Will apologise unconditionally before SC: Tatas

New Delhi: The Tatas today said they would apologise before the Supreme Court for the "unfortunate error" in filing documents that were referred to have been placed on record in the Delhi High Court, reports PTI.

"Our lawyers are filing an application to tender an unconditional apology to the Honourable Court," Tatas said in a statement within hours of their lawyer, after being questioned by the government counsel, offered to withdraw the documents.

Earlier in the day, the government had put a question mark on the document filed by Tata Power saying that contrary to the claims of the company the papers are dated much later than the dismissal of its petition in the Delhi High Court.

Tata Power had challenged the Centre's nod to allow Reliance Power on use of coal from captive mines for the Sasan power project.

At the same time, the Tatas criticised the Centre saying "Government of India and Reliance Infrastructure (R-Infra) respondents instead of arguing the case sought to stand on an unfortunate error which had crept into the application filed by lawyers for putting record few additional documents which inadvertently refereed to documents placed on record in high court".

Tata Power had earlier challenged a decision by an empowered group of ministers to allow Reliance Power, and not R-Infra as referred in the Tatas' statement, to use coal from the captive mines for Sasan project in Madhya Pradesh for other projects.

"These documents, which have been downloaded from the website of the ministry of coal, only amplify our case that there was an out of turn allocation of large amount of coal made by Union of India to R-Infra's other projects, though this coal was meant for exclusive use of Sasan ultra mega power project (UMPP) in the first place," the Tatas' statement added.

Later, Tatas revised the statement saying the dispute is with Reliance Power, and not R-Infra as referred in the first statement.

The statement further said that the documents show that there were more than 700 applications of coal linkage/captive coal mines that were superseded in the process by the government, including many applications made by projects to be set up in the state of Madhya Pradesh.

Tata Power's petition was earlier dismissed by the Delhi High Court, which said that the company had no locus standi to file this petition and it was not maintainable.


Finmin to set to announce new tax norms for foreign firms

New Delhi: The finance ministry today said safe harbour rules — a set of norms that would enable the income tax (I-T) authorities to accept without scrutiny the tax returns by the Indian units of foreign companies — would be soon put in place, reports PTI.

"Safe harbour rules are at an advanced stage of consideration. I can't share how the guidelines are going to be...it will be a very favourable programme... we are working on it and it will be in place as early as possible," Central Board of Direct Taxes chairman S S N Moorthy said at an Associated Chambers of Commerce and Industry (Assocham) seminar here.

He said the norms would be taxpayer friendly.

The Central Board of Direct Taxes (CBDT) has set up a committee to formulate rules for the safe harbour provisions on transfer pricing returns.

Transfer pricing refers to the price at which one arm of a company, usually a multinational corporation, transfer goods or services to another division of the same organisation in order to calculate each arm’s profit and loss separately.

The committee comprises senior tax officials and representatives of trade and industry as well as Institute of Chartered Accountants of India (ICAI).

Its objective is to set conditions under the safe harbour rules to facilitate acceptance of a transfer pricing return without scrutiny.

The committee is expected to set an acceptable margin which would act as a benchmark for the industry.

Me Moorthy also said the Direct Taxes Code bill (DTC) proposes General Anti Avoidance Rules (GAAR) to prevent abuse of double taxation avoidance agreement by some.

He assured that GAAR would be implemented in a very modest, responsible and tax friendly manner.

The CBDT chairman also informed that DTC bill also proposed to bring public sector units under the ambit of Advance Rulings and Dispute Resolution (Authority) to resolve tax disputes.


Q2 growth to be lower than Q1: Kaushik Basu

Kolkata: Economic growth in the second quarter will be lower than the 8.8%
expansion witnessed in the first quarter, reports PTI quoting Chief Economic Advisor Kaushik Basu.

"Growth in the second quarter will not be as high as 8.8%," Mr Basu said at an
interactive session organised by the Bharat Chamber of Commerce here, adding that it could be well below 8%.

He predicted that the economy would register overall growth of 8.5% in the 2010-11 financial year.

Mr Basu said the good growth in the first quarter was largely on account of a lower base in the corresponding period of the previous year, whereas that was not the case in the second quarter.

Speaking about food inflation, he said the inflation data to be released on Thursday will likely report a 1% drop from last week's level of 11.74%.

Inflation will be lower in the coming months, Mr Basu said, adding that reducing it
drastically through policy measures would lead to high unemployment.

Criticising the government's foodgrains distribution policy, he said that the Centre's
mechanism was not proper and there was wastage.

Mr Basu suggested that the government could enter into a swap deal with other
countries, under which it would sell the foodgrains on the condition that it could buy fresh supplies at a later date.

"This is akin to storing them overseas instead of wasting them here," Mr Basu said.

He also said that selling foodgrains at zero or near zero prices would be of no use, as these would be again resold to the government through the minimum support price (MSP) window.

Mr Basu said that pricing of foodgrains should be done carefully so that it was not
above the market price and not at a very low level. He also called for changes in
labour laws.


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