WRT THE SENSATIONAL NEWS THAT HAS LATELY HIT THE HEAD LINES IN THE PRINT MEDIA - http://www.socialnews.biz/MarketsNewsInternational/SC_wants_1_for_handling_Vodafones_2_500_crore

COMMENTS:

THIS IS UNDOUBTEDLY A LANDMARK (!) DEVELOPMENT –THE LIKE OF WHICH ONE MIGHT NEVER EVER HEARD OF BEFORE.

WHAT CALLS FOR AN INTENSIVE DEBATE, WHICH IS MOST LIKELY TO ENSUE IN LEGAL CIRCLES, IS THIS::

WHATEVER BE THE COMPULSIONS, RIGHT OR WRONG, HOWSOEVER OVERWHELMIMNG THEY BE, IT REQUITERS TO BE INCISIVELY EXAMINED FROM THE POINT OF VIEW OF / /ON CONSIDERATIONS IMPINGING ETHICAL PRINCIPLES, ETC. - SUCH AS 'PROBITY' –BESIDES, OF COURSE, BASICALLY, THE CONSTITUTIONAL VAIFDITY OR PROPRIETY ,OR OTHERWISE OF THE PROPOSITION.

VSWAMINATHAN

Drafting of Contract Agreements And Tax Implications

http://www.taxguru.in/income-tax/proper-drafting-of-agreements-necessary-to-avoid-unnecessary-litigation-and-tax-liabilities.html

Read the article @above Link

v swaminathan Says:

April 21st, 2010 at 9:36 am

COMMENTS:

As has been rightly stressed, a proper drafting of any contract agreement deserves to be given the utmost importance; especially in a case where a foreign party’s concerns / interests are involved. There could be no two views on the basic proposition that, – extreme care and caution require to be devoted to the drafting of any contract agreement, having special regard to inter alia its tax, particularly income-tax, implications.

However, that is not the whole of the story; what follows is an attempt to explain:

1. Deficiencies in the drafting of income-tax legislation:

The concerned personnel of the government has to act with due diligence in discharging the most responsible and onerous task of the drafting of any enactment. They are expected to take the utmost care, so as to make doubly sure that the output draft is as complete, comprehensible and foolproof as humanly possible. But, in practice, such an ideal scenario, has by far remained a far cry.

The point made will be readily appreciated, even if one simply bears in mind the on going exercise, undertaken afresh, with regard to producing a simplified income-tax code. The reference is to the infamous DTC, which is a classic example of a recent origin. It is more or less an admitted position that, – the draft code contains several careless omissions and commissions. Those appertain to certain crucial aspects, having far reaching ramifications. It is a tragedy that the so-dubbed simplified code,- that too soon after its release to the public with all fanfare and publicity,- came to be uniformly criticized in legal circles. The general grievance is that the draft code suffers from glaring and copious deficiencies. And, in its wake, perforce, the government had to undertake a fresh exercise in the matter, which is still on the anvil. It is anybody’s guess as to how many valuable man-years had been already spent, or are going to be spent, and, at what cost to the exchequer. One might have to wait for quite long for getting to know what the CAG has to say on the enormous waste of public monies, on the task of simplifying the law the government has been grappling with for years, nay decades now.

2. Form vs Substance:

Conventionally, based on sound principles, for examining the tax implications, it was invariably, except in certain extreme but compelling situations (e.g. tax evasion), the – ‘FORM’ of a transaction, – as mainly evidenced by the related contract agreement, – not its ‘SUBSTANCE’,- that used to be considered as the primary guiding factor / criterion. Be that as it may, in recent years, there has been a notable change or departure from that convention. Of the many cases since reported, it is the case of ‘Vodafone’ that stands out as the leading case on this aspect.

Briefly stating, therefore, given the above scenario, it is not just the utmost care taken in the drafting of – the ‘form’ of – a contract agreement that can be safely assumed to be solely and exclusively instrumental for anyone to reach a definitive conclusion in any such matter.

vswaminathan

KARMA X YOGA

ARE 'KARMA' AND 'YOGA' TWO DIFFERENT CONCEPTS , UNRELATED TO EACH OTHER! OR ARE THEY INTRICATELY CONNECTED AND INTERWOVEN!
ONE OFTEN HEARS ABOUT THOUGHTLESS STATE OF MIND - DESCRIBED AS 'YOGA' - A MEANS TO ACHIEVE INNER PEACE, AND SELF REALISATION - REALISATION IN TURN OF THE 'ATMAN' OR THE 'SUPREME TRUTH' AS OPPOSED TO 'BODY' , THE PHYSICAL THING WHICH IS PERCEIVED WITH NO DIFFICULTY OR NO SPECIAL TRAINING OR EXERTION, BUT BASICALLY MORTAL, SHORTLIVED
THE EXPRESSION - 'KARMA YOGA' - IS IT A PARADOX, NOT COMPATIBLE, AND CANNOT GO ALONG WITH EACH OTHER
HOW ONE CAN PRACTICE OR PERFORM 'KARMA' WITHOUT 'THOUGHT' OR IN A THUGHTLESS STATE OF MIND!
THOUGHTS - GOOD X BAD - AGAIN RELATIVE IN THE REALM OF RELATIITY!
ARE ONLY GOOD THOUGHTS PERMISSIBLE ; IF SO, WHAT IS IT?
'SWADHARMA' - WHY IMPORTANT FOR SALVATION?
A DEVIATION FROM 'SWADHARMA' - RTHE EVEL OR UHDESIRABLE CONSEQUENCES!

A MIRROR FOR MIND OR SOUL

One's Nature Given Mind perforce breeds and produces one's own / self-centred thoughts.
Placing oneself in front of a mirror , what can be viewed is none other than one's physical self-erasing body/the frame- not the mind or soul - though embodied in self.
Introspection is the Mirror or device which alone can enanle one to have a look at and realise own mind or soul.
Realising own mind or soul demands, rather can be achiebed only through a strenuous , earnest, persistent, and uninterrupted - more often than not, a life long practice- cryptically called -'Yoga'-

OUTDATED TERMS - LEGAL, CONVENTIONAL OR OTHERWISE

IT IS A VERY THIN LINE OF DISTINTION BETWEEN - ACTION X INACTION

WHILE THERE COULD BE EXCUSES SUCH AS, 'REASONABLE CAUSE' FOR 'INACTION', NONE FOR 'ACTION'

'MENS REA' X 'REASONABLE CAUSE'

'CIVIL' X 'CRIMINAL'

'RIGHT' X 'WRONG' (LEFT)

'OBJECTIVE' X 'SUBJECRTIVE'

'SELF-INTEREST' X 'PUBLIC INTEREST'

OUTDATED ARE:

'AFFIDAVIT' - 'STATE ON OATH AND DECLARE' - LOST LEGAL SINIFICANCE AND CONSEQUENCE

'TO THE BEST OF MY KNOWLEDGE AND BELIEF' - WHAT THE TERM REALLY SEEKS TO CONVEY - IF AT ALL ANYTHING!

ABOVE ARE POINTS FOR ONE TO PONDER IN-DEPTH, DEPENDING ON ONE'S OWN 'IQ'

FM's SELECTIVE ALERTNESS

BL 20-02-08
Opinion - Letters
Tax on bank transactions
Please refer to the article “What about the aam aurat’s Budget expectations?” (Business Line, February 18). In the report, it is stated: “As it is, he has to pay professional tax, cash handling tax for taking out our own money from the bank……”
The author has missed a few crucial points: Banking Cash Transaction Tax (BCTT) does not apply to a savings bank account; BCTT applies only to withdrawals by individuals and Hindu Undivided Families (HUF) of more than Rs 50,000 per day from any current account;
In the case of other entities, it applies only if the withdrawal is more than Rs 1 lakh per day from any current account; it is most unlikely that any individual will withdraw more than Rs 50,000 per day from his/her current account on any day (leave alone on several days a month). In fairness, your correspondent should have reported accurately the scope and application of the tax.
Rajul Awasthi Officer on Special Duty to the Finance Minister New Delhi
COMMENT----- Original Message -----
To: blfeedback@thehindu.co.in
Sent: Wednesday, February 20, 2008 10:02 AM
Subject: "Tax on bank transactions..."
GOOD SHOW!!!
TO WHOMSOEVER IT MAY CONCERN
IN ALL FAIRNESS, IT WOULD BE DESIRBLE AND OF GREATER SERVICE TO THE COMMON GOOD, SHOULD LIKE ALERTNESS, AND PERHAPS, MORE RECEPTIVE AND RESPONSIVE ATTITUDE, BE EVINCED, BY THE CONCERNED PERSONS TOWARDS OTHER NO-LESS PRESSING MATTERS OF VITAL IMPORTANCE (???), FROM ALL POINTS OF VIEW!!!
V Swaminathan
(vswami@vsnl.com)

BL – 07-02-08

Short sales tax angle: CBDT wants system in place first
Contra point
Some tax experts, however, point out that there are taxation issues on which clarity from the tax department could make a huge difference, especially for the foreign institutional investors.
K.R.Srivats
New Delhi, Feb 6
The Central Board of Direct Taxes (CBDT) wants to clarify or spell out the tax implications of short-selling and securities lending and borrowing by institutional investors only after a full-fledged securities lending and borrowing (SLB) scheme is put in place by the stock exchanges.
The Securities and Exchange Board of India had in December last year said that the SLB scheme would be within the overall framework of “Securities Lending Scheme 1997.”
Although institutional short-selling was to start on February 1, 2008, it has been delayed reportedly on account of want of clarification from the CBDT on certain taxation aspects.
When contacted, official sources in the revenue department said that the CBDT could clarify or spell out the tax implications only after the SLB is put in place.
“How can one decide on the tax implications unless one knows for sure how the borrowing and lending scheme is proposed to be played out. Taxation is only incidental and subsequent issue. That cannot be a reason why an independent regulatory body should hold the implementation of institutional short selling,” sources said.
Some tax experts, however, point out that there are taxation issues on which clarity from the tax department could make a huge difference especially for the foreign institutional investors.
“FIIs would like clarity on whether short-selling and the profits made from them would be treated as trading profits or capital gains. It would be big issue for entities, say from Hong Kong, which do not enjoy treaty protection. Any decision to treat them as trading profits would imply a tax rate of 42 per cent. Moreover, there is also the risk that their entire income (not only from short selling) would be treated as trading profits,” Mr Hiresh Wadhwani, Partner (Financial Services), Ernst & Young, told Business Line.
Initially, contracts with a tenure of seven trading days are proposed to be introduced. Apart from the characterisation of income (trading profits or capital gains), sources said that there are taxation issues such as levy of securities transaction tax on the lending and borrowing side of the transactions. There is also an issue whether short selling would be considered as “speculative” transactions by the tax department.
“Whether STT is applicable on borrowing of securities or not should be spelt out,” a tax expert said, although many felt that STT will not apply for lending and borrowing of securities even if these are done through the stock exchange platforms.Related Stories:SEBI willing to review share margin requirement systemSEBI firm on short-selling

COMMENT:

To: blfeedback@thehindu.co.in
Sent: Thursday, February 07, 2008 8:34 AM

Contra point
Some tax experts, however, point out that there are taxation issues on which clarity from the tax department could make a huge difference, especially for the foreign institutional investors.

IS NOT THE LEGAL POSITION ON THE SUBJECT MATTER (TAX CONSEQUENCES ON 'TRANSFER' OF STOCK) ALREADY MUDDLED UP TO THE MAXIMUM EXTENT HUMANLY POSSIBLE, BY REASON OF THE DEPARTMENTAL CIRCULARS HITHERTO ISSUED IN THE RECENT TIMES?

DOES NOT THE EXPECTATION OF, OR DEMAND FOR, ANY CLARITY FROM THE TAX DEPARMENT ON THE 'POINT' BEAR TESTIMONY TO THE IMMATURITY IN THE THINKING BEHIND??

BE THAT AS IT SHOULD, IS IT NOT A MATTER IN WHICH THE GOVERNMENT IS LEFT WITH RATHER A HOBSON'S CHOICE (!) -'BETWEEN THE DEVIL AND THE DEEP BLUE SEA'???

WHY THERE IS SCOPE FOR THE TAX EXPERTS TO AT ALL BONAFIDE BELIEVE THAT THE PRESENT PROVISIONS OF THE INCOME-TAX LAW ARE NOT CLEAR ENOUGH, GIVING RISE TO NEED FOR ANY CLARIFICATION WHATSOEVER ON THE 'POINT' ????

V Swaminathan
(vswami@vsnl.com)