The companies had allegedly lent money to the company founder Ramalinga Raju, who is currently in jail.

The receipt of the notices is supposed to be a major setback for Mahindra Satyam and its efforts to salvage the lose pride of the company.

As per the notices received from the 37 companies, the money was given to Satyam Computer as temporary advance. The notices have claimed the return of money to “repay creditors,” some of whom include Maytas Properties Ltd and Maytas Infra Ltd.

Satyam Computer has replied to the legal notices and according to its reply on November 14, 2009, the claims were not legally tenable. Apparently, Ramalinga Raju’s confession letter had also contained information related to the money received from the 37 companies.

The money Raju received from the 37 companies remained an understated liability and was never on the books of Satyam. Recently, companies such as IL&FS, have asked Mahindra Satyam to show them the money they owed to the company as debts on the company’s account sheets.

It will be tough for the lenders to get their money back, since  the transaction was not carried out in the public domain and, therefore, the circumstances under which lent money was lent to Raju is unclear.

IL&FS, the new owner of Maytas Infra, had recently written to Mahindra Satyam showing the company proof of a transfer of Rs 20 crore through two front companies — Angeerasa Greenfields and Saptaswara AgroFarm — on July 31, 2008, into Satyam accounts through the Hyderabad branch of Axis Bank.

The new tax code is to be put into operation from April 1, 2011.

The new DTC will lead to actual taxation only when the money is finally withdrawn for consumption or when money is switched to some other type of investment.

According to experts, with the widespread use of computers, PAN numbers and central information repositories, the accounting should not pose any major problem.

In fact, the concept already exists in one form or the other in many countries. In fact, India’s New Pension System (NPS) follows the same system.

Members of the New Pension System can now switch between different asset mixes and investment managers that are provided by the Pension Fund Regulatory and Development Authority (PFRDA), and this switch is not treated as a withdrawal. If such a system becomes applicable to for non-pension savings as well, the new Direct Tax Code will not turn out to be a hurdle to one’s investments.

Even as all the changes proposed are meant to usher in a change for the better, experts say, the new Code curbs the mobility of one’s investments by rendering them not only less manageable but also less profitable. In other words, in the new scheme of things, these savings will continue to be represented as individual investments and not as an investment account.

Meanwhile, a section of the senior officers of the revenue service have opposed the draft of the Direct Taxes Code, alleging that it is an attempt at making the Central Board of Direct Taxes (CBDT) “toothless.”

According to reports, these revenue officers – a majority of them from the Income Tax Department in Mumbai – are of the opinion that the DTC has recommended that CBDT’s powers to issue circulars or notifications or even make amendments be taken away.

Also, these officers – who included Chief Commissioners and Commissioners of the Income Tax Department – reportedly charged those who drafted the new Direct Taxes Code with having “ulterior motives” in diluting the powers of the Central Board of Direct Taxes. Besides, these officers are sore that the CBDT, which has been responsible for dealing with direct-tax revenue, was not involved in the task of preparing the new Direct Taxes Code.

The proposals in the Direct Taxes Code for Personal Taxation and Income from House Property are as follows:

PERSONAL TAXATION

Moderation of tax rates and increase in tax slabs proposed; new beneficial tax slabs are to be introduced (which will reduce the tax burden for individuals); and peak rate of 30% applicable on income exceeding Rs 25 lakh.

Definition of residency and scope of income

The definition of residence is to be changed. A separate category of ‘Not Ordinarily Resident’ and additional condition of 729 days to ascertain residency will be abolished. There will be only 2 categories of taxpayers proposed, namely, ‘Residents’ and ‘Non-residents.’ Residents are to be taxed only on India-sourced income for an initial period of 2 two years, provided they qualify as a ‘non-resident’ in the preceding 9 financial years.

INCOME FROM HOUSE PROPERTY

Gross rent is proposed to be calculated as higher of contractual rent or a presumptive rate of 6% of ratable value/construction/acquisition cost.

Deduction towards interest on housing loan on self-occupied property is not available. Deduction for repairs and maintenance is to be reduced to 20% of the gross rent.

Service tax deductible on payment basis

Exempt-Exempt-Tax (EET) regime proposed for savings scheme. All long-term retrial savings schemes are to be moved to the EET regime. Contributions (both by employee and employer) of up to Rs 3 lakh to any account with permitted savings intermediaries are proposed to be deductible. Accretion of income will take place till withdrawal is exempt. Any withdrawal made under any circumstances is taxable. Withdrawals pertaining to approved Employee Provident Fund-accumulated balance as on March 31, 2011, and accretions thereon are not taxable.

Savings from one eligible savings scheme to another are not to be treated as a withdrawal. Permitted savings intermediaries will include approved Provident and Superannuation funds, life insurer and New Pension System Trust.

Other deductions

Aggregate deductions for the long-term eligible savings referred above, along with tuition fees paid, are to be raised from Rs 1 lakh to Rs 3 lakh. No further investments are eligible.

The members of the Aviators Guild said that they are firm on their demand to take back the dismissed pilots and are willing to hold talks with the management but that they will not disband their union.

Jet Airways canceled a total of 224 domestic flights and 26 international flights operating out of various cities on September 9, 2009, even as Naresh Goyal, chairman of Jet Airways, said in a television interview that the carrier “cannot be taken hostage by the pilots.”

Naresh Goyal added that the inconvenienced passengers of the cancelled flights were being accommodated on other foreign and domestic airlines.

Several hundreds of passengers were left stranded.

Jet Airways has promised the passengers of the disrupted flights that they will be given full refund of their tickets. In the alternative, these passengers will be allowed to rebook flights without any penalty.

However, Jet Airways’ flights to the United Kingdom, North America and Europe will operate as scheduled, as spokesman of the airline said in a statement.

According to Saroj Dutta, executive director of Jet Airways, the pilots’ refusal to budge from their stand is “causing a great deal of discomfort to passengers as well as financial loss to the airline.” He said Jet Airways is losing around US $6 million each day on account of the pilots’ strike.

Meanwhile, on a petition by Jet Airways, the Bombay High Court issued a notice of contempt of court to the pilots union for going ahead with the strike despite an earlier court order restraining them from striking work.

Justice Dhananjay Chandrachud, who issued the contempt of court notice, has sought a reply from the pilots union by September 14, 2009.

A division bench of the Bombay High Court, comprising Chief Justice Swatanter Kumar and Justice A M Khanwilkar, had, on September 8, 2009, restrained the pilots union from continuing the strike.

Jet Airways had moved the court after the pilots went on mass sick leave on September 7, 2009, in protest against the dismissal of two pilots.

Meanwhile, Air India has decided to fly a special plane to carry the Indian cricket team to Colombo. The team, scheduled to go to Colombo on September 9, 2009, by a Jet Airways flight, is to participate in the tri-nation one-day series to be held there.