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Newsletter: ABC

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Indian law firms are famously enamoured with the letters of the alphabet. But is it rubbing off on the Indian tax office?

Last week's raids on ALMT and AZB are either one-offs or India's Income Tax Department (IT) is starting to work its way down the Mumbai alphabet.

Sources at the firms have stated that the tax authorities were not after the firms' own tax affairs but were in fact trying to uncover client information.

Details of exactly what they were looking for is not clear, although one source suggested it was related to offshore tax structures, which were cracked down on hard in the Vodafone-Essar deal.

Whatever the reason, the IT has been treating Indian lawyers with kid gloves for the most part, despite its aggressive reputation. After all, no sane Government official wants to be respondent in court to an angry lawyer standing on home turf.

Almost 20 years ago senior advocate Lala Ram Gupta's residence was subject to an "over zealous" raid by the IT. Instructing Harish Salve, Gupta promptly dragged the department to the Delhi High Court and won his jewellery and several lakhs of his cash back (L.R. Gupta vs. Union of India and Ors 1991).

Ashurst's fledgling Delhi operation was also raided in the 90s by the IT in another chapter of the firm's long-running war of attrition with those opposed to the entry of foreign firms.

For the most part, however, lawyers have been safe.

So do the latest raids mark a revival in the IT's confidence? And what of client confidentiality?

If more fishing expeditions were to follow and the department is indeed working its way down the Mumbai alphabet, Bharucha & Partners would not have to wait long.

This week, in any case, the Bharucha has had reason to celebrate after laterally hiring its first new equity partner since going independent from Amarchand a little over a year ago; further expansion is on the cards.

In Calcutta the market is showing signs of movement with one of the Khaitan clan's latest brand-name operations targeting cautious growth. That is despite readers on our message board finding the place decidedly unexciting, legally speaking.

Perhaps the tax office should visit the city? After all, Calcutta does follow Bombay, alphabetically speaking.

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The second article in our new Legal Opinion series has gone live, braving a prediction of where India's new Competition Commission will strike first.

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