One of the famous quotes from Warren Buffet ‘Long ago, Ben Graham taught me that Price is what you pay; Value is what you get’. This statement is true not only from investor viewpoint but also from taxman viewpoint!

Income Tax Act, 1961 (‘Act’) contains provisions which focus primarily on value rather than nature of receipt, whether revenue or capital. Sec 2(22B) of the Act has defined the term ‘Fair Market Value’ (FMV) in relation to Capital Asset. However, reference to FMV is made in the Act in various scenarios and not limited to capital asset only though it was defined for such.

Read more: Fair Market Value - Not more and Not Less - Direct Taxes

The recent judgment of Hon’ble National Company Law Appellate Tribunal (NCLAT), New Delhi in the case of Binani Industries Limited v Bank of Baroda, has made significant observations on certain aspects pertaining to Insolvency & Bankruptcy Code, 2016 (IBC).  Though the judgement contains various aspects, decided by the Hon’ble NCLAT, in this article, we wish to deliberate on the aspect which is deliberated by Hon’ble NCLAT with respect to discriminatory or differential treatment among similarly placed creditors while submission of resolution plan by resolution applicant(s). The Hon’ble NCLAT has stated that differential or discriminatory treatment among similarly placed creditors is not what is envisaged under the IBC or its regulations. Before proceeding to further examine, let’s get the facts in place to appreciate the judgment.

Read more: Differential Treatment Inter se Creditors – Not Permissible

DEMATERIALISATION OF SECURITIES BY UNLISTED PUBLIC COMPANIES AND FILING OF RECONCILIATION OF SHARE CAPITAL AUDIT REPORT 

This article is an attempt to list out the provisions/compliances of the rules notified in connection with the Dematerialization of Securities by Unlisted Public Companies. 

Vide the Companies (Prospectus and Allotment of Securities) Third Amendment Rules, 2018, Dt: 10.09.2018, notified to be effective from 02.10.2018, the Ministry has mandated that an Unlisted Public Company shall: 

• issue of Securities in Dematerialised form only; and 

• facilitate dematerialisation of all its existing Securities. 

in accordance with the provisions of Depositories Act, 1996 and Regulations made there under. 

Read more: Dematerialisation of Securities Companies Act

A PEAK INTO ALTERNATIVE INVESTMENT FUNDS - SEBI AND FEMA PERSPECTIVE 

Background: 

Till 2012 Investment Management regulations of SEBI were limited only to Mutual Funds (MF), Collective Investment Schemes (CIS), Venture Capital Funds (VCF) and Portfolio Managers, and were well regulated.  In the absence of dedicated regulations, other private pools of capital and investment vehicles like PE Funds (Private Equity), Real Estate Funds, etc used VCF route for investments. This defeated the basic purpose of VCF which was promotion of early stage companies.  As the concessions and other benefits generally available to VCFs cannot be extended to other funds, the need was felt to recognize such other funds as “Alternative Investment Funds” as a distinct asset class apart from promoter holdings, creditors and public investors. 

Accordingly, SEBI has released a concept paper in August 2011 followed by issuing SEBI (Alternative Investment Funds) Regulations (herein after referred as ‘AIF Regulations’) in May 2012 and were amended time to time. SEBI (Venture Capital Funds) Regulations, 1996 were repealed and related provisions were subsumed in to AIF Regulations. However, SEBI (Foreign Venture Capital Investor) Regulations are not subsumed and are still governed separately.  

Read more: Alternative Investment Funds - FEMA