Vaish Associates Advocates

The Delhi High Court in the recent decision of Gragerious Projects Pvt. Ltd. 2024: DHC: 9019-DB, has, while upholding the deletion of penalty by the ITAT, ruled that the two limbs, stipulated under section 271(1)(c) of the Income Tax Act, 1961, viz., “concealment of particulars of income” and “furnishing of inaccurate particulars of income”, are separate and distinct; accordingly, while initiating proceedings for imposition of penalty, it is paramount for the officer to spell out in clear terms, the specific ground or charge on which penalty is sought to be imposed. The Court concluded that failure on the part of the officer to specify the appropriate “limb” for imposition of penalty, results in denial of proper opportunity for the assessee to put forth its defence, and, in such eventuality, the levy of penalty would stand vitiated in law. The Court also reiterated the principle that findings recorded in assessment proceedings are not conclusive or determinative for the purposes of imposition of penalty. The matter was successfully represented by Mr. Ajay Vohra, Sr. Advocate, under assistance and instruction of the Vaish Team comprising of Mr. ROHIT JAIN, Sr. Partner, Mr. Aniket D. Agrawal, Associate Partner, and Mr. Samarth Chaudhari, Sr. Associate. #Taxation #Tax #Litigation #LegalUpdate #Law #Lawyers #LawFirm #ITAT

We are delighted to share that our Senior Partner, Vijay Pal Dalmia, has been recognised as a Thought Leading Author by Mondaq in its Autumn 2024 Edition. He has been acknowledged under three key topics: Arbitration and Dispute Resolution, Government & Public Sector, and Media, Telecoms, IT, and Entertainment, for his insightful and impactful articles.  Adding to this honour, Vaish Associates Advocates has also been recognised as a Top Firm by Mondaq.  We extend our heartfelt gratitude to Mondaq for this recognition and extend our heartfelt congratulations to Vijay for his well-deserved achievement!  #TLAutumn2024 #ThoughtLeadership #LegalExcellence #Arbitration #PublicSector #Media

We are pleased to share with you the link to our bi-monthly newsletter on the latest GST and Customs Developments. The newsletter covers recent judgments and regulatory updates in the GST and Customs space in India. Web link: https://lnkd.in/gT8FZb2z We trust that you will find the same useful. #GST #Customs #IndirectTax #Tax #Taxation #LegalInsights #LegalUpdates

RBI ISSUES FRAMEWORK FOR RECLASSIFICATION OF FPI TO FDI Reserve Bank of India (“RBI”), vide its notification dated November 11, 2024, has released guidelines for reclassifying foreign portfolio investments (“FPI”) into foreign direct investments (“FDI”) under certain conditions. According to Schedule II of the Foreign Exchange Management (Non-debt Instruments) Rules, 2019 (“NDI Rules”), Foreign portfolio investors (along with its investor group) can hold less than 10% of a company’s paid-up equity capital on a fully diluted basis. Exceeding this limit allows foreign portfolio investors to either divest or reclassify their holdings as FDI within five trading days from the date of settlement of the trades causing the breach. In case the foreign portfolio investors intend to reclassify their FPI into FDI, the operational framework as stated below shall be followed: (a) Sector Prohibition: Reclassification is not allowed in sectors where FDI is prohibited. (b) Approvals Needed: Foreign portfolio investors must obtain government approval (especially for investments from bordering countries) and investee company concurrence before exceeding the FPI limit. (c) Intent & Custodian Role: Foreign portfolio investors must inform custodians of reclassification intent and provide a copy of necessary approvals and concurrence, following which custodians may freeze FPI purchase transactions until reclassification is completed. (d) Reporting Requirements: All FDI reclassifications must be reported as per RBI’s Mode of Payment and Reporting of Non-Debt Instruments Regulations, 2019. (e) Custodian Processing: Upon reporting completion, foreign portfolio investors shall approach its custodian to transfer the equity instruments of a company from its demat account maintained for holding FPI investments to its demat account maintained for holding FDI, marking the breach date as the reclassification date. After ensuring the that the reporting for reclassification is complete in all aspects, the custodian shall unfreeze the equity instruments and process the said request. Thereafter, such reclassified investment shall be considered as FDI and shall continue to be treated as FDI, even if the investment drops below 10% subsequently. The foreign portfolio investor along with its investor group shall be treated as a single person for the purpose of reclassification of FPI. (f) Time Compliance: Reclassification must occur within the five trading days period, after which the investment shall be governed by  Schedule Ito the NDI Rules. Notification link: https://lnkd.in/g5zCDpNf #VaishAssociates #LegalUpdate #RegulatoryUpdate #FDI #FPI #NDIRules #RBI

Our Partner, Yatin Narang authored the Indian chapter of the World Law Group Whistleblower Guide, 2024, which deals with the regulatory framework and the enforcement measures for the protection of whistleblowers in India. Read more at: https://lnkd.in/gf5SMwxf #Whistleblower #WLG #WorldLawGroup #VaishAssociates #India

The Delhi Bench of the Tribunal in the case of Tarun Sawhney vs ACIT has, reconciling conflicting views, held that an assessee is entitled to carry forward and set off long-term capital loss suffered on transfer of shares and equity oriented mutual funds on stock exchange after payment of STT, even though income therefrom is exempt from tax under section 10(38) of the IT Act. The Tribunal explained the distinction between exclusion of ‘source’ or ‘head of income’ vis-à-vis exemption of a specie of income (and not source) and held that while in the former case loss is not available for set off, in the latter case loss is available for being carried forward and set off. This decision holds considerable significance in providing guidance on distinction between the legal concept of “exclusion of source” vis-à-vis “exemption” and its impact on the losses. Accordingly, the Tribunal held that since capital gains, as a source, is taxable inasmuch as exemption under section 10(38) of the IT Act is allowed only in certain specified circumstances and such gains are in fact taxable in various circumstances like shares transferred without payment of STT, short-term capital gains, etc., losses arising on account of transfer of shares are available for carry forward and set off, notwithstanding the fact that income therefrom would have been exempt from taxation. The matter was successfully represented by Mr. ROHIT JAIN, Senior Partner and Ms. Somya Jain, Senior Associate. #Tax #Litigation #LegalUpdates #Law #Lawyers #LawFirm

The Hon’ble National Company Law Tribunal, Mumbai (the “Hon’ble NCLT”), vide order dated November 14, 2024, has allowed an Application filed by Mr. Jitender Kothari, the Resolution Professional of ND S Art World Private Limited seeking approval of the Resolution Plan submitted by Maharashtra Film Stage and Cultural Development Corporation Limited, a Government of Maharashtra Undertaking (“Successful Resolution Applicant”) under the relevant provisions of the Insolvency and Bankruptcy Code, 2016 and rules and regulations made thereunder (“Code”). Vaish Associates, Advocates had filed an Application, inter alia, under Section 30(6) read with Section 31(1) of the Code before the Hon’ble NCLT on behalf of the Resolution Professional of ND S Art World Private Limited. After hearing the Application, vide order dated November 14, 2024, the Hon’ble NCLT was pleased to allow the afore-mentioned Application, thereby approving the Resolution Plan. The assignment was handled by team comprising of Ms. Sandhya Iyer (Senior Partner), Mr. Rishabh Chandra (Senior Associate) and Mr. Adv.Neel Mehta (Associate). #IBC #NCLT #Litigation #LegalUpdates #Law #Lawyers #LawFirm

In the November edition of our monthly newsletter "Legalaxy", our team analyses some of the key developments in securities market, banking and finance, corporate affairs, labour and employment, environment and consumer affairs. Click here to read the latest edition of Legalaxy: https://lnkd.in/gYsEVTkm #VaishAssociates #Legalaxy #LegalUpdates #SEBI #AIFs #ICDR #LODR #InvestmentAdvisers #RBI #CreditInformation #CIC #NBFCs #Compounding #IFSCs #IFSCA #FCA #IBU #Greenwashing #IT #ITES #MCA #EAdjudication #Biodiversity

Sharing the thoughts of our Associate Partner, Mr. Saheb Singh Chadha on a recent decision of the Delhi High Court in the case of Ambuja Cement Ltd. Vs. Collector of Stamps, Delhi. In a landmark ruling, the Delhi HC has quashed an order passed by the Collector of Stamps, Delhi (CoS) in the year 2014 which imposed stamp duty of Rs. 218 crores along with penalty of Rs. 69 crores on Holcim (India) Private Limited (Holcim) in relation to an order of Delhi High Court approving a scheme of amalgamation between Holcim and Ambuja Cements India Private Limited (Ambuja Cements) in the year 2011(Merger Order). The HC’s ruling addressed the critical issue of whether the stamp duty exemption for property transfers among group companies, as provided under the Central Government’s notification dated 25th December 1937 as applicable in Delhi (Notification), was available or not. Holcim argued that the scheme and the Merger Order were squarely covered under the Notification, exempting them from stamp duty, as both Holcim and Ambuja Cements were wholly owned subsidiaries of a common parent company. CoS, however, contended that the Notification had been repealed when Schedule IA of the Punjab Stamp Act was extended to Delhi via GSR 1958, which specified stamp duty on instruments without acknowledging the Notification. The HC, referencing its earlier judgment in Delhi Towers Ltd. vs G.N.C.T. of Delhi, held that the Notification remains valid, exempting the scheme and the Merger Order from stamp duty. This ruling resolves a decade-long dispute between Delhi’s revenue authorities and corporations over the Notification’s applicability, reducing administrative and financial hurdles for corporate restructuring among group companies in Delhi. #StampDuty #StampDutyUpdates #Litigation #LegalUpdates #Law #Lawyers #LawFirm #Merger #Notification #DelhiHighCourt

We are pleased to announce that Vaish Associates Advocates acted on behalf of Liquidator of Sembmarine Kakinada Limited (“SKL”) undergoing liquidation process under the provisions of the Insolvency and Bankruptcy Code, 2016. Previously, Vaish Associates Advocates had advised the Liquidator on the private sale process as a going concern using a challenge mechanism structured in a way so as to maximize value. The sale was approved by the Hon’ble National Company Law Tribunal, Amaravati (the “Hon’ble NCLT”) on April 25, 2024. Thereafter, Vaish Associates Advocates prepared an application under Regulation 45(3)(a) of Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016 seeking closure of liquidation process of SKL in view of sale of SKL in favour of Anirudh Agro Farms Limited. Vide Order dated November 6, 2024, the Hon’ble NCLT was pleased to allow the application seeking closure of liquidation process of SKL. Interestingly, on account of non-compliance of certain regulatory filing requirements, the requisite amount of money from sale proceed payable to a foreign branch of an Indian Bank by way of External Commercial Borrowing transaction through the Authorized Dealer bank (“AD Bank”) was withheld. The Liquidator had kept the aforesaid amount in the form of an interest bearing fixed deposit account with AD Bank. The aforesaid foreign branch of an Indian Bank had withheld “No Objection Certificate” required for filing e-Form CHG-4 by the Liquidator in furtherance of satisfaction of charge. Considering the situation, the Hon’ble NCLT allowed the closure of liquidation process along with direction to the AD Bank to make remittance towards the aforesaid amount along with interest accrued upon completion of necessary compliances. The assignment was handled by a team comprising of Ms. Sandhya Iyer (Senior Partner), Mr. Rishabh Chandra (Senior Associate), and Mr. Adv.Neel Mehta (Associate). #IBC #Litigation #Law #Lawyers #LegalUpdates #Litigation