The National Law School of India Review will be holding its 2nd annual Symposium on 18th – 19th April, 2009. The theme of the Symposium is “Towards Unification: Perspectives on Investment and Commercial Arbitration”; and it is intended to cover international commercial arbitration as well as investment treaty arbitration. According to the organizers: This year, the NLSIR Symposium looks...
NCLT and NTT: Questions of “Intrinsic Judicial Functions”
Recently, a Constitution Bench of the Supreme Court (headed by Balakrishnan C.J.) finished hearing arguments on the constitutionality of the proposed National Company Law Tribunal (NCLT), and judgment has been reserved. The matter arose out of an appeal against a Madras High Court decision in R. Gandhi v. Union of India. The principal challenge to the constitutionality of the NCLT is based on the...
Non-Discrimination: Protecting foreign-owned subsidiaries
A recent decision of the Pune Bench of the Income Tax Appellate Tribunal in Daimler Chrysler v. DCIT deals with several important issues. One of these was whether the provisions of a Double Taxation Avoidance Agreement would apply in the absence of double taxation. The Tribunal held that given the role DTAAs play in modern economies, the incidence of double taxation cannot be a prerequisite...
Interim Budget: A Brief Overview
A few days ago, the Union Government announced the Interim Budget 2009-2010. This post seeks to briefly highlight some of the important issues it raises. The long title of what is usually the year’s-most-awaited legislation – the Finance Bill – set the tone of the budget. The Finance Bill, 2009, is stated to be a bill “to continue the existing rates of income-tax.” That may well sum up the...
Supreme Court rejects Vodafone’s appeal
According to a report in the Economic Times, the Supreme Court has refused to admit Vodafone’s SLP against the order of the Bombay High Court in the Vodafone tax matter. The Court has asked Vodafone to respond to the show cause notice issued by the Revenue. It now appears that the battle will reach the Supreme Court – if at all – only after a long time. The judgment of the Bombay High Court has...
Clifford Chance v. DCIT: Territorial nexus in international taxation
A recent decision of the Bombay High Court in Clifford Chance v. DCIT revisits interesting legal issues connected to the taxation of non-residents under Section 9 of the Income Tax Act, 1961. Section 9(1) deals with “income deemed to accrue or arise in India”. The relevant part of the Section read – prior to 2007 – as follows: Section 9(1). The following incomes shall be deemed to accrue or arise...
Companies Bill, 2008: No advisory services by auditors
One of the important measures taken in the Companies Bill, 2008 is to prevent Chartered Accountants from offering actuarial, advisory and management services to companies which have engaged them as statutory auditors. Section 127 of the Bill provides: An auditor appointed under this Act shall provide the company only such other services as are approved by the Board of Directors or the audit...
Supreme Court on ‘Allotment of Shares’ and ‘Issue of Bonus Shares’
In a recent judgment (Khoday Distilleries v. CIT, Civil Appeal 6654/2008, judgment of 14 November 2008), the Supreme Court explained some important corporate law concepts. The issues before the Supreme Court arose out of a matter under the Gift Tax Act, 1958; and the Supreme Court had to elaborate upon the nature of an allotment of rights issue. In the facts of the case, twenty out of the twenty...
The grounds for lifting the Corporate Veil
In an earlier post, I looked at a recent judgment of the England and Wales High Court by Justice Munby in Hashem v. Shayif. It appears from the judgment that the only case in which the corporate veil could be lifted was where the company was a façade. In order to support this conclusion, Justice Munby relied on several cases, but most prominently on the decision of the Court of Appeals in Adams v...
British decision on lifting the corporate veil: Clarity or more confusion?
Considerable difficulty arises in trying to find a coherent set of principles to govern issues related to ‘lifting the corporate veil’. Courts have relied upon several factors in deciding whether to ignore the existence of the corporate entity – ‘fraud’ or ‘sham’, ‘single economic entity’, ‘agency’, ‘tax evasion’, ‘determination of nationality’ etc. In the early 1990s, in a landmark...
Recent Comments