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SantoshTiwari

NewDelhi,April18

MICROSOFTS Indian

arm has been asked to

pay increased taxes

withthe taxmansayingthe local

arm hadunderstatedits income

for the four years from FY06 to

FY09 by R5,135 crore. For FY09,

the adjustment asked for is

R1,355 crore on Microsoft India

R&Ds R1,360 crore of interna-

tional transactions.

Microsoft India R&Dhas chal-

lenged previous orders R150

croreis theadditiontoits income

demandedbythetaxmaninFY06,

R1,701 crore in FY07 and R1,928

crore in FY08. A company

spokesperson in India said: Mi-

crosoftcomplieswiththetaxlaws

in each jurisdiction in which we

operate. We are seeking relief

against the TP(transfer pricing)

adjustments through the appro-

priateappellateforums.Sincethe

matterissubjudice,weareunable

toprovidefurtherdetailsor com-

mentsregardingthesame.Weare

hopefulthattheRangacharycom-

mitteerecommendationsonR&D

Centres and Safe Harbours will

help facilitate resolutions to TP

litigationsin theIT industry.

The tax department has used

twomethodsto arriveat thecon-

clusions.First,it hasrejected Mi-

crosoftIndiascontentionon the

margins it is earning. Microsoft

Indiahassaidit getsamark-upof

15% on the India costs from its

globalparentandhascitedtheac-

counts of variousIndiancompa-

nies to justify this as an arms

lengthmargin. Thetransfer pric-

ing officer, however, has rejected

some of the comparisons made

and said the mark-up should be

23.3% this,theorderissuedto

MicrosoftIndiasays,addsaround

R83croremoretoitsincome.

This, however, is the least of

the additions made. The assess-

ment order says it is obvious

that the work being done at Hy-

derabadDevelopmentCentre(is)

much more intensive than rou-

tinesoftwarework.Atotalof 16

patents, thetax ordersays,were

granted in the year 2009 which

hadIndianinput. Someof the

very critical features of Win-

dowsVistaweredevelopedorup-

gradedby MIRPL(Microsoft In-

d ia R &D ) the se a re a ll

high-value functions which

have beenperformed by MIRPL

withoutwhichitwasnotpossible

to market the Windows Vista or

any other products for which

evenlimitedR&D hasbeen done

inIndiaTheassesseemust be

compensatedfor theintangibles

embedded in thesoftwaredevel-

opmentactivities.

Between 2005and 2009,the or-

dersays,the government-owned

Council of Scientific and Indus-

trial Research got 462 patents,

IBMs India operations 190, and

Microsoftgotatotalof 28.

Having come to this conclu-

sion, how much of Microsofts

global profits areattributableto

itsIndiaR&Darm? Thetaxman

doesthisintwoways.

Continuedon Page2

feBureau

NewDelhi,April 18

THE ruling UPA and

the principal Oppo-

sition party BJP on

Thursday reached a broad

consensus on the land Bill,

whichaimsto provideclari-

tyanduniformityinacquir-

inglandforpublicpurpose,

including industrialandin-

frastructure projects. With

thegovernmentagreeing to

the BJPs proposal that

farmers whose land hasbeen purchased after Sep-

tember5,2011,begiven50%

of the compensation pro-

posedinthe Bill,thewayis

now clear for the Bill,

vetted by a parliamentary

standing committee, to be

introduced in the current

sessionof Parliament.

Aftermeeting UPA man-

agers, Opposition leaderin

the Lok Sabha Sushma

Swarajsaidherpartywould

now support the Bill while

parliamentary affairs min-

ister Kamal Nath said the

businessadvisorypanels of

both Houses would decide

onthedateandtimetointro-

duce the Bill. The govern-

ment aims to get the Bill

passedintheBudgetsession

of Parliament which re-

opensaftera month-longre-

cesson Monday.

As per the Bill, which

seekstoreplacetheLandAc-

quisition Act, 1894, and be-

come the benchmark for

states, consent of 80% land

owners is mandatory. The

government will acquire

landforlargerprojectswhile

industry can purchase landsubject to an upper limit of

100acresinruralareasand50

acresin urbanlocalities.

Continuedon Page2

Sensex jumps285pts toregain19,000mark

THESensex onThursday

regainedthe19,000 level

aftertwoweeks,

climbing285.30points,

or1.52%,to closeat

19,016.46followingrobust

gainsin HDFC,ICICIBank

andL&Tonhopesof abigger-than-expectedrate

cutamid announcement

ofmeasuresto boost

exportsin foreigntrade

policy. Page9

Goldprices headingtowards2-yearlow

GOLDheadedtowards

a two-yearlowin Asia,

stokingrenewedinterest

inbarsandcoinsin

thecontinent,although

investorsare stillgrap-

plingwith uncertainties

aboutthe global

economic recovery.

Goldadvancedin early

tradein Europe on

Thursday. Page10

IMDexpectsnormalmonsoon:PawarIMDis expectinga normal

southwestmonsoonthis

year,whichaugurswell

foragriculture.IMDis

expectinga normal

monsoonas oftoday.

Butit prefersto waittill

thefirstweekofMayfor

thecorrectpicture,

farmministerSharad

Pawarsaid. Page10

Inthenews

IndianR&DboostedMicrosoftincome,payup:Taxman

UPA-BJPmeetingclears landmines,BillgoestoHousenow

Leg-upforKarnatakamining,let-downforVedanta inOrissa

AFTER MEETINGUPA MANAGERS,BJPS SUSHMASWARAJ SAIDHER PARTY

WOULDNOWSUPPORTTHE LAND BILL

CENTRE OKAYSR12,000-CROREBIHAR PACKAGETHEgovernmenton

Thursdayapproved the

continuation ofthe

special planforBihartill

theendofthe12thFive-

YearPlan andallocated

R12,000crore forthe

entirePlan period.The

move,aheadof the2014

polls,comes ata time

whenthe state'schief

minister,NitishKumar,

akey oppositionally,is

demandingspecial

statusfor Bihar.

Continuedon Page2

DAhikefor central

employees,Page2

I-T ADDSR5,100 CR TO MICROSOFTINCOMEBETWEENFY06 ANDFY09; SAYS MARGINS AREHIGHER, MOREHIGH-VALUE WORK DONEHERE

B U S I N E S S

P4 P9 P17DIGITALSPACETOBE NEWGROWTHAREAFOR ITINDUSTRY,SAYSTCSMD&CEON CHANDRASEKARAN

C O R P O R A T E S

APPLESSLOWDOWNCASTSGLOOMOVER$30-BILLIONWEBOFGLOBALCOMPONENTSUPPLIERS

Sebievaluatesintroducing

T+1settlementcycle

M O N E Y & M A R K E T S

BANGALORE FRIDAY APRIL 19 2013V O L X X V N O 3 0 2 1 8 P A G E S I R s 4 . 0 0

READ TOLEAD

P U B L I S H E D F R O M : A H M E D A B A D , C H A N D I G A R H , C H E N N A I , H Y D E R A B A D , KO C H I , KO L KA T A , L U C KN O W, M U M B A I , N E W D E L H I , P U N E

FinancialExpress.com twitter.com/FinancialXpress facebook.com/TheFinancialExpress FinancialExpress/Apps

MenakaDoshi

R20,000 crorein change!

EDIT P6

RESULT COUNTER

feBureau

NewDelhi,April 18

THE Supreme Court

on Thursday eased

some curbs on min-

ing iron ore in Karnataka,

providing partial relief to

minersaswellasthesteelin-

dustry, but in a separate

judgment retained t he ban

onminingbauxiteinOrissa,

dealing a setback for the

state government and AnilAgarwals Vedanta Group.

InDecember,Vedantahadto

shutdownitsaluminarefin-

ery in the Niyamgiri-Lanji-

garhregion.

The apex court, which

had allowed 18 category A

mines (the ones with none

or least illegalities) to re-

sumeminingin September

2012, on Thursday added

around 90 mines falling in

categories A and B to re-

sume mining activities.

However, it cancelled 49

mining leases in category

C, those with maximum il-

legalities.Thecourtsorder

is largely based on the rec-

ommendations of the Cen-

tral Empowered Commit-

teeappointedbyit.

While the resumption of

mininginKarnatakawould

provide some relief from

thenextfiscaltothesteelin-

dustryreelingunder short-

fallof thecrucialrawmate-

rial, there wouldstill beno

oreexports,asthe stategov-

ernment has not issued

transport permits. Among

steel firms, JSW Steel and

Kalyani Steel stand to gain

themostastheydonothave

captive iron ore mines like

state-ownedSteelAuthority

of IndiaandTataSteel.

Seshagiri Rao, joint MD

of JSWSteel,welcomedthe

courts ruling. JSW Steel

welcomes the honourable

SupremeCourtsjudgment

whichwill openup balancecategory A and B mines in

Karnataka region and will

have a positive impact on

thesteelsectorandtheIndi-

aneconomy,he said.

Kalyani Steel closed

15.30% higher onthe BSEat

R42.20, Sandur Manganese

0.32% higher at R328.60 and

Sesa Goa 0.87% higher at

R150.65. JSW Steels shares

closed 2.18% lower at

R716.90, before touching the

dayshighof R738.

ContinuedonPage2

UPcreatescanearrears,filesFIRsagainst sugarmills

MINERAL MATTERAround90minesin categoriesA,B canresumemininginKarnataka;49 withmaximumillegalitiescancelled

Atabout45-50 million tonnes,Karnatakawas Indiassecond-biggestoreproducerbeforethe ban

OrissaMiningCorpmust seekgram sabhanodto startbauxitemining, delayingresumptionof Vedantarefinery

TherefineryhasbeenshutsinceDecemberdueto lackofsupply ofbauxite,whichis a keyrawmaterial

INS

IDE

9Orissa tribalscheerSC verdict9 Karnataka

miningorderputs mettlebackin industry

9 Noheavymetalrespiteforminers,Page29ArcelorMittal & Poscomay getbigboost,Page 5

18

BULLION Last 7 Days

April1 1 12 1 3 1 5 1 6 1 7

Silver,R/kg

45,40052,275

29,470 26,600

300

250Gold,R/10grams

29,470

, 26,600

45,400

52,275

DeepaJainani

Lucknow,April18

THOUGH the states

populist policieshave

created a huge crisis

with farmers taking to the

streets to demand their ar-

rears of R6,200 crore from

loss-making sugar mills, a

nervous Uttar Pradesh gov-

ernment isnow lodgingFIRs

againsttheownersof several

largesugarmills.One general manager of

theMawanaGroup,arrested

last week, has not yet been

given bail. Officials of Bajai

Hindusthan, one of the

states biggest mills,say the

FIRs are against unit heads

and not the promoter. UP

canedepartmentofficialssay

around 45 FIRs have been

lodged under IPC sections

418,420,427,440,465,468,264,

265and120B.

We are closely monitor-

ing the situation. The de-

partment will be forced to

take coercive measures

againstallthosemillswhich

have paid less than 75% o

cane dues. We are also con-

templatingissuingrecovery

certificates to erring mills

and have sought the ap-

provalof higherofficialsfor

it,said canecommissioner

KamranRizvi.

Continuedon Page2

Akhilesh Yadav,UPchief minister

AdanisMundraprojectviolatesgreennorms:MoEF panel

THEREis incontrovertible evidencethat Adanisport andSEZ projectsat Mundra inGujarathaveviolated environmentalnorms,said anenvironmentministrypanel,andsuggestedimposition ofa penaltyon thecompanyfordamagingthe coastalecosystem. Page4

Highlightsof annualsupplementto FTP2009-14

Minimumlandarea formulti-

productSEZ reducedto 500

hectaresfrom1,000 hectares

andfor sector-specificSEZto

50hectaresfrom100 hectares

Nominimumlandreqirement

forsettingup IT/ITeSSEZ

The2% interestsubvention

widenedto includesome

textileitemsand 134sub-sec-

torsof theengineeringsector

Zero-dutyExport Promotion

CapitalGoodsscheme

forall sectors

SOPS TOBOOSTSAGGINGEXPORTS

Last-ditchattempttorescueSEZformulaDifficultto fulfilallwishesof industry:SharmaExportsup6.9%inMarch,P3

SushmaSwaraj,Oppositionleaderin LokSabha

IndusIndBank Q4net

rises38%,Page8

EssarPortsnetrises

fivefold,Page4

BANGALORE