Companies & Sectors
Cairn India moves HC against tax demand

The company allegedly failed to pay taxes on gains made by its former parent in a share transfer transaction in fiscal 2006-07

 

Cairn India on Monday moved Delhi High Court seeking quashing of income tax department's demand order to pay Rs20,495 crore tax.
 
The company allegedly failed to pay taxes on gains made by its former parent in a share transfer transaction in fiscal 2006-07.
 
The company, part of the Anil Aggarwal-controlled Vedanta group, moved the court against income tax department's order asking it to pay the tax and a direction to tax authorities to take no coercive steps for recovery of demand.
 
Cairn India said that the tax proceedings should be quashed as these were initiated after a lapse of more than six years from the end of 2006-07. The plea said that the courts have held that proceedings should be initiated within a reasonable period of four years.
 
It said that it cannot be penalised because it could not have withheld tax anticipating a retrospective amendment.
 
"There was no taxable gain and, accordingly, no liability to withhold tax on the date of payment," it said.
 
The tax demand is for alleged failure to deduct withholding tax on alleged capital gains arising during 2006-07 in the hands of Cairn UK Holdings Limited (CUHL), the erstwhile parent of Cairn India, a subsidiary of Cairn Energy Plc. The Rs20,495 crore tax demand comprises Rs10,248 crore tax and Rs10,247 interest.
 

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Morgan Stanley sees 'Achhe Din' for India

Morgan Stanley has forecasted a sustainable lower inflation path of 5% to be achieved from April, and expects inflation to decelerate to 4.75% by December this year

 

With the rural wage growth coming down to a nine-year low at 5.5% this January and inflation seemingly stabilizing, India is bracing for a long period of higher sustainable growth and lower prices, financial services firm Morgan Stanley said on Monday.
 
"We are more constructive on inflation outlook and we expect the retail price index to decelerate to 4.75% by this December against the consensus estimate of 5.8%. We also expect growth momentum to pick up, but do not expect a rise in inflationary pressure," Chetan Ahya from US based Morgan Stanley said in a statement.
 
He said the rural wage, which is a crucial factor in the Indian economy, has come down to a nine-year low at 5.5% from a steep 20% during 2013-14 and a chain of "favourable factors" influencing retail inflation trend is on the way.
 
"Comparing the drivers of inflation between the two cycles we see that domestic factors are moving along similar lines as in the 2003-05 cycle and decline in global commodity prices are an added support in the current cycle," he said.
 
The firm has forecasted a sustainable lower inflation path of 5% to be achieved from April, and expects inflation to decelerate to 4.75% by December this year.
 
"Based on our expectation of the inflation trajectory, we believe the Reserve Bank (of India) could lower rates by a further 75-100 bps in 2015. Also we believe deposit rates are to decline significantly and more than policy rates," he said.
 
According to the company, while the growth rate exceeded nine percent and averaged at 7.9%, inflation remained stable and low averaging at four percent with food inflation averaging 3.2% and non-food inflation averaging 4.5%.

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Mineral, mining sector face test in sustaining growth: President

President Pranab Mukherjee said that the adverse impact of ecological degradation and climate change has emerged as a major concern the world over

 

India's mineral and mining sector face an acid test in sustaining growth potential of the economy with the country's mineral wealth posing both a challenge and an opportunity to geo-scientists, President Pranab Mukherjee said on Monday.
 
Speaking at the prentation ceremony of the National Geoscience Awards-2013 at Rashtrapati Bhavan here, he said that the adverse impact of ecological degradation and climate change has emerged as a major concern the world over.
 
"There is a need for more objective research by the geo-scientific community in the field of disaster management to mitigate environmental hazards and ensure greater resilience to such adversities," he said.
 
He said that the country's geo-scientific organizations and other institutes have, over the last few decades, invested heavily in analytical and instrumental infrastructure and the scientists should make good use of these instruments to "accomplish significant outcomes to shape geo-science of the future".
 
"India's mineral and mining sector faces an acid test for sustaining the growth potential of our economy. Our mineral endowment poses both a challenge and an opportunity for geo-scientists," he said.
 
"The geo-scientists should evolve an efficient work plan for development, conservation and augmentation of these precious mineral resources. They should put forward innovative ideas to achieve sustainable development of our country and at the same time address societal concerns," he added.
 

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