holding company

Ministry of Corporate Affairs, Government of India (MCA), has on 8 February 2011 issued directions through General Circular No. 2/2011 and Press Note 3/2011 exempting holding companies from attaching specified particulars of its subsidiary companies Full Article

Praxair Pacific Limited (PPL ), a company incorporated in Mauritius, proposes to transfer its 74% equity stake in Jindal Praxair Oxygen Company Private Limited (JPOCPL) to its wholly owned subsidiary in India, Praxair India Private Limited (Praxair India). The consideration for the proposed transfer is stated to be determined on the basis of cost, unless a higher consideration is required under the pricing guidelines prescribed by the Reserve Bank of India as applicable .. Full Article

Multinational corporations have been carrying on business in India through private limited companies (‘Indian Companies’) set up by them under the Companies Act, 1956 (‘the Act’). Often, such private limited companies are not subsidiaries of the principal holding company (which has public shareholding), but are step-down subsidiaries of subsidiary companies of such principal holding companies. Full Article

While RBI played down the issue, it emerged that Bank of Baroda (BoB) had an exposure of around $200 million (Rs 928 crore at Friday’s rates) to Dubai World, a senior bank executive said. “The amount is due for repayment only after 2011. It is paying interest and there are no overdues. So, we have absolutely no immediate concern,” a senior bank executive said. Full Article

Interest paid on funds borrowed for acquiring controlling stake in a company will not be exempt from tax. The Income Tax Appellate Tribunal (ITAT) has ruled that such expenditure for investing in shares of a company cannot be exempted, since it has not been incurred ‘wholly and exclusively’ for the purpose of earning dividend income. Full Article

This article summarizes a recent ruling of the Mumbai Income Tax Appellate Tribunal (ITAT) [2009-TIOL-707-ITAT-MUM] in the case of Cipla Investments Ltd. (Taxpayer) on taxability of waiver of loan. The ITAT held that since the loan received was on capital account, its subsequent waiver too was on capital account. Hence, the loan waived was not liable to be taxed as profits and gains from its business (business income) under the provisions of the Indian Tax Law (ITL). The.. Full Article

CASE LAW DETAILS Decided by: Delhi High Court, In The case of: The Commissioner of Income Tax (Appellant) Vs. M/s.Papilion Investments Pvt. Ltd.  (Respondent), Appeal No.: 4 SOT 304 (Mumbai), Decided on: 28Th August 2009. SUMMARY OF CASE LAW S. 47 (v) provides that a transfer of a capital asset by a subsidiary company to [...] Full Article

The new draft Direct Taxes Code proposes to tax capital gains as regular income at normal tax rates, thereby removing the benefits of lower rates for long-term capital gains on sale of shares. Full Article