The Securities and Exchange Board of India has slapped a fine of Rs. 15 lakh to India bulls Securities. As per SEBI, the stock brokers trading in F& O contracts at NSE were buying and selling almost equal quantities of contracts within the day and such buy or sell was synchronized in nature.

Takeover Code amended –

SEBI has amended its take-over regulations by inserting a regulation (29A) providing relaxation from the strict compliance of certain clauses under chapter III of the regulations to companies whose boards were superseded by government. Chapter III relates to the timing, pricing and size of open offers by acquirer companies.

Bonus issue
In case of bonus issue of shares, SEBI has decided lowering timelines for their completion, from six months to 15 days, in cases where no shareholder approval is required.

Preferential Issue of Warrants
In case of preferential issue of warrants to promoters, the up-front payment has been raised to 25 per cent, from 10 per cent earlier.

Draft Red Herring Prospectus-validity
The validity of SEBI’s observations to a public issue has also been stretched to 12 months, from the earlier three months

Announcement of price band

At present, the floor price or price band in an initial public offer through the book building process is required to be disclosed in the Red Herring Prospectus registered with the Registrar of Companies, before the issue opening date. The amended DIP Guidelines permit the issuer making an initial public offer to announce the floor price or price band after the date of registration of the Red Herring
Prospectus with the Registrar of Companies, at least two working days before the issue opening date.

Differential Right Securities

The DIP Guidelines have now been amended to provide for the policy for considering relaxation from strict enforcement of requirements of rule 19(2) (b) of SCRR in case of proposal for listing of following securities by a listed issuer:-

• Equity shares with differential rights as to dividend, voting or otherwise, offered through rights or bonus issue.
• Warrants issued along with Non Convertible Debentures through Qualified Institutions Placement.

It is an accepted legal principle that the law has to be read harmoniously so as to avoid contradictions within legislation. Keeping this principle in view, the meaning of the term 'used outside India' has to be understood in the context of the characteristics of a particular category of service as mentioned in sub-rule (1) of rule 3.

For example

• under Architect service (a Category I service [Rule 3(1)(i)], even if an Indian architect prepares a design sitting in India for a property located in U.K. and hands it over to the owner of such property having his business and residence in India, it would have to be presumed that service has been used outside India
• if an Indian event manager (a Category II service [Rule 3(1)(ii)] arranges a seminar for an Indian company in U.K. the service has to be treated to have been used outside India because the place of performance is U.K. even though the benefit of such a seminar may flow back to the employees serving the company in India.

It is clarified that screening of a movie is not a taxable service except where the distributor leases out the theater and the theater owner gets a fixed rent. In such a case, the service provided by the theater owner would be categorized as 'Renting of immovable property for furtherance of business or commerce' and the theater owner would be liable to pay tax on the rent received from the distributor. The facts of each case and the terms of contract must be examined before a view is taken.

The Supreme Court has dismissed two appeals by the Kerala Government demanding sales tax on lottery tickets. According to the latest judgment, the tickets are not goods for the purpose of sales tax, the court held that a lottery ticket had no value by itself. It is a mere piece of paper. Its value lies in the fact that it represents a chance or a right to a conditional benefit of winning a prize of a greater value than the consideration paid. Earlier rulings like that of the Constitution bench in Sunrise Associates vs. Govt. of Delhi were followed to reject the government's contention. The judgment emphasized that the claim of the purchaser of a lottery ticket is excluded from the definition of 'goods' under the Sales of Goods Act and the sales tax laws of the states.

Where the payment was received by the assessee for ceasing and desisting from carrying on the business of the manufacture and sale of confectionery products in India for a period of 10 years, the receipt constituted a capital receipt not chargeable to tax.

Finance Minister Pranab Mukherjee has given corporate India a very big incentive to move into SEZs. He has allowed companies to keep the tax rebate earned on exports from SEZs separate from a similar rebate earned from units in domestic tariff area (DTAs) - the rest of the country. Mukherjee has promised to bring changes to Section 10AA of the Income Tax Act for this purpose. "This has resulted in discriminatory treatment of assesses having units located both in SEZ and DTA vis-à-vis
assesses having units located only within the SEZs.

The income-tax department has sent letters to the government of Mauritius seeking information on the nature of the business carried out by the Mauritius-based subsidiaries through which Hutchison International had sold its stake in Indian telecom major Hutchison-Essar to Vodafone.

The tax authority in the US has now made disclosure of offshore accounts mandatory even for non-resident individuals or corporates who have significant business in the US. This has ramifications for Indians working or having business interest in the US and also the subsidiaries of Indian companies registered there. The expanded regulation requires certain non-residents to declare their 'financial account' in a foreign country if the aggregate value of these accounts exceeds $10,000 (about Rs.5, 00,000) at any time during the calendar year.

When an expenditure payable is waived subsequently, resulting in refund or benefit to the assessee, it is taxable as income. The expenditure might have been paid out and hence refunded or the expenditure is recorded in the books as payable and allowed as a deduction previously - on waiver, would be covered by Section 41(1) of the Act. The condition for applying Section 41(1) is the allowance of deduction earlier and subjecting it to tax later on its waiver. Explanation 1 to Section 41(1) covers even unilateral transfer of liability by write off in the books of account by the taxpayer.