by informed legal circles, - based on well considered,  often debated in-depth but incisively concluded ,- has been blatantly over sighted.  For instance, in the recent edition of Palkhivala’s popular text book on the law holding the field for decades, the referred widely prevailing adverse experts’ opinion has been strongly endorsed. As has been brought to sharp focus, the supreme irony in the idea of going ahead with the enactment is that the DTC, belying the avowed objective, neither consolidates nor simplifies the language and structure of the extant law. On that premise, and for detailed reasoning given, it has been strongly advocated and sincerely hoped that the new code ought not replace the present Act.



Grey matter

The Supreme Court has rightly decided not to make public the list of individuals holding accounts... »      1 comment


Oct 30

But , by and large, the fact of life invariably come-across is this:

Abject ignorance / lack of wisdom if failing to realize that, - "time and tide wait for none"; and,  all the more so/true, of the fond expression used, but unwittingly, i.e. - "High Time".

 Across the Globe >

Main LInk


Accountancy Profession Worldwide


"Delusion' ! or more appropriately 'illusion' par non/negative -excellence ?

 To say, relatively / mutually  unrelated or disconnected is founded on abject imbecility, infertility of human mind/action !


Vijay Electricals Limited vs. ACIT (ITAT Hyderabad)

Click here to download the file in pdf format

< Fraud in determination of LIBOR/ EURIBOR no reason to discard it as ALP

Transfer pricing and tax havens - Khan Academy

Transfer Pricing: Economic, Managerial, and Accounting ...

OCT 18

 Old Maths X Modern Economists >

Money and the magical mathematics of Brahmagupta ...


People are generally more confident when the economy is stable and growing. And as a rule people are more willing to borrow when they are confident. Therefore when times are good both borrowing and spending rises creating a self-reinforcing boost to economic activity. The process of borrowing and spending becomes a self-fulfilling, positive feedback loop. The more we spend the more we borrow, the more we spend. Put differently there is a paradox of gluttony whereby the more we consume the more we can consume.
Unfortunately this process also works in the opposite direction. If confidence falls we begin to reduce our borrowing levels by paying down previously accumulated debts. This removes spending power from the economy thereby reducing economic activity, providing a self-ratifying justification for the original fall in confidence. This is Keynes’s famous self-reinforcing paradox of thrift – the less we spend the less we have to spend.

 › PerspectivesBehaviorism
·Classical Conditioning (Pavlov) | Learning Theories

Cross Refer:
According to Keynesian theory, changes in aggregate demand, whether anticipated or unanticipated, have their greatest short-run effect on real output and ... › More SubjectsEconomics
Keynes's theory of the determination of equilibrium real GDP, employment, and prices focuses on the relationship between aggregate income and expenditure.
Definition of Keynesian theory: An economic theory named after British economist John Maynard Keynes. The theory is based on the concept that in order for an ...



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Would you like to communicate any concerns you have to the Indian Government with regard to the way the Nokia tax case has been handled?
I don’t want to send any message to the Indian Government but I would just like to point out that the one thing needed is clarity. You have to know the exact rules, and that the rules are stable. Vodafone has won one case last weekend, so that’s a positive.



Bombay High Court Ruling in Favour of Vodafone in Share Issue Case

If viewed from a different stroke, WPRT “...The price was arrived at based on the methodology prescribed by the Controller of Capital Issues (CCI).”

This is one in, but not to be safely presumed to be the only one of the type, in the lately experienced series of instances in which common sense seems to have taken, rather, violently and vengefully pushed, to the proverbial ‘back seat’. Simply going by the writer’s narration, it is evident that the aggrieved party /its counsel has chosen to go to town, or to follow a beaten track, to urge and support its case against the Revenue. Instead of, in one’s viewpoint, as expected, questioning the propriety of the Revenue, regardless what the IT Act provides or not, in discrediting and tinkering with the ‘transfer price’  stated to have been arrived at by following the ‘methodology’ prescribed by the duly empowered and only competent authority, being the CCI.
To put it differently, the Revenue is not seen to have even remotely tried and questioned the right or wrong of the transfer price adopted by following the prescribed methodology. That is, in the nature of things, to be taken to be a pure and simple question of admitted ‘fact’; not of law, much less a “substantial question of law”. On that premise, the indicated possibility of the Revenue pursuing , more so righteously, the dispute any further, may turn out, -if properly canvassed against and argued, to be unwise and a wasteful prolongation of litigation.
Incidentally, this is the most certainly a matter for law experts to consider and recommend whether, through suitable measures, the CCI be required to go into, decide and give his finding, on a case to case basis, with a binding on the transfer price adopted, thereby leaving no scope for the Revenue to choose and go by its own reasoning de hors/ distinct, often diagonally opposite to the CCI prescribed methodology.  
  • Tail Piece: As a great law legend, ‘Nani’, reflecting from the bottom of his heart, said, - There can be no excellence in the law without excellence in lawyers.
(Source: His published speeches)

Vodafone India Services Pvt. Ltd vs. UOI (Bombay High Court)

< Aztec Software & Technology Services Ltd vs. ACIT
Jul 24, 2012 - Aztec Software & Technology Services Ltd vs. ... In Aztec Software vs. ... under the provisions contained in Chapter X of the Income-tax Act, 1961 that ... (3) of section 92C of the said Act are satisfied in the case of any assessee, ... down by the Special Bench, HELD by the High Court dismissing the appeal:.
< 5 Member Special Bench Transfer Pricing verdict affirmed without examining merits

In admitting the appeal filed under section 260A against the judgement of the 5 Member Special Bench of the Tribunal in Aztec Software vs. ACIT 294 ITR (AT) 32 / 107 ITD 41, the High Court has granted stay of “the operation and all further proceedings” of the said…

 See Also: Transfer Pricing: A definitive Guide.

Cross refer : Bom HC in Vodafone Intl.

Not Unrelated HERE>

misc. Inspiring Will of Shri Nani A. Palkhivala -

Oct 12

Chetna Mehra F Cascio, Distinguished University Professor at the University of Colorado Denver has a... »


With great power comes great responsibility: SAT
  • < The power to "issue such directions as deemed fit" is a sweeping and general one.  The use of such powers without even conducting a hearing was also brought into law in the last decade.
  • .....
  • Recently, the Securities Appellate Tribunal discussed these powers in an order, which I wrote about in my column in the Business Standard earlier this week.>
                                                               The author is a partner of JSA, Advocates & Solicitors. 
                                                               views expressed herein are his own.

<> Why to isolate and talk of only 'great’ power? One thinks the responsibility factor is something inbuilt in and hence  cannot be detached from any 'power' vested in an authority, more so a 'regulatory authority'. The responsibility is , to be precise, lies in mindfully  ensuring that the power is exercised only after a conscious exercise  of weighing the pros and cons of doing so. Further, it has to be so exercised only keeping in sharp focus the object / objective, in its comprehensive and altruistic sense, as envisaged, implicitly or explicitly, by the one or more statutory rules vesting such a 'power'.

The same is the vision to be ideally borne in mind in claiming or invoking a 'right' of every kind, to which is attached a corresponding responsibility factor to be kept in view, and frightfully taken an absolute and unreserved care. One has in mind the first of the several amendments made to the Constitution decades ago but failed to be acted upon even remotely. As a legal legend remorsefully lamented, in such matters it is "the people" who have consistently been failing the basic charter,- the bedrock of the nation's profound ethos, so to say.



Vodafone ruling to bolster foreign investments, say tax experts

Vindicates taxpayer’s stand; likely positive effect on other cases like Shell India »


Vodafone not liable to pay ₹3,200 crore tax in transfer pricing case: High Court

Our Bureau

he verdict could also be in favour of at least a dozen other companies including Shell India, which are tangled in such tax related issues. The Bombay High Court on Friday ruled that Vodafone is not liable to pay tax of ₹3,200 crore in... »      2 comments

<“Given that India has the largest number of transfer pricing disputes globally, quick resolutions are critical to build investor confidence,” said industry body FICCI,....>


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Vodafone wins Rs 3,200cr tax case

< Sanjay Tolia, leader, transfer pricing at PwC India, said, "It is a welcome judgment as the transaction of issue of shares by Vodafone was nothing but a capital account transaction, and consequently the share premium, if any, ought to be capital receipt. The transfer pricing provisions permit the transaction to be re-quantified but not to be re-characterized. Hence, there was no question of the transaction resulting in 'income' taxable in India. The judgment will not only serve as a precedent in the legal arena but will also lend the much needed boost to foreign investors."

On August 21, 2008, Vodafone India had issued 2,89,224 equity shares of Rs 10 each at a premium of Rs 8,500 per share. However, the transfer pricing officer revalued the shares at Rs 53,775 per share. Based on arm's length pricing adjustment, the tax department held a total shortfall of Rs 1,308.91 crore to be a deemed loan given by Vodafone India to its holding company. Periodical interest income was also held chargeable to tax in the hands of Vodafone India.

Pranav Sayta, tax partner, EY India, said, "The verdict not only spells victory for Vodafone but also holds hope for other companies which are facing a similar dispute. One has to wait and see whether the tax department accepts this order or decides to appeal before the Supreme Court.">

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