• NATIONAL

Liability to pay gift tax would be on the shareholder (donor) who exercises the option to renounce and not on the company

The Supreme Court in the Khoday Distilleries case has ruled that the Distillery was not liable to pay gift tax on the allotment of rights issue to its shareholders following a board resolution. The decision of the Karnataka High Court to the contrary was set aside on the appeal of the company. The allotment, said the Supreme Court, meant creation of shares and did not amount to transfer. The Court held that the liability to pay gift tax would be on the shareholder (donor) who exercises the option to renounce and not on the company. Still the tax department has not invoked the gift tax law on the renouncers despite the clarification from the appellate body.

Insurer liable to pay interest in worker's injury case

The Supreme Court set aside the ruling of the Madhya Pradesh High Court in the case, Kamla Chaturvedi vs National Insurance Company and held that an insurance company would be liable to pay interest on the amount insured if there was no contract to the contrary in the context of the Workmen's Compensation Act. The high court had ruled that the insurance company was not liable to pay interest on the award made by the labour court under the Act.

Tax relief for film producers

The Supreme Court set aside the ruling of the Madras High Court which had denied income tax benefits in terms of Section 32AB, Section 80HH and Section 80I of the Income Tax Act to cine film manufacturers in the case of India Cine Agencies vs Commissioner of Income Tax. The matter in issue was the process of conversion of jumbo rolls of photographic films into small rolls of desired sizes. The cine traders argued that they were entitled to the tax benefits as they were manufacturing or producing a new product. The High Court had denied the benefits and therefore the appeal to the Supreme Court which reversed the high court ruling.

Schools fees cannot be taxed by a panchayat: SC

The Supreme Court in the case of Vivekanand School vs President of Zila Panchayat has ruled that the fees collected from students by a school could not be taxed by the panchayat. In this case, the school was imposed tax under the Uttarakhand panchayat law on student fees. The high court upheld the tax imposition on ground that the school was a commercial body. On appeal, the Supreme Court set aside the High Court decision.

Former CJ "AS Anand" to arbitrate in Visa-Continental dispute

Former Chief Justice of India AS Anand has been appointed as sole arbitrator in the dispute between Visa International and Continental Resources. The two companies had executed a MoU in 2005 wherein they agreed to incorporate a company in the name of "VISA Aluminum Ltd" for setting up an integrated Aluminum complex with the help of Orissa Mining Corporation. Thereafter, dispute arose between the two parties and Visa International moved the Supreme Court for appointment of an arbitrator.

• INTERNATIONAL

Tribune files for bankruptcy protection

Media conglomerate Tribune Co. filed for bankruptcy protection as the owner of the Chicago Tribune, the Los Angeles Times, the Chicago Cubs and other properties tries to deal with $13 billion in debt. Severe reductions in advertising this year because of the recession have put pressure on the Chicago-based company. Tribune made the filing in bankruptcy court in Delaware

Congress sends White House auto aid proposal

US Congressional Democrats have sent the White House a draft of a roughly $15 billion auto bailout that is expected to come to a vote this week. The measure would rush bridge loans to Detroit's struggling Big Three Automakers, Daimler Chrysler, General Motors and Ford, and put an overseer chosen by President George W. Bush in charge of monitoring an auto industry restructuring. The overseer could recall the loans as early as February if the carmakers weren't doing enough to reinvent themselves and become viable.

Mutual Legal Assistance treaty okayed

The Cabinet today approved a proposal of the Ministry of Home Affairs to sign the Mutual Legal Assistance treaty in criminal matters between India and Bosnia Herzegovina. The treaty will provide a broad legal framework for bilateral cooperation in the field of security and law enforcement.

Former CJI appointed international arbitrator

Former Chief Justice, VN Khare, has been appointed as arbitrator by the Supreme Court in the dispute between the Chinese company, Everest Holding Ltd, and its Indian counterparts led by the Shrivastava Group. The Indian firms provided cooperation in mining, processing and export of iron ore from their mines. The dispute arose over the alleged cancellation of one of the joint venture agreement between the parties by its Indian partner over reduction of prices.