Tribute to Hari- A Tax wonder by K.R.Sekar- on 25^th January 2019

Hari- An Outstanding Professional

This is the blog i wrote on 25th January 2019 and today i received Hari's video on his experiences with His Holiness Maha Periyava of Kanchi Kamakoti Peetam. My memory went back to him and i thought i could reproduce my tribute to Hari which i wrote on 25th January 2019 to the great man who is always in my memory for the good he has done to me in my life. Never ever i can forget his contribution to me as "Tax Professional".

Blog wrote on 25th January 2019

Yesterday I received very sad news of the unfortunate demise of S.Hariharan affectionately called as Hari by his friends and colleagues. Truly an outstanding soul. I use this column to write about a great noble soul who lead a principled life in the field of taxation for more than 40 years. Very few people will transfer knowledge values and to people who worked under him and Hari is one of the rarest jewels who did that.  

Through this personal column I express my gratitude to a person who nurtured me in my formative years and due to that I learnt the nuances of taxation, nuances of representation and above all values and integrity which are core to a person success.

Today lot of people appreciate me for my tax skills and professional skills and in my humble view this is possible only because my training under him in my first five years of my post qualification life and my continued association with him till few year back.

I started my career under Hari in Sanmar group in 1989 as Executive Taxation. Hari was Senior Manager Taxation at that time and heading Corporate Tax Cell of Sanmar Group. His knowledge on Tax in 1988 was ahead of the times and his technical and analytical skills were brilliant.

He along with V.Ranga of TI (later Ranga of EY), Ramanujam’ of UB, R Sekar of Kothari Group, Joseph Nathan of EID Parry R. Anand of TVS formed Tax Executives Forum in Chennai. Hari took me under his radar, introduced me to everyone and the association with each one continues even today.

His knowledge on tax was ahead of the times. His clarity of thought, humility coupled with boldness and firmness with which he used to argue the issues was extraordinary.

Few instances of his achievements

First reverse merger - Merger of loss making subsidiary into profit making along with and change of name was done in 1989. I worked with him n the entire project and when we met Mr. N.V. Iyer, an eminent Chartered Accountant for his advice and opinion, Mr. N.V. Iyer blessed the restructuring in few minutes as Hari has covered all aspects comprehensively including Income-Tax Act, MRTP, Companies Act, Accounting etc.

Even before the Mumbai HC ruling on Hindustan Petroleum Corporation Limited, Hari conceptualized the treatment of unabsorbed depreciation in the case of amalgamation by adding to WDV of assets of the amalgamated company. Hari used the definition of “allowed” as explained by SC in Dharmapur Leather Co Limited and took a positon which was accepted by Mumbai HC.

Interpretation of 115J when it was introduced in 1988. His interpretation of 115J was ahead of other professionals whether it was constitutional validity or comparison of 115J to Section 32AB (Investment deposit account)in the context of schedule VI to Companies Act 1956 etc.  He articulated the views of Industry on MAT and issues and challenges in MAT eloquently before the then MOF and CBDT members.

 Hari brought a new interpretation on 115J which department found difficult to overcome- Hari took the department by surprise by arguing that as 115J uses the word "or" at the end of every addition and therefore Hari argued that only one item should be added back to book profit and not all the items as listed under section 115J.

Hari conceptualized Slump sale and De-merger much before it was brought in Income-tax act under 2(19AA) and 2(42C).  Those days we used to have MRTP act and every restructuring would have to pass the MRTP act in addition to Income-Tax Act. When I worked with Hari I could not conclude on any restructuring without applying MRTP provisions. His belief was that tax professional should have a complete views on all legislations that impact Merger and not only tax laws. This basic lesson has helped me in my professional life.

Now people talk about Most Favored Nation clause under Double Taxation Avoidance Agreement. Hari applied this concept in 1988 itself. Those days if Companies had to make a remittance of TKH fee or Royalty they needed to take Tax Clearance Certificate from Assessing Officer and the AO would give a certificate confirming that correct rate of tax was applied on payment. In 1988 we never had the benefit of Section 90(2) of Income-tax Act 1961. Hari used one circular issued by Government of India in the context of Treaty with Federal Republic of Germany (West Germany) and convinced the AO/CCIT to issue NOC for remittance of royalty at treaty rates instead of 115A rates as those days rates under 115A was 30%.

Hari had a revolutionary thoughts in interpreting tax credit under DTAA. When we had the issue of computing Tax Credit in the context of TKH fee received from foreign company as those amounts were eligible for deduction under section 80-O. At the same time we used to have Surtax. We had Surtax Act till 1988 and definition of tax under DTAA includes Surtax. In other words a domestic company in receipt of income from foreign sources will get tax credit under Surtax in addition to Income-tax. How it should be done was conceptualized by Hari and Chennai ITAT ruling in Durametallic India Limited was a classic case on this point.

Today people talk about whether section 79 will override 72A or vice-versa. Hari worked on this in 1988 and we took position in 1989 and basis that we implemented multiple structures.

Hari’s ability in foreseeing the questions and preparing appeal papers, arguments before  CIT(A) and ITAT were really commendable. As an Executive and Senior Executive I learnt these nuances which help me even now when I appear before authorities.

Hari’s presentation on “Tax Reforms-lessons and way-forward” in 1990 at All India ICAI conference took the entire audience by storm and later MOF and CBDT members used to call Hari on this subject. Since I was working under Hari, I had an opportunity to meet various MOF and CBDT officials which helped me to understand the nuances of representation before government officials.

I not only learnt interpretation and interplay of sections and case laws but the way he used to handle Provision for Tax was a treat. Three types of reconciliations for Provisions of Taxation was insisted upon. One with Return of Income, One with Advance Tax and other with latest order passed by AO. Each reconciliations will throw the issues and it will help the tax professionals to understand the position need to be adopted. Hari practiced Fin 48 test even before it was introduced.

Not only on tax technical skills. He is the first person to advise me that if one needs to be successful as a tax professional, individual credibility should be high and one should never mislead the department. He truly lived to that.

I cannot forget the days when he used to allow me to represent before CIT(A) in my second year of my career,  recommending my name for promotion on completion of first year which was rare in Sanmar group those days. A person who completely trusted me and allowed me to work and interact with CFO's of Sanmar group companies. Not only in tax but his lessons to me on integrity and values were very high which helps me even now. I can keep talking about my learnings with him, as each experience has left an indelible mark on me.

When i left Sanmar grouo in 1992 and joined Nagarjuna Group he asked me to promise him on two points on the photo of Mahaperiaya. (1) I should not smoke till my last (2) I should not drink or touch alcohol. I have honoured my promise to him so far. He believed that unnecessary habits will make the person to lose his focus. Though you are no more Hari but i will keep the promise till my last breath.  If he is alive today he will be happy to know my devotion to His Holiness as he is truly an inspiring person for me when it comes to devotion to Guru.

Hari, I miss you truly and i remember every one of our days and it is etched in my memory and it will stay with me till my last breath. You taught me not only tax but also the values and principles which made me to be what I am now. In every aspect of my life whether it is tax technical skill, tax representation skill, tax writing skill, public speaking skill, Hari had a role to play. If I had not got an opportunity to work under Hari in my formative and initial days I don’t know whether I would have achieved any success in my life.  If every person gets an opportunity to work with a person like Hari, he will be successful in his professional life. I am an example for this.

Words cannot explain my emotions my feelings today and i am sure for all the good you have done and your devotion to Kanchi Mahaperiyava you will go directly to Heaven. Heaven will be enriched by your presence. Truly i miss you.

Hari- Thanks to you for all the good that you have done to me. Thanks is a simple word and my heart is filled with emotions today on your demise. May your soul rest in peace.

 

I started my career under Hari in Sanmar group in 1989 as Exeucitve Taxation. His knoweldge on Tax in 1988 was ahead of time and his technical and analytical skills were brilliant. He along with Ranga of TI (later Ranga of EY), Ramanujam of UB, R Sekar of Kothari Group and Jospeh Nathan of EID Parry R. Anand of TVS formed powerful ggroup of Tax Exectives in Chennai. Hari took me under him and introduced me to every one them and the association with every one of them continues even today for me.

His knowledge on tax was ahead of time. Few instances of his knowelde and his achievments
First reverse meger -Merger of loss making subsidiary into profit making and chaning the name was done in 1988.

Even before the Mumbai HC ruling on Hindustan Petroloem Corporation Limited, Hari conceptualised treatment of unabsorbed depreciation by adding to WDV of amalgamted assets.

Interpretation of 115J when it was introduced in 1988. Use of revaluation of assets and more important an interpretation which department found it difficult to overcome- Hari took the department by surprise by arguing that as 115J uses the word "or" at the end of every addition, Hari argued that only one item should be added back to book profit and not all the items.
Slump sale vs De-merger was done even before it was brought in Income-tax act under 2(19AA) and 2(42C).

Now people talk about MFN clause under DTAA. Hari brought this concept in 1988. Those days if Companies had to make a remittance of TKH fee or Royalty they need to take Tax Clerance Certificate wherein AO will give a certificate confirming that correct rate of tax was applied on payment. In 1988 we never had the beenfir of Section 90(2). Hari uised one circualr issused by GOI under the context of Treaty with FRG( West Germany) and convinced the AO/CCIT to issue NOC for remittance of royalty at treaty rates instead of 115A rates as those days rates under 115A was 30%.

How Tax credit is to be applied when we have Income Tax and Sur-Tax. We had Surtax till 1988. The defintion of tax under DTA includes Surtax. How it should be done was conceptualsied by Hari. Chennai ITAT ruling on Durametallic India Limited is to this point.

I still remeber tax planning structures using PSI companies status by leveraging on defitnion under section 2(18). Today people talk about whether section 79 will override 72A or vice-versa. Hari worked on this in 1988 and we implemented the structure.

I can keep saying and continue to say as i remember everyday that i worked with him. I not only learnt interpretation and interplay of sections and case laws but the way he used to handle Provsion for Tax was a treat. Three typses of reconciliations and each recociliations will throw the issues and it will reveal the position that as a tax professional we need to adopt

Not only on tax technical skills. He is the first person to tell me that if one need to be suceessful in departmenr individual credblity should be high and never ever one should mislead the department. He truly lived to that.

I cannot forget the days when he used to allow me to represent before CIT(A) in my second year of my career itself and recomending my name for promtion on completion of first year which was rare in Sanmar group those days. A person who completely trusted me and allowed me to work and interact with CFO's of Sanmar group companies.
Not only in tax but his lessons to me on integrity and values were very very high which helped and helps me even now.
When i left Sanmar grouo in 1992 and joined Nagarjuna Group he asked me to promise him on two points (1) I should not smoke till my last (ii) I shouild not drink or touch alcohocol till my last. I committed to him and till this minute i have honoured my word to him. He belived that bad habits will make the person to lose his focus. But that promise helped me lot and even now it helps me. Though you are no more Hari but i will keep the promise till my last breath.

When my mother was not well in 1992 he along with P.U.Aravind Now Executive President of Sanmar group and Suresh Rao then Partner P.Brahmaya &Co spoke to best doctors to ensure that my mom got best treatment and also at lower cost. I can never forget those days.

Nobody knows why my eldest son is named as Hariharan. When he was born i wanted to name after Lord Ayyappa and also to have name of Hari. God grace my guru suggested Hariharan and i immediately accepted because of my gratitude to him. I am sure my son Hari will also have same values, knwoedlge like you Hari,

Hari, I miss you truly and i remeber every one of our days and it is etched in my memory and it will stay with me till my last breath. You taught me, you pampered me in my formative years which made me to expect simlar pampering from my subseuquent bosses like R.Krishnan of Nagarjuna Group and MLN from Deloitte. If every person gets an opportunity to work with a person like you he will be succesful in his professional life. I am an example for this.

Words cannot explain my emotions my feelings today and i am sure for all the good you have done and your devotion to Mahaperiyava you wll go directly to Heaven. Heaven will be enriched by your presence. Truly i miss you.

Hari- Thanks to you for all the good that you have done to me. Thanks is a simple word and my heart is filled with emotions today on your demise. May your soul rest in peace.