New Delhi, January 12
Vijay Mallya may have promised his employees Kingfisher Airlines will fly by summer but skeptical officials and experts believe losses will only mount if the cash-strapped carrier takes to the skies without a collaborative effort from a partner with deep pockets, which appears improbable as of now.

With the staff threatening to move court on the company’s closure, Mallya wrote to them on Thursday, outlining plans for a revival to be funded with Rs 6.5 billion from parent company UB Group, while blaming the media for his woes.

Civil aviation ministry officials, however, believe Mallya is only delaying the inevitable action by lenders — banks, tax authorities and the government —as his planned investment is just not enough to restart operations of the carrier.

Flying again will only bring in more losses for the debt-laden Kingfisher, they say.

“How will he fly? If he thinks he can bring in investment it’s an impossible task. His business model is all wrong and losses will only mount if he tries to fly again. He’s only trying to delay the inevitable, the extreme course by oil companies, tax authorities, banks and the government, when cheques bounce and taxes are evaded,” they added.

While a flying licence can be renewed, the problem is that with every passing day it is only becoming more difficult for Kingfisher to fly. Its liabilities are rising as interest costs on loans increase. Even if it manages to take to the skies, the management will find it difficult to win back passengers’ faith and match fare cuts from fierce competitors who would not want the status quo of flying full capacities to be disturbed.

DGCA officials also feel that outstanding issues regarding lenders and staff payment will not result in reliable services because his plan has no provision for payment of airport dues.

So what happens if the Kingfisher winds up?

According to aviation expert Jitendra Bhargava, the lender banks will have to sell the mortgaged property, which may not be enough to fulfill the liabilities and loans will then have to be declared as NPAs, putting a question mark on “the business acumen of the lenders”. The government will be forced to look at new applications for licences, which it seems to be delaying, apparently because of pressure from other airlines.“All other airlines are doing 80% of the capacity, increasing to 100% on some days on some routes, resulting in skyrocketing passenger fares. Also so far no question has been asked on the role of the banks. We are talking in terms of a listed company (in this case the lender banks) with independent directors on the board. How could they advance Mallya the money?” Bhargava asks.

Toronto, Ont., January 12
Shares of Waterloo, Ontario-based Research In Motion rallied as investors positioned ahead of the launch of its new make-or-break BlackBerry 10 smartphones at the end of the month. Morningstar analyst Brian Colello did not see any one news story driving the stock, which climbed steadily through much of the day. The new phones are to be formally unveiled on January 30.

"The stock has been extremely volatile, based on BlackBerry 10 rumours and the potential for success in the market," said Colello.

Several blog posts published on Friday showed purportedly leaked photos of what could be the new phones, and a number of tech sites confirmed that Sprint Nextel Corp would carry BlackBerry 10. "Sprint plans to bring BlackBerry 10 to our customers later this year. We will share more details soon," said Mark Elliot, a spokesman for the US carrier, said in an email.

Earlier this week, executives at Verizon Communications , AT&T Inc and T-Mobile USA all confirmed they would carry the smartphones, and said they are looking forward to the new devices.

Throughout the autumn of 2012, RIM's stock rose as investors grew more optimistic about the prospects for BlackBerry 10. Colello said the market went from pricing in no chance of success, to betting on at least some chance of success for the new products. But the rally broke off after RIM reported earnings in December, revealing that it would roll out a new fee structure for its services segment which some fear could put pressure on the high-margin business. RIM's Nasdaq-listed shares were up 11.8% at $13.33. Shares jumped 11.0% to C$13.09 on the Toronto SE, over twice the low of C$6.10 that they touched in September. — Reuters

I booked an apartment in 2004 for Rs 33 lakh. It is now ready for possession and is priced at Rs 73 lakh. However, instead of moving in I want to sell it. What happens if I sell it out now? Does it attract capital gains tax and, if so, how much? How can I save on the tax?

— Naresh

If you sell the property before taking possession, you are selling a right to own a flat. The cost of acquisition of this right is the total cost of the flat you have paid (including penal interest) and the date of its acquisition is the date on which you made the very 1st payment, whether in installments or as a lump sum. In your case, since the period of three years has elapsed, you have earned long-term capital gains after indexations which are chargeable to tax at the rate of 20.6 per cent. After the flat is ready and you have taken possession, it becomes a different species. The clock for long-term or short-term starts once again from the date of your taking possession. If you sell the flat after taking possession, you will be liable to pay short-term capital gains tax at the normal rates applicable to your total income, inclusive of the short-term gains. The tax on all long-term capital gains can be saved by investing within six months the capital gains amount in infrastructure-related bonds of NHAI or REC under Section 54E of the Income Tax Act. The lock-in period is three years. The current interest rate is around 5.5% and this is fully taxable. The ceiling on this investment is Rs 50 lakh per financial year.