rnm alert vol lxx october 2014 alert vol lxx...issue no. 70: october, 2014 page 3 of 20 direct tax...

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All Rights of Circulation restricted www.rnm.in ISSUE NO.70 OCTOBER, 2014 RNM ALERT Thinking of the Bottom Line – Think of Us Dear Readers, We are pleased to inform you that the firm, R.N. Marwah & Company earlier registered under the Indian Partnership Act, 1937 has been converted into a Limited Liability Partnership (LLP) under the Limited Liability Partnership Act, 2008 under the name and style of R N Marwah & Co LLP. The Firm Registration Number (FRN) issued by the Institute of Chartered Accountants of India is now 001211N/ N500019 in place of the earlier FRN of 001211N. We feel that this change, will help the practice retain its core values of integrity, hard work and independence in the new age and at the same time enable a more rapid growth. Indirect tax collections increased by 7.5% YoY in October 2014 to US$ 740 Mn. For the period April – October 2014, the indirect tax revenue grew by 5.6% YoY to US$ 475 mn. Revenue from custom duty and service tax increased by 7.5% YoY to US$ 1,769 mn and 10.9% YoY to US$ 1,511 mn while that from central excise declined by 1.2% YoY to US$1,472 mn. Industrial Production (IIP) for the month of September 2014 grew by 2.5% YoY against a growth of 2.7% YoY in September 2013 and a revised growth rate of 0.5% YoY in August 2014. During the cumulative period of April-September 2014, IIP grew by 2.8% YoY as against a decline of 0.5% YoY in corresponding period last fiscal. The Ministry of Corporate Affairs has deferred the requirement of auditors to report on the existence of adequate financial control systems and its operating effectiveness to the financial year commencing on or after April 1, 2015. On a separate note, overseas investments in residential units which was re-opened by the RBI recently has again started with full force, moreso due to the slight correction in property prices in high target destinations like prime central London. Regards, CA U.N. Marwah For and behalf of the RNM Alert Editorial Board

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Page 1: RNM Alert VOL LXX OCTOBER 2014 Alert VOL LXX...Issue No. 70: October, 2014 Page 3 of 20 DIRECT TAX DIRECT TAX S e c u r i t i e Company Law Updates -Circular - CLSS, 2014 – Clarification

All Rights of Circulation restricted

www.rnm.in

ISSUE NO.70 OCTOBER, 2014

RNM ALERT

Thinking of the Bottom Line – Think of Us

Dear Readers, We are pleased to inform you that the firm, R.N. Marwah & Company earlier registered under the Indian Partnership Act, 1937 has been converted into a Limited Liability Partnership (LLP) under the Limited Liability Partnership Act, 2008 under the name and style of R N Marwah & Co LLP. The Firm Registration Number (FRN) issued by the Institute of Chartered Accountants of India is now 001211N/

N500019 in place of the earlier FRN of 001211N. We feel that this change, will help the practice retain its core values of integrity, hard work and independence in the new age and at the same time enable a more rapid growth. Indirect tax collections increased by 7.5% YoY in October 2014 to US$ 740 Mn. For the period April – October 2014, the indirect tax revenue grew by 5.6% YoY to US$ 475 mn. Revenue from custom duty and service tax increased by 7.5% YoY to US$ 1,769 mn and 10.9% YoY to US$ 1,511 mn while that from central excise declined by 1.2% YoY to US$1,472 mn. Industrial Production (IIP) for the month of September 2014 grew by 2.5% YoY against a growth of 2.7% YoY in September 2013 and a revised growth rate of 0.5% YoY in August 2014. During the cumulative period of April-September 2014, IIP grew by 2.8% YoY as against a decline of 0.5% YoY in corresponding period last fiscal. The Ministry of Corporate Affairs has deferred the requirement of auditors to report on the existence of adequate financial control systems and its operating effectiveness to the financial year commencing on or after April 1, 2015. On a separate note, overseas investments in residential units which was re-opened by the RBI recently has again started with full force, moreso due to the slight correction in property prices in high target destinations like prime central London.

Regards, CA U.N. Marwah

For and behalf of the RNM Alert Editorial Board

RNM ALERT

Page 2: RNM Alert VOL LXX OCTOBER 2014 Alert VOL LXX...Issue No. 70: October, 2014 Page 3 of 20 DIRECT TAX DIRECT TAX S e c u r i t i e Company Law Updates -Circular - CLSS, 2014 – Clarification

Issue No. 70: October, 2014 Page 2 of 20

CONTENTS

Direct Tax

- Case Laws - Deemed Dividend 4 - Agriculture Income 4 - Expenditure incurred in relation to exempt Income 4 - Capital Gain 4 - Transfer Pricing 4 - Minimum Alternate Tax 4 - Procedure for Assessment 5 - Tax Deduction at Source 5 - Miscellaneous 5 - Penalties 5-6

Indirect Tax Service Tax

- Case Laws - Assess couldn’t take cenvat credit on basis of Xerox copy of invoice 7 - Billing and accounting services provided to electricity Cos. are ‘Business Support Service’ 7 - Freight & clearance charges not includible in value of C&F agent’s services 7 - HC directs authorities to grant exemption on supply of material on work contract 7 - No denial of interest on delay refund of deposits due to pendency of appeal 7 - No penalty if there was mass unawareness in service providers about taxability 8 - No penalty on basis of confessional statement of assessee 8 - No reversal of credit on excess duty paid by supplier if factory owned by supplier 8 - Steel wire rope, MS plates used directly/indirectly in manufacturers of aluminum articles 8 - Supreme court admits against DHC’s verdict striking down service tax valuation rule 5(1) 8 - Tobacco board was liable to ST as it couldn’t be deemed as public authority 9

Page 3: RNM Alert VOL LXX OCTOBER 2014 Alert VOL LXX...Issue No. 70: October, 2014 Page 3 of 20 DIRECT TAX DIRECT TAX S e c u r i t i e Company Law Updates -Circular - CLSS, 2014 – Clarification

Issue No. 70: October, 2014 Page 3 of 20

DIRECT TAX DIRECT TAX

Securitie

Company Law Updates - Circular

- CLSS, 2014 – Clarification u/s 164(2) of Cos. Act, 2013 10 - CLSS – 2014 10 - Clarification on matters relating to CFS 10 - Right of person other than retiring director to stand for directorship 10 - Amendment of Cos. Rules 2014 11 - Amendment of Cos. Rules, 2014 11

RBI Updates - Circular

FEMA, 1999 Foreign Exch. Rules, 2000 – compounding of contraventions 12-13

Corporate Finance - Latest News

- Private Equity 14-15 - Mergers & Acquisition 16-17 - Venture Capital 18-19

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Issue No. 70: October, 2014 Page 4 of 20

DIRECT TAX Ø Case Laws Deemed Dividend Sec. 2(22)(e) - Deemed dividend applies only where there is ‘actual payment’ & not on transaction in kind. For invoking provisions of Section 2(22)(e) there should be actual payment, existence of Reserves at the time of making payment. Credit sale is not ‘loan’ or ‘advance’ for purpose of Sec.2(22)(e). [Source: Parag Desai v. Addl. CIT (ITA 488/Ind/2013)]

Agricultural Income Sec. 2(1A) - Gains from sale of agricultural land is exempt even though purchaser intends to use the land for commercial purposes. [Source: DCIT vs. M. Kalyan Chakravarthy, ITA.No.729/Hyd/2013] Expenditure incurred in relation to exempt income Sec. 14A - No disallowance u/s 14A & Rule 8D can be made towards exempt income earned on strategic investments. Strategic investment has to be excluded for the purpose of arriving at disallowance under Rule 8D(iii). [Source: Interglobe Enterprises Ltd. vs. DCIT, ITA No.1580/Del/2013]

Capital Gain Sec. 50C - AO cannot straightaway adopt stamp duty value as consideration for capital gains but must offer assessee benefit of reference to DVO for valuation. [Source: ITO vs. M/s. Onkarmal Kajaria Family  Trust, I.T.A No.1065/Kol/2011]

Transfer Pricing Sec. 92(1) - TP adjustment cannot be made on issue of shares at a price lower than ALP or FMV. [Source: Vodafone India Services Pvt. Ltd vs. UOI (WRIT PETITION NO.871 OF 2014) (Bombay High Court) dated 10.10.2014]

Sec. 92CA - TPO cannot question commercial expediency of payment to AE once RBI approval received for the same. RBI approval to a transaction implies it is at arms' length price. [Source: DCIT v/s Owens Corning Industries Pvt. Ltd., 2014 (10) TMI 651 – ITAT Hyderabad]

Sec. 92C – CBDT keeps tolerable limit for ALP unchanged for Assessment Year 2014-15. [Source: Notification No. 45/2014 [F.NO.500/1/2014-APA-II]/SO 2478(E), DATED 23-9-2014 ]

Minimum Alternate Tax Sec. 115JB -   AO can make adjustment to profit if books are not in accordance with established accounting principles.  [Source: Padinjarekara Agencies Pvt. Ltd vs. ACIT (ITAT Cochin), I.T.A. No. 375/Coch/2014]

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Issue No. 70: October, 2014 Page 5 of 20

Procedure of Assessment Sec. 132B - Expl 2 to S. 132B, though inserted w.e.f. 1.6.2013, is retrospective and seized cash cannot be adjusted against advance-tax liability. [Source: DCIT vs. Space Tower Pvt. Ltd., I.T.A .No.-2557/Del/2012] Sec. 143(2) – Omission of notice u/s 143(2) of the Act is not merely a procedural irregularity. Omission on the part of assessing authority to issue notice u/s 143(2) of the Act cannot be procedural irregularity and is not curable. Therefore, requirement of notice u/s 143(2) of the Act cannot be dispensed with. [Source: ITO vs. Shri Bhuvanesh Maheshwari, ITA No.326/Jodh/2013] Sec. 147 - The reasons must specifically indicate as to which material fact was not disclosed by the petitioner in the course of its original assessment. [Source: Global Signal Cables (I) Pvt. Ltd vs. DCIT (Delhi High Court), W.P(C) 747/2014]

Sec. 148 - AO can issue notice u/s 148 despite non expiry of time limit for issuing notice u/s 143(2). [Source: Malwinder Singh vs. ITO ( ITAT – Chandigarh), ITA No. 749/CHD/2012]

Tax Deducted at Source Sec. 194A – TDS is deductible on excess amount paid on Cancellation of Flat Purchase Agreement. [Source: ITO v/s M/s Beacon Projects Pvt. Ltd., ITA Nos. 754 & 755/Coch/2013]

Miscellaneous Sec. 244(1)(b) - Refund of Self-Assessment tax is also entitled to interest - The Tribunal held that a refund on account of self-assessment tax was also entitled to interest u/s 244A(1)(b). High Court also dismissed the appeal. [Source: CIT v/s M/s IOC Ltd., ITA No. 801 of 2012] Sec. 254(1) - ITAT cannot be precluded from handling any point which appertains to assessment even if it is raised for the first time. [Source: Pradeep G. Vora v/s ITO, ITA No.2187/Mum/2006]

Sec. 269SS – Sec. 269SS not violated in accepting Share application Money or deposit in current account in cash - Hon’ble Chandigarh Bench has in the case of M/s Eqbal Inn & Hotels Ltd. has held that Share Application Money or deposit in the current account cannot be included in the definition of deposit so as to trigger provisions of Sec. 269SS of the Income Tax Act, 1961. [Source: M/s Eqbal Inn & Hotels Ltd. v/s. The JCIT (ITAT Chandigarh), ITA No. 876 to 879/CHD/2013 ]

Penalty Sec. 271(1)(c) - Non-offering of stamp duty/DVO value as consideration for capital gains does not attract penalty if facts are on record.  The Tribunal finds that the case was not one of furnishing inaccurate particulars of income or of concealment in as much as there was a registered sale deed and the consideration was mentioned therein cannot be faulted. [Source: CIT v/s M/s Fortune Hotels & Estates Pvt. Ltd., ITA No. 1164 of 2012 ]

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Issue No. 70: October, 2014 Page 6 of 20

Sec. 271(1)(c) - Wrong claim for depreciation by showing a finance or loan transaction as a lease transaction attracts penalty. [Source: M/s Times Guaranty Ltd. vs. ACIT, ITA No. 1681/Mumbai/2007]

Sec. 271(1)(c) - Penalty u/s 271(1)(c) cannot be levied for mere non acceptance of explanation furnished by the assessee. [Source: Shri Kirtibhai K. Shroff vs. ITO (ITAT Ahmedabad), ITA No.342/Ahd/2011]

Sec. 271(1)(c) - Penalty u/s 271(1)(c) should not be levied on the amount which was voluntarily surrendered by the assessee during survey. [Source: ITO vs. M/s Indian & Overseas Trading Co. (ITAT Lucknow), ITA No.195/LKW/2011]

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Issue No. 70: October, 2014 Page 7 of 20

INDIRECT TAX Service Tax

Ø Case Law Assessee couldn’t take Cenvat credit on basis of xerox copy of invoice A photocopy of invoice cannot be recognised either as an original or duplicate or triplicate or quadruplicate; it is no document at all in terms of rules and, therefore, no credit can be taken on basis thereof [Source: CPRM Steels Ltd. v. Cust., Ex. & Serv. Tax Appellate Tribnl, Chennai [2014] 49 taxmann.com 155 (Madras)]

Billing and accounting services provided to electricity Cos are 'Business Support Services' Services provided by way of spot billing, maintaining accounts and Software development and implementation and maintenance to electricity companies/department is Business Support Services and not Business Auxiliary Services. [Source: Comm. of Cent. Ex. & Cust., Visakhapatnam-I v. Phoenix Solutions Ltd.[2014]49taxmann.com 378 (A.P.)] Freight and clearance charges not includible in value of C&F agent's services Freight and destination charges (in respect of clearance of goods at destination by foreign recipient) cannot, prima facie, be included in value of Clearing and Forwarding Agent's services and cannot be charged to tax [Source: Dimensions Logistics Services (P.) Ltd. v. Commissioner of Service Tax, Mumbai-II [2014] 49 taxmann.com 413 (Bombay)]

HC directs authorities to grant exemption on supply of material in work contract entered into by assessee Where a contract involves supply of services as well as supply of materials, adjudicating authority must consider exemption under Notification No. 12/2003-S.T. in respect of sale/deemed sale of goods [Source: S.K. Engineering Works v. Comm. of Cent Ex. & Service Tax [2014] 49 taxmann.com 421 (Allahabad)] No denial of interest on delayed refund of deposits due to pendency of appeal; HC grants interest at 15% Where assessee made deposit pending investigation and demand confirmed by department was ultimately set aside, assessee was entitled to refund of said deposit and in case of delay beyond 3 months in grant of refund, assessee would be entitled to interest at rate of 15% per annum. [Source: LSE Securities Ltd. v. Assistant Comm., Serv. Tax Division, Chandigarh [2014] 49 taxmann.com 305 (Punjab & Haryana)]

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No penalty if there was mass unawareness in service providers about taxability of certain services Where there was mass unawareness about liability to pay service tax and department had issued 200 notices to different service providers on same issue, there was no intention to evade service tax on part of assessee (in not paying service tax) and hence, penalties were not leviable [Source: H.M. Singh & Co. v. Commissioner of Central Excise, Customs & Service Tax, [2014] 49 taxmann.com 417 (Allahabad)] No penalty on basis of confessional statement of assessee if it was retracted very next day Once alleged statement made by assessee was retracted on next day itself with allegations of force and duress, onus to prove that said statement was voluntary shifted upon department and in absence of any such proof from department, confessional statement is not evidence to levy penalty. [Source: Vinod Kumar Sahadev v. Union of India [2014] 49 taxmann.com 380 (Delhi)]

No reversal of credit on excess duty paid by supplier if factory of supplier/recipient was owned by assessee Where supplier factories and recipient factories, both, belonged to assessee only, demand of Cenvat reversal from recipient factories on ground of excess duty payment by supplier factories, was dropped on undertaking from supplier factories that they would not claim refund of such excess duty [Source: Commissioner of Central Excise v. Cipla Ltd. [2014] 49 taxmann.com 416 (Bombay)] Steel wire rope, MS plates used directly/indirectly in manufacture of aluminium articles are eligible for credit Goods used directly or indirectly in manufacture of final product are eligible for credit; hence, for manufacturer of Aluminium Articles, Alfoc Power; Steel Wire rope; MS Plates and Welding electrodes; Oxygen Gas; Aluminium Welding wire; and PVC Pipes, etc. are eligible for credit [Source: Commissioner of Central Excise v. Customs,Excise & Service Tax Appellate Tribunal,Chennai, [2014] 49 taxmann.com 117 (Madras)] Supreme Court admits against Delhi High Court's verdict striking down Service Tax valuation Rule 5(1) Where Delhi High Court had held that rule 5(1) of Service Tax Valuation Rules providing for inclusion of value of expenditure or costs incurred by service provider was ultra vires and liable to be struck down, Supreme Court admitted appeal there against [Source: Union of India v. Intercontinental Consultants & Technocrats (P.) Ltd. [2014] 49 taxmann.com 520 (SC)]

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Tobacco Board was liable to ST as it couldn't be deemed as public authority for granting it ST exemption Tobacco Boards are, prima facie, liable to service tax on their activities and they cannot be regarded as 'public authority' performing 'public functions' within meaning of Circular No. 89/7/2006-S.T., dated 18-12-2006 [Source: Tobacco Board v. Comm. of Cust., Cent Ex & Service Tax, Guntur, [2014] 49 taxmann.com 420 (A. P.)]

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Issue No. 70: October, 2014 Page 10 of 20

COMPANY LAW UPDATES Ø Circular/Notification/Guidance Company Law Settlement Scheme, 2014 (CLSS-2014)-Clarification u/s 164 (2) of the Companies Act, 2013 Representations have been received from stakeholders seeking clarification as to whether immunity from disqualification of directors pursuant to clause (a) of sub-section (2) of section 164 of the Companies Act, 2013 will be applicable with respect to companies who have filed Balance Sheets and Annual Returns on or after 01/04/2014, but before coming into force of CLSS-2014 with effect from 15.08.2014 as contained in General Circular No. 34/2014 dated 12/08/2014. The matter has been examined and it is hereby clarified that in case of companies, who have filed their balance sheets and annual returns on or after 01/04/2014 but prior to launch of CLSS-2014, disqualification under clause (a) of sub-section (2) of section 164 of the Companies Act, 2013 shall apply only for prospective defaults, is any, by such companies. [Source: General Circular No. 41/2014 dated 15th October, 2014]

Company Law Settlement Scheme, 2014 (CLSS-2014) In continuation to the Ministry’s General Circular No. 34/2014 dated 12.08.2014 on the subject cited above, the Ministry has, on consideration of requests received from various stakeholders, has decided to extend the CLSS-2014 upto 15th November, 2014. [Source: General Circular No. 40/2014 dated 15th October, 2014]

Clarification on matters relating to Consolidated Financial Statement Government has received representations from stakeholders seeking clarifications on the manner of presentation of notes in Consolidated Financial Statement (CFS) to be prepared under Schedule III to the Companies Act, 2013 (Act). These representations have been examined in consultation with the institute of Chartered Accountants of India (ICAI) and it is clarified that Schedule III to the Act read with the applicable Accounting Standards does not envisage that a company while preparing its CFS merely repeats the disclosures made by it under stand-alone accounts being consolidated. In the CFS, the company would need to give all disclosures relevant for CFS only. [Source: General Circular No. 39/2014 dated 14th October, 2014]

Right of persons other than retiring director to stand for directorship - Refund of deposit under section 160 of the Companies Act, 2013 in certain case Clarity has been sought by companies registered under section 8 of the Companies Act, 2013 (corresponding to section 25 of Companies Act, 1956) about the manner in which the amount of deposit of rupees one lakh received by them under sub-section (1) of section 160 of the Companies Act, 2013 (Act) is to be handled if the depositor fails to secure more than twenty five per cent of the total valid votes. It has been noted that the relevant provision is silent on such issue. The matter has been examined in the Ministry and it is clarified that in such cases, the Board of directors of a section 8 Company is to decide as to whether the deposit made by or on behalf of the person failing to secure more than twenty-five percent of the valid votes is to be forfeited or refunded. [Source: General Circular No. 38/2014 dated 14th October, 2014]

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Issue No. 70: October, 2014 Page 11 of 20

Amendment of Companies (Accounts) Rules, 2014 In exercise of the powers conferred by sub-sections (1) and (3) of section 128, sub-section (3) of section 129, section 133, section 134, sub-section (4) of section 135, sub-section (1) of section 136, section 137 and section 138 read with Section 469 of the Companies Act, 2013 (18 of 2013), the Central Government hereby amends the Companies (Accounts) Rules, 2014, and these rules may be called as the Companies (Accounts) Amendment Rules, 2014. In the Companies (Accounts) Rules, 2014, in rule 6, after the existing proviso, the following provisos shall be inserted, namely:- “Provided further that nothing in this rule shall apply in respect of preparation of consolidated financial statement by an intermediate wholly-owned subsidiary, other than a wholly-owned subsidiary whose immediate parent is a company incorporated outside India: Provided also that nothing contained in this rule shall, subject to any other law or regulation, apply for the financial year commencing from the 1st day of April, 2014 and ending on the 31st March, 2015, in case of a company which does not have a subsidiary or subsidiaries but has one or more associate companies or joint ventures or both, for the consolidation of financial statement in respect of associate companies or joint ventures or both, as the case may be. ” [Source: Notification No. G.S.R. 723(E) dated 14th October, 2014]

Amendment of Companies (Audit and Auditors) Rules, 2014 In exercise of the powers conferred by sub-sections (1), (2) and (4) of section 139, sub-section (1) and (2) of section 140, sub-section (3) of section 141, sub-sections (2), (3), (8) and (12) of section 143, sub-section (3) of section 148, read with sub-sections (1) and (2) of Section 469 of the Companies Act, 2013 (18 of 2013), the Central Government hereby amends the Companies (Audit and Auditors) Rules, 2014, and these rules may be called as the Companies (Audit and Auditors) Amendment Rules, 2014. In the Companies (Accounts) Rules, 2014, after rule 10, the following provisos shall be inserted, namely:- “10A. For the purposes of clause (i) of sub-section (3) of section 143, for the financial years commencing on or after 1st April, 2015, the report of the auditor shall state about existence of adequate internal financial controls system and its operating effectiveness: Provided that auditor of a company may voluntarily include the statement referred to in this rule for the financial year commencing on or after 1st April, 2014 and ending on or before 31st March, 2015.” [Source: Notification No. G.S.R. 722(E) dated 14th October, 2014]

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RBI UPDATES Ø Circular/Notification/Guidance Foreign Exchange Management Act, 1999 (FEMA) Foreign Exchange (Compounding Proceedings) Rules, 2000 (the Rules) - Compounding of Contraventions under FEMA, 1999 It has been decided to delegate further powers to Regional Offices of the Reserve Bank of India as under: S.N. FEMA Regulation Brief Description of Contravention 1. Regulation 10 A (b)(i) read with

paragraph 10 of Schedule I to FEMA 20/2000-RB dated May 3, 2000

Delay in submission of form FC-TRS on transfer of shares from Resident to Non- Resident.

2. Regulation 10 B(2) read with paragraph 10 of Schedule I to FEMA 20/2000-RB dated May 3, 2000

Delay in submission of form FC-TRS on transfer of shares from Non-Resident to Resident.

3. Regulation 4 of FEMA 20/2000- RB dated May 3, 2000

Taking on record transfer of shares by investee company, in the absence of certified form FC-TRS.

The work of three divisions of Foreign Investment Division (FID) viz. Liaison/ Branch/ Project office (LO/ BO/ PO) division, Non Resident Foreign Account Division (NRFAD) and Immovable Property (IP) Division has been transferred to FED, CO Cell, Reserve Bank of India, 6, Sansad Marg, New Delhi- 110001 with effect from July 15, 2014. Accordingly, the officers attached to the FED, CO Cell, New Delhi office are now authorized to compound the contraventions as under:

S.N. FEMA Notification Brief Description of Contravention 1. FEMA 7/2000-RB, dated 3-5-2000 Contraventions relating to acquisition and

transfer of immovable property outside India.

2. FEMA 21/2000-RB, dated 3-5-2000 Contraventions relating to acquisition and transfer of immovable property in India.

3. FEMA 22/2000-RB, dated 3-5-2000 Contraventions relating to establishment in India of Branch office, Liaison Office or project office.

4. FEMA 5/2000-RB, dated 3-5-2000 Contraventions falling under Foreign Exchange Management (Deposit) Regulations, 2000.

The powers to compound the contraventions herein above have been delegated to all Regional Offices (except Kochi and Panaji) and FED, CO Cell, New Delhi respectively without any limit on the amount of contravention. Kochi and Panaji Regional offices can compound the above contraventions for amount of

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Issue No. 70: October, 2014 Page 13 of 20

contravention below Rupees one hundred lakh (Rs.1,00,00,000/-). The contraventions of Rupees one hundred lakh (Rs.1,00,00,000/-) or more under the jurisdiction of Panaji and Kochi Regional Offices and all other contraventions of FEMA will continue to be compounded at Cell for Effective Implementation of FEMA (CEFA), Mumbai, as hitherto. For all other contraventions, applications may continue to be submitted to CEFA, Foreign Exchange Department, 5th floor, Amar Building, Sir P. M. Road, Fort, Mumbai 400001 [Source: RBI/2014-15/266 A.P. (DIR Series) Circular No.36 dated 16th October, 2014]

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CORPORATE FINANCE

Ø Latest News Private Equity Gati's cold chain arm raising $24M from Mandala Capital Gati Kausar India Ltd., the cold chain arm of Gati Ltd, is raising Rs 150 crore ($24.45 million) from funds managed by Mandala Capital Ltd [Source:VCCircle, OCTOBER 30,2014] Sterling Urban raises $10M from Singapore investor, HDFC arm for Bangalore project Singapore-based Superior Investments Pte. Ltd and HDFC Investment Trust II, an investment firm under mortgage lender HDFC Ltd, have together invested Rs 60 crore (approximately $9.7 million) in a residential project of Bangalore-based Sterling Urban Developers. [Source:VCCircle, OCTOBER 29,2014] Greenko raises $125M from US-based EIG Global Energy Partners UK's AIM-listed Indian renewable energy firm Greenko has raised $125 million from Washington-based energy and infrastructure-focused asset management firm EIG Global Energy Partners, through its subsidiary Greenko Mauritius. [Source:VCCircle, OCTOBER 24,2014] Heramb Hajarnavis to float $250M mid-market focused PE firm Sealink Capital Heramb R Hajarnavis, who recently quit as India head of the private equity practice for Kohlberg Kravis Roberts & Co (KKR), is floating a $200-250 million private equity fund called Sealink Capital [Source:VCCircle, OCTOBER 22,2014] Multiples PE encashes $17M more in part exit from PVR Multiples Alternate Asset Management (Multiples PE) has sold more shares of the country’s largest multiplex chain operator PVR Ltd by selling a small minority stake for the second time this year [Source:VCCircle, OCTOBER 20,2014] Fidelity Growth Partners leads $10M funding round in Cygnus Medicare Fidelity Growth Partners India has led a Rs 60 crore ($10 million) investment round in Cygnus Medicare, a multi-specialty hospitals based in North India [Source:VCCircle, OCTOBER 17,2014] Salon chain Naturals revives plans to raise around $16M through PE funding Hair and beauty chain Naturals is in talks with private equity fund companies to raise Rs 100 crore as it plans to expand its footprint across the country. [Source:VCCircle, OCTOBER 13,2014]

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Gaja Capital marks first close of new fund at $130M, targets mid-2015 for final close Mid-market focused private equity firm Gaja Capital has hit first close of its new fund at $130 million (Rs 797 crore) and is now looking to raise the entire targeted corpus of $225 million (with hard cap of $250 million) [Source:VCCircle, OCTOBER 10,2014] Catamaran exits power equipment maker TD Power Systems with around 26% IRR Infosys' chairman emeritus NR Narayana Murthy's private investment firm Catamaran Ventures has exited its less than two-year-old investment in Bangalore-based TD Power Systems Ltd via an open market share sale on Wednesday. [Source:VCCircle, OCTOBER 09,2014] Amit Goenka's realty PE firm Nisus aims to deploy over $80M this fiscal Amit Goenka, the former chief executive officer of Essel Financial Services, who recently raised his maiden residential fund, has already committed three-fourths of the corpus and has now charted to expand the size of the fund. [Source:VCCircle, OCTOBER 08,2014] Eye wear e-tailer Lenskart in advanced talks to raise $25M from TPG, others Noida-based Valyoo Technologies Pvt Ltd, which owns a string of e-commerce properties including Jewelskart.com, Watchkart.com, Bagskart.com and Lenskart.com, is in advanced talks to raise $25 million in its Series round of funding led by TPG Capital, a US-based private equity fund. [Source:VCCircle, OCTOBER 07,2014] Karvy Financial in talks to raise close to $100M from PE firms Non-banking finance company Karvy Financial Services Ltd is mulling to raise around Rs 600 crore ($98 million) and is in talks with 3-4 private equity firms to scoop up the money over the next six months [Source:VCCircle, OCTOBER 07,2014] Paytm in talks to raise $200M in funding, appoints Goldman Sachs as its banker Noida-headquartered mobile internet firm One97 Communications Ltd, which runs the digital goods and services marketplace besides mobile & DTH recharge platform Paytmamong other mobile value added services, is looking to raise $200 million in fresh funding. [Source:VCCircle, OCTOBER 01,2014]

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Merger & Acquisition Infosys eyeing large acquisitions; cos with revenues of $600-700M under radar Cash rich IT services major Infosys Ltd, which has been conservative in chasing inorganic growth unlike its rivals HCL, Wipro and Cognizant, seems to be finally shedding its strategy under the new management team led by Vishal Sikka and has some large deals under the radar. The firm is considering a few big deals in strategic areas and regions where it may acquire firms with annual revenue of $600-700 million. [Source:VCCircle, OCTOBER 29,2014] Dewan Housing Finance picking 50% stake in Pramerica Mutual Fund Dewan Housing Finance Corporation Ltd (DHFL) is forming an asset management joint venture (JV) with US-based Prudential Financial Inc (PFI) in India by acquiring 50 per cent in its existing wholly owned mutual fund business in the country [Source:VCCircle, OCTOBER 28,2014] Alembic Pharma buying 49% stake in Algerian drugmaker Adwiya Mami Gujarat-based Alembic Pharmaceuticals Ltd has entered into a joint venture agreement which would see it picking 49 per cent stake in Adwiya Mami SARL Algeria [Source:VCCircle, OCTOBER 27,2014] McLeod Russel to buy 90% stake in Rwanda's Pfunda Tea Co for $19.5M- Kolkata-based tea plantation company McLeod Russel India Ltd has agreed to acquire 90 per cent equity stake in Rwanda-based tea plantation firm Pfunda Tea Company Ltd for $19.5 million (approximately Rs 120 crore) [Source:VCCircle, OCTOBER 22,2014] Panasonic buys out Obul Reddy’s 17% stake in listed arm, to make delisting offer Japanese consumer durables major Panasonic Corporation has acquired 16.95 per cent equity stake held by Indian partner P Obul Reddy Group in its public listed Indian arm Panasonic Appliances India Ltd, as part of its efforts to consolidate promoter shareholding and thereafter delist the arm from Indian bourses [Source:VCCircle, OCTOBER 20,2014] Future Lifestyle acquires 60% stake in footwear & accessories maker Elisir Future Lifestyle Fashions Limited (FLF), the fashion apparel, accessories and associated products arm of Kishore Biyani-led Future Group, has acquired 60 per cent stake in a newly incorporated firm Elisir Lifestyle Pvt Ltd [Source:VCCircle, OCTOBER 17,2014] Nissan Chemicals in talks to acquire Hyderabad Chemicals for $88M Nissan Chemicals Industries Ltd, a Japanese firm manufacturing basic and fine chemicals, is in talks to acquire Hyderabad-based pesticides manufacturer Hyderabad Chemicals Ltd in a deal that will mark the exit of promoters [Source:VCCircle, OCTOBER 16,2014]

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IMImobile acquires UK-based mobile messaging platform TextLocal for up to $16.6M London-based IMImobile Ltd, a provider of mobile engagement software to mobile operators which has a development centre in India and was started by founders of Indian origin, has acquired mobile communications company TxtLocal Ltd (TextLocal) for up to £13.15 million ($16.6 million or Rs 102.1 crore) in a cash-and-equity deal. [Source:VCCircle, OCTOBER 14,2014] AntFarm buys online food delivery venture, in talks to raise up to $30M afresh Mumbai-based hybrid startup incubation platform AntFarm, which has been building new ventures from scratch has tweaked its model to acquire an online food ordering service company and is now in talks with investors to raise $20-30 million in its next round of funding. [Source:VCCircle, OCTOBER 13,2014] Blackstone, RMZ in the fray to acquire office asset of 3C Company for over $50M Private equity giant Blackstone, which has been one of the most active private investors in commercial properties in the country, and Bangalore-based real estate developer RMZ are in the fray to acquire an office asset [Source:VCCircle, OCTOBER 10,2014] Mahindra Two Wheelers to acquire 51% stake in Peugeot's scooter unit Indian automobile major Mahindra and Mahindra Ltd's two-wheeler unit Mahindra Two Wheelers Ltd (MTWL) has agreed to acquire 51 per cent equity stake in France-based PSA Peugeot Citroen's scooter business. [Source:VCCircle, OCTOBER 07,2014] IFC picking 14.29% stake in paper maker Bilt's IPO-bound Dutch arm for $100M International Finance Corp has signed a definitive agreement with Bilt Paper BV, a step-down subsidiary of India’s largest paper company Ballarpur Industries Ltd (Bilt), for subscription of new shares worth $100 million, valuing the Dutch subsidiary at $700 million [Source:VCCircle, OCTOBER 06,2014] SoftBank puts $250M in Legendary Entertainment, India & China focused content JV In what marks Nikesh Arora's first big move at SoftBank, the Japanese telecom and technology investments giant has invested $250 million to buy an undisclosed stake in Hollywood production house Legendary Entertainment. [Source:VCCircle, OCTOBER 06,2014]

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Venture Capital Ready-to-cook packaged food maker iD Fresh Food raises $5.7M from Helion Bangalore-based iD Fresh Food (India) Pvt Ltd, a ready-to-cook packaged food company, has raised Rs 35 crore ($5.69 million) from Helion Venture Partners, the company said in a release. As part of the deal, Rahul Chowdhri, partner, Helion, will join the board of the company. [Source:VCCircle, OCTOBER 31,2014] Hybrid higher education services provider iNurture raises $5M from Bertelsmann Bangalore-based iNurture Education Solutions Pvt Ltd, which provides higher education services in the online as well as offline formats, has raised about $5 million (about Rs 30 crore) in fresh funding [Source:VCCircle, OCTOBER 30,2014] Solid waste management firm Zuci Energy raises seed funding, eyes $13M more Hyderabad-based solid waste management firm Zuci Energy Pvt Ltd has raised an undisclosed round in seed funding from a few alumni of Harvard Business School including serial entrepreneur Krishna Lakamsani, Abhinav Sinha, Ramana Nanda [Source:VCCircle, OCTOBER 28,2014] Restaurant reservation site GourmetItUp raises under $300K in angel funding Mumbai-based Tastebox Hospitality Pvt Ltd, the startup behindGourmetItUp, an online platform for gourmet cuisine, has secured Rs 1.81 crore (under $300,000) in funding from a group of investors, including Karan Bhagat, MD of IIFL Private Wealth Management; Prabhat Awasthi, managing director of Nomura Holdings; and Atul Kumar of Genome Capital. [Source:VCCircle, OCTOBER 27,2014] Agility computing startup People10 raises angel funding Bangalore-based People10 Technosoft Pvt Ltd, a new-age software services startup that provides custom solutions in web, mobile, cloud and data analytics, has secured an undisclosed amount in early-stage funding from a group of high-net-worth individuals (HNIs) based out of the US, a top executive of the

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firm told VCCircle. The HNIs invested the capital through a newly-formed angel network called Ideaworks Partners. [Source:VCCircle, OCTOBER 21,2014] Canaan puts its India portfolio on the block, sale may fetch $250M Silicon Valley-based venture capital firm Canaan Partners has put its India portfolio on the block as it seeks to cease its operations in the region [Source:VCCircle, OCTOBER 17,2014] Bakers Circle hires Langham Capital to advise on fundraise worth up to $10M Delhi-based food services company Bakers Circle has appointed investment bank Langham Capital to advise it for raising Rs 30 crore in growth capital and another Rs 30 crore in secondary. [Source:VCCircle, OCTOBER 14,2014] OnlinePrasad raises pre-Series A funding from Hyderabad Angels and Chennai Angels Bangalore-based Sumiran Spiritual Services Pvt Ltd, the company behind OnlinePrasad.com, a platform that offers prasad (offerings to god) on behalf of users at temples of their choice and then delivers it at their homes, has raised an undisclosed amount in its pre-Series A round of funding led by Hyderabad Angels, with participation from Chennai Angels and a few other individuals. [Source:VCCircle, OCTOBER 13,2014] Online medical advice startup MediAngels raises $1M from Ventureast Mumbai-based Angels Health Pvt Ltd, which runs MediAngels.com, an online platform that allows patients to consult specialised doctors from across the globe, has raised $1 million (over Rs 6 crore) in funding from Ventureast Tenet Fund and Government of India's Technology Development Board. The funds will be used to expand the firm’s sales team to get more insurers and corporate clients, as well as to provide voice-based consultation. [Source:VCCircle, OCTOBER 09,2014] Referral hiring solutions startup GrownOut raises Series A funding from Matrix Delhi-based GrownOut Solutions Pvt Ltd, which offers an online referral hiring platform that enables organisations to leverage their employees’ professional network, has secured an undisclosed amount in its first institutional round of funding from Matrix Partners India. GrownOut will use the funds for product development and to grow its business. [Source:VCCircle, OCTOBER 08,2014] Web-marketing platform LimeTray raises Series A funding from Matrix, others Delhi-based Alchemy Web Pvt Ltd, which operates an online platform that helps restaurants to run their day-to-day operations, including ordering, online presence management and customer relationship management (CRM) under the brand LimeTray, has bagged an undisclosed amount in its Series A funding from Matrix Partners India. Other investors who participated in the round include Umang Kumar, CEO of Gaadi.com; Ankur Warikoo head (APAC) at Groupon; and Ankur Singla, CEO of Akosha. [Source:VCCircle, OCTOBER 01,2014]

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