Blog Posts
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Yet Another Controversy over Section 14A
[Posted by Shantanu Naravane] Earlier posts here had discussed the decision of a Special Bench of the Bombay ITAT in Daga Capital and the possible inequities that could result from its interpretation of section 14A. The most significant one was that expenditure could be disallowed even if no nexus was established between the expenditure and…
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A Round-up on Recent SEBI Reforms
[Posted by Umakanth Varottil] Earlier this week, SEBI announced a slew of capital market reforms. This comes in the wake of recovery in the markets as well as the Government’s intention to undertake disinvestments in public sector undertakings (PSU). The principal reforms and their impact are discussed below. Small and Medium Enterprises (SMEs)SEBI has established…
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Auxiliary Activities and Permanent Establishments
[Posted by V. Niranjan] We have discussed on several occasions the extent to which a liaison office of an MNC is taxed, and more generally, the concept of a “permanent establishment”. A series of decisions in 2009 has introduced some clarity in the analysis of what constitutes a permanent establishment and what does not. To…
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Law Firms and Joint Ventures
[Posted by Umakanth Varottil] A few months ago, we had posted about a paper by Professor Jayanth Krishnan on issues that revolve around the opening up of the Indian legal sector to foreign law firms. He has now released the results of another interesting piece of research titled The Joint Law Venture: A Pilot Study…
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E-Voting in Indian Companies
[Posted by Umakanth Varottil] Public (or retail) shareholders in a company usually exhibit traits that result in “collective action problems”. This refers to the difficulties that arise in achieving consensus among a diffused set of shareholders who do not play an active role in the company. These problems are exacerbated by the heterogeneity of interests…
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Legal Risks and Financial Sector; Capital Controls
[Posted by Umakanth Varottil] Recent developments in the financial sector have witnessed a sea-change in the nature of legal risks faced by banks and financial institutions. Regulators, banks and financial institutions, as well as their legal advisors (both in-house and external) are required to constantly keep pace with the change. In that context, a recent…
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United States Supreme Court considers a corporation’s ‘principal place of business’
[Posted by Shantanu Naravane] An important question, with significant implications for contemporary corporate law theory will be heard by the United States Supreme Court on November 10. The matter in question is Hertz Corp. V. Friend (08-1107), which poses the question of which State can be considered to be a corporation’s ‘principal place of business’.…
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Changing Advertising Practices in India – The End of “Puffery”?
[Posted by V. Niranjan] The Government’s proposed “Advertising Code” for food and health products is an interesting development , particularly in light of developments in India over the past three years or so on the subject. This blog has discussed emerging trends in India on the norms governing advertising practices. To briefly recapitulate, the law…
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Powers of SEBI and SEC Compared
[Posted by Umakanth Varottil] In his column in the Business Standard this week, our guest contributor Somasekhar Sundaresan argues that, if one were to go by the rule book, SEBI has greater powers than the SEC. He lists out several significant powers of SEBI that can be exercised without intervention of the court. Here are…
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‘Business connection’, ‘Attribution’ and the withdrawal of Circular 23 of 1969
[Posted by Mihir Naniwadekar] Through Circular No. 7 of 2009, the CBDT has withdrawn Circular No. 23 of 1969 (“Circular 23”). Circular 23 explained the position relating to ‘business connection’ under Section 9 of the Income Tax Act, 1961. The Circular was relied upon in the arguments in the Morgan Stanley case before the Supreme…