1. Can't pay tax on fictional income, argues Flipkart
What's the news?
Flipkart has challenged the income-tax department’s demand that it reclassify marketing expenses and discounts as capital expenditure, arguing before the Income Tax Appellate Tribunal (ITAT) that tax cannot be levied on “fictional income”.
The panel was hearing Flipkart’s appeal against a Rs 110 crore tax demand for the financial year 2015-16 following the tax department’s reclassification order that could impact how other consumer internet startups, too, are taxed.
What's the revenue department's argument?
The revenue department’s rationale for requiring Flipkart India’s marketing expenses and discounts to be capitalised is that the company enjoys high valuations driven by its marketing intangibles despite its recurring losses and low fixed-assets base.
Revenue counsel CH Sundar Rao said Flipkart India, despite being a wholesaler selling popular goods, reported losses at the gross profit level. He argued that the company’s motive was to capture the market by creating marketing intangibles in terms of customer base, brands, and trademarks, which, in turn, resulted in its high valuations.
2. Only single-digit salary hikes for Cognizant top brass in 2017
What's the news?
IT services major Cognizant offered single-digit pay hike to its key executives, including CEO Francisco D’Souza, in 2017 as the company linked their compensation with performance and industry growth trends.
Compensations of the company’s top three executives — D’Souza; Rajeev Mehta, president; and Karen McLoughlin, chief financial officer— were raised between 3% and 8% last year. Both D’Souza and Mehta have not received any hike in base salary and annual cash incentive, said the company in its proxy statement filed to US Securities and Exchange Commission.
What's the logic behind that compensation?
Cognizant said compensations for executives were set primarily based on the company’s performance during 2017, 2016 and in previous years and its growth compared to the industry. Anticipated and desired company performance for 2017 and 2018 were based on company and industry projections and goals, individual executive performance and responsibility, and the market for executive talent.
3. Amazon India CFO elevated to the rank of VP
Amazon India has elevated its chief financial officer Raghava Rao to the rank of vice-president, a development that comes amidst India unit’s move towards more fiscal prudence as its operations here mature.
Will there be any change in role?
“There is no change of role — he continues to lead the finance function for Amazon India,” a company spokesperson said.
Rao had joined Amazon in 2014. Before that, he had largely worked at Unilever for about two decades. He has been the chief financial officer for the online e-commerce business at Amazon India, which has been in an intense competition with Flipkart in India.
4. Ola finds a new chief people officer
What's the news?
Ola has hired former Procter & Gamble executive Susheel Balakrishnan as its chief people officer, months after the taxi aggregator launched an investigation into fraud allegations against its former human resources and administration head Yugantar Saikia.
Who is Susheel Balakrishnan?
Balakrishnan, according to his LinkedIn profile, is a managing partner at 720 Transform Consulting, a firm focussed on education, nonprofit, government, and other such sectors. Prior to that, he was chief people officer at MENAPak, which runs Yum! Foods, and earlier was HR associate director at Procter & Gamble, where he worked for over a decade.
What's the news?
Flipkart has challenged the income-tax department’s demand that it reclassify marketing expenses and discounts as capital expenditure, arguing before the Income Tax Appellate Tribunal (ITAT) that tax cannot be levied on “fictional income”.
The panel was hearing Flipkart’s appeal against a Rs 110 crore tax demand for the financial year 2015-16 following the tax department’s reclassification order that could impact how other consumer internet startups, too, are taxed.
What's the revenue department's argument?
The revenue department’s rationale for requiring Flipkart India’s marketing expenses and discounts to be capitalised is that the company enjoys high valuations driven by its marketing intangibles despite its recurring losses and low fixed-assets base.
Revenue counsel CH Sundar Rao said Flipkart India, despite being a wholesaler selling popular goods, reported losses at the gross profit level. He argued that the company’s motive was to capture the market by creating marketing intangibles in terms of customer base, brands, and trademarks, which, in turn, resulted in its high valuations.
2. Only single-digit salary hikes for Cognizant top brass in 2017
What's the news?
IT services major Cognizant offered single-digit pay hike to its key executives, including CEO Francisco D’Souza, in 2017 as the company linked their compensation with performance and industry growth trends.
Compensations of the company’s top three executives — D’Souza; Rajeev Mehta, president; and Karen McLoughlin, chief financial officer— were raised between 3% and 8% last year. Both D’Souza and Mehta have not received any hike in base salary and annual cash incentive, said the company in its proxy statement filed to US Securities and Exchange Commission.
What's the logic behind that compensation?
Cognizant said compensations for executives were set primarily based on the company’s performance during 2017, 2016 and in previous years and its growth compared to the industry. Anticipated and desired company performance for 2017 and 2018 were based on company and industry projections and goals, individual executive performance and responsibility, and the market for executive talent.
3. Amazon India CFO elevated to the rank of VP
Amazon India has elevated its chief financial officer Raghava Rao to the rank of vice-president, a development that comes amidst India unit’s move towards more fiscal prudence as its operations here mature.
Will there be any change in role?
“There is no change of role — he continues to lead the finance function for Amazon India,” a company spokesperson said.
Rao had joined Amazon in 2014. Before that, he had largely worked at Unilever for about two decades. He has been the chief financial officer for the online e-commerce business at Amazon India, which has been in an intense competition with Flipkart in India.
4. Ola finds a new chief people officer
What's the news?
Ola has hired former Procter & Gamble executive Susheel Balakrishnan as its chief people officer, months after the taxi aggregator launched an investigation into fraud allegations against its former human resources and administration head Yugantar Saikia.
Who is Susheel Balakrishnan?
Balakrishnan, according to his LinkedIn profile, is a managing partner at 720 Transform Consulting, a firm focussed on education, nonprofit, government, and other such sectors. Prior to that, he was chief people officer at MENAPak, which runs Yum! Foods, and earlier was HR associate director at Procter & Gamble, where he worked for over a decade.