The Tribune, Chandigarh, India

	SEBI widens net for fake IPO bidding probe New Delhi, May 29 Market regulator SEBI has begun a probe into possible use of fake bids for artificially pushing up the subscription levels in numerous IPOs over past few years, with a modus-operandi similar to that in Vaswani Industries case. After halting Vaswani Industries' listing earlier this month on suspicion of irregularities in its IPO bidding, the SEBI last week ordered a detailed probe into the matter, which would be completed by the next month. However, SEBI has now received complaints of many IPOs in past 2-3 years, alleging that promoters roped in some 'operators' to inflate the IPO subscription level with fake bids, which they withdrew at a later stage or cashed in on the first day of listing. Concerned over the possible scale of the alleged manipulation, SEBI has decided to conduct a detailed probe on a number of IPOs and would soon seek relevant data and information about them from stock exchanges, merchant bankers and other entities, sources said. The probe would focus particularly on those IPOs where bids were withdrawn during the time the offers had remained open or those cases where shares had plummeted sharply on the first day of the listing, they added. Typically in such cases, the IPO-bound companies' promoters, or at times merchant bankers with or without the knowledge of the company, approach certain 'IPO operators' to put in fake bids in investor categories like retail, HNIs (High Net Worth Individual) and body-corporates. These fake bids help inflate the overall bid levels and thus attract the innocent investors for the public offer. If the desired levels of subscription are achieved during the bidding time, the fake bids are withdrawn, while in some cases the shares alloted for these fake bids are sold off within minutes of the listing. In some cases, means like stop-payment and wrong cheques are also used to withdraw the bids at a later stage. The funding for these fake bids is provided by company promoters or merchant bankers to the operators, sources said. According to them, more than promoters, it is merchant bankers and other advisors who are responsible for such kind of manipulations as they first suggest high valuations to push their fees higher and then resort to such practices for the IPOs to sail through. The fees of bankers and advisors are generally linked to the size of the public offers, which in turn are linked to the valuation of the shares being sold. Sources said the practice is similar to circular trading in secondary market, where demand is artificially pushed up through dummy sale and purchase of shares. — PTI
	Traders oppose FDI in multi-brand retail New Delhi, May 29 The Confederation of All India Traders (CAIT) today strongly opposed the Inter-Ministerial Group's proposal to open up multi-brand retail to foreign investors and said the arguments in favour of it were "totally irrational and illogical." "The Confederation of All India Traders has strongly contested the proposal of the inter-ministerial group (IMG) to allow FDI in multi-brand retail....(the argument that) FDI in retail will tame inflation is nothing but an imaginary exercise by the people who have the tendency to ignore the ground realities," CAIT said. Concerned over rising inflation, the Inter-Ministerial Group (IMG) had a few days back suggested allowing foreign investors in multi-brand retail, besides making changes in agriculture marketing laws to check the steep rise in prices. "We are taking a clear position on FDI in multi-brand retail. Of course, it is a recommendation, not policy," Chief Economic Advisor and IMG Chairman Kaushik Basu had said. Concerned over high inflation, the government in January had appointed a high-level inter-ministerial group to suggest steps to tame the rapid escalation in prices. — PTI
	Nano launched in Sri Lanka New Delhi, May 29 Tata Motors yesterday said it has begun exporting Nano to Sri Lanka, with a price tag starting at LKR 9.25 lakh (about Rs 3.80 lakh). The car will be sold through its 50-year old distributor in the country - Diesel & Motor Engineering PLC (DIMO). "Tata Motors has already established a firm footprint in international markets... The Tata Nano will play a major role in the next phase of growth of our international business," Tata Motors Managing Director and Group CEO Carl-Peter Forster said. A company spokesperson said the three variants of the car will be available at ex-showroom prices between LKR 9.25 lakh (about Rs 3.8 lakh) and LKR 11 lakh (over Rs 4.5 lakh). In India, the car is priced between Rs 1.40 lakh and Rs 1.97 lakh (ex-showroom, Delhi). Talking about Nano's future journey, Tata Motors Managing Director (India Operations) P M Telang said, "We have already formulated plans for its introduction in several countries, to be implemented over the next few years." Besides Sri Lanka, the firm was exploring possibilities in different neighbouring nations such as Nepal. The company was expected to launch the car in Europe by 2011. Tatas to assemble JLR in India Mumbai: Tata Motors plans to now assemble Jaguar Land Rover (JLR) here, heating up competition for luxury vehicle market players like BMW, Daimler and Audi. The company's models will now compete with SUVs XC 60 from Volvo India, Audi Q5 from Volkswagen AG and BMW's X3. — PTI
	Tax Advice Capital loss can’t be adjusted against interest income by SC Vasudeva Q. I have two accounts with Post Office w.e.f. 07.07.2005, one MIS and the other is SCSS. MIS is a six years account, the payment of interest is monthly @ 8% PA, whereas SCSS is five years account, the payment of interest is quarterly @ 9%. The premature closure of these accounts is permissible to the depositors subject to the following conditions. 1. MIS (Monthly Income Scheme) — After completion of one year and 3 year of account from the date of its opening an amount equal to 2% and 1%, respectively of the deposit shall be deducted and the remainder paid to the depositor by the Post Office. 2. SCSS (Senior Citizen Saving Scheme) — After completion of one year and 2 year of account from the date of its opening an amount equal to 1.5% and 1%, respectively, of the deposit shall be deducted and the remainder paid to depositor by the Post Office/Branch of the SBI, where the account was opened. I request you to please clarify the followings points:- (i) Whether the above percentage deduction of the deposit amount on amount of premature closure of MIS and SCSS accounts made by the Post Office is to be considered as capital loss in the year of premature closure of these accounts in the income tax return for that year. (ii) Whether (if the above is considered as capital loss) it can be adjusted against the interest earned from Post Office/Bank till the date of premature closure of accounts and the interest earned after deposit the withdrawn capital amount from Post Office with bank till the close of that year in I.T. return for that year. — Kartik A. (i) The deduction of the deposit amount of premature closure of MIS and SCSS will be considered as a capital loss in the year of pre-mature closure of these accounts. However, such capital loss in my opinion cannot be construed as arising on account of transfer of a capital asset as envisaged under section 45 of the Act read with section 2(47) of the Act. (ii) Such capital loss cannot be adjusted against the amount of interest earned from post office and/or bank. Interest income Q. I am a senior citizen and Haryana Govt. Pensioner. 1. During the financial year ending 31.03.2010 my total income from all sources was 2,04,000. To save income tax, I purchased National Saving Certificates (8th Issue) in Feb., 2010 for Rs 44,000/-. 2. I seek your advice as to how the yearly income of interest on these certificates is to be worked out commencing from the Assessment Year 2010-11 so that the entire amount of interest of Rs 12,000/- is shown on the maturity of these certificates in February, 2013. — Amit A. The accrued interest on National Saving Certificates is to be included on the following basis in respect of NSCs purchased after 01.03.2003. The amount given below is in respect of denomination of NSCs of Rs 100/-: 1st year 8.16 2nd year 8.83 3rd year 9.55 4th year 10.33 5th year 11.17 6th year 12.08 On the above basis you can compute the interest for other denominations. Gratuity Q. This is with reference to your clarification "whether income tax is deductible from the enhanced amount of DCRC (death-cum-retirement gratuity) i.e. in excess of Rs. 3.50 lakh to Rs 10.00 lakh from the retirees of Punjab State Electricity Board Patiala, who retired between the periods 01.01.2006 to 23.05.2010?" Published in the Tribune dated 16.05.2011. Kindly re-clarify the matter referred above on basis of the following points. 1. DCRC (death-cum-retirement gratuity) is being paid to the pensioners of the Punjab State Electricity. Board Patiala as per Punjab Govt. Civil Service Rules Vol- II (Rule 6.16 in toto ) as is being paid to the employees of the State Govt. Employees of the Punjab State Electricity Board Patiala are covered under the Income Tax Act Rule 10 (10) ( i ) being its employees are holders of civil posts under the State Govt. 2. On earlier occasions, whenever amount of DCRG was enhanced w.e.f. 01.01.1986 to 31.03.1988 from Rs. 50000/- to Rs 1 lakh and 01.0101969 to 23.09.1997 (from Rs 2.50 lakh to Rs. 3.50 lakh ) no income tax was deducted from the increased amount of DCRG of its retirees. 3. The Gratuity Act 1972 (which is covered under the Income Tax Act Rule 10 (10) (ii) is not applicable to the employees of the Punjab State Electricity Board Patiala as it has been exempted by a notification of the Punjab State Govt. 4. Amount of DCRG (death-cum-retirement gratuity) is not calculated as per Rule of Income tax Act 1961 Rule 10 (10) ( iii ) instead it is covered & paid under the Income Tax Rule 10 (10 ) ( i )* — H.S. Gupta A. Reference your query regarding the exemption of death-cum-retirement gratuity payable in accordance with Central Civil Services (Pension) Rules 1972 or under any similar scheme applicable to the members of the Civil services of a state or holders of civil posts under a State or to the employees of a local authority. In case death-cum-retirement gratuity to employees of PSEB Patiala is payable in accordance with the rules specified here in above, such gratuity would be exempt from income tax in its entirety.