BL Shell AND Shares Story - through the lens of a CA

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LATEST BUT NOT THE LAST EPISODE IN THE MEGA SERIAL ?!

Sanofi transaction not taxable in India: Court

In a clear win for French pharma major Sanofi, the Andhra Pradesh High Court has ruled that the offshore transaction that led to it gaining control of Hyderabad-based company Shantha Biotechnics was not taxable in India. »

 

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Taxing time for Shell in India 

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What lends credence to the suspicion of the I-T department in the context of Shell and Vodafone is these two have had a long presence in India and their operations are hugely profitable.

It is not as if the allotment of shares at huge discount is in consideration of them nursing the Indian arm assiduously.

On the contrary, they get to take a luscious bite into a fully ripe fruit, only to consolidate their grip on the venture.

The I-T authorities, instead of being pilloried for not knowing the difference between capital and revenue receipts, must be hailed for giving a wake-up call.

When such a small investment gets a disproportionate share of the equity pie, foreign companies would be getting a disproportionate share of profits, for which lesser mortals have to pay a premium.

Key words-wake-up call , whistle blower....

Aside:

In a lighter vein>

Daily, at a giant size factory, gatekeeper- an old man, was being unfailingly heard blowing his whistle loudly and continuously. that was happening sharp after lunch time break. Complained against, and annoyed, management told the in-charge to go and check, and reprimand. The latter went, and to his dismay, found the oldie sitting on his rickety chair in a corner, having his deep after -lunch siesta ; and whistle -blowing was being caused by his heavy snoring . Having had been a faithful and devoted servant all these years, known for his un-abounding loyalty, as a gesture of good will, he was excused; but there being no other go, was allowed to continue undisturbed!

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@Growth premium to risk premium

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Tax Collection Drive:

That’s not all. Stung by lower tax collection, the income tax department has seen heightened action lately. There has been a spate of notices on corporate houses lately. Interestingly, most of the large ones are on multi-national corporations. Even as Vodafone was recovering from one alleged tax offence, it finds itself staring at another one. Similar alleged tax offences have been slapped on Shell, IBM and Nokia just to name a few. While the veracity of these notices are still not clear, it has definitely made the foreign investors a lot more shaky.

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