IT : Where tax has already been paid by deductee, no further tax can be collected by deductor, however, interest can be charged from deductor from date of its liability till date of actual tax payment by deductee
Sunday 23 June 2013
Delay in filing appeal not condonable if filed after initiation of recovery proceedings
ST : When assessee decided to file appeal only when Department started pressuring him for payment of dues confirmed by order-in-appeal, there was no bona fide belief on part of assessee and delay in filing appeal cannot be condoned
Assets of Co. to be disposed off rationally after initiation of winding up proceedings against it
CL : Disposition of property after winding-up, if not in ordinary course of business, is to be justified on basis of rationale in terms of transaction
Undisclosed income for entire block can’t be assessed if doc found during search reveal distinct per
IT : Addition for undisclosed income on account of inflated purchase price can be made only for period to which document found during search is related and not for entire block period
Gain on sale of depreciable asset held for more than 36 months can be used to set off other long-ter
IT : Long-term capital loss can be set off against short-term capital gain calculated under section 50 on long-term capital asset
Rupee Depreciates 33 Paise To 59.60 Per Dollar
Indian rupee fell by 33 paise to 59.60 per dollar in early trade Monday as against Friday's closing of 59.27 per dollar.
Rajeev Malik of CLSA expects the rupee to depreciate further, but the trajectory won't be a straight line.
"Given the recent outsized rupee move, it will find some near-term respite because of more measures to encourage capital inflows and the anticipated improvement in the CAD (current account deficit)," he added.
According to him, the rupee could break above 60/USD in early 2014 and possibly depreciate to 62-65/USD.
Source:-www.moneycontrol.com
India’S Polished Diamond Exports Up 43% In May
23-Jun-2013
In May 2013, polished diamond exports out of India increased in value by 43 percent (on y-o-y basis) to $1.78 billion, while it rose 27 percent in volume terms to 3.262 million carats, reports say. Imports of polished diamonds rose more than three times to $536.98 million, The country’s net polished exports, (valued as excess of exports over imports), was up 19 percent to $1.243 billion, reports add.
In the said month, rough diamond imports rose in value terms, by 45 percent to $1.640 billion and rough diamond exports increased 15 percent to $134.56 million. The net rough imports (valued as excess of imports over exports), was up 48 percent to $1.506 billion, reports add.
The country’s net diamond account dropped into a deficit of $263.1 million (the same being in a surplus worth $29.1 million in May 2012).
Source:-www.diamondworld.ne
Cheap Imports May Hit Domestic Sugar Industry
THE glut in global sugar production and the consequent sharp fall in international prices may come as good news for consumers in India — the world’s largest consumer of the sweetener. But sugar mills here are worried that their losses will mount with growing imports.
World sugar production is expected to surge to an all-time high of 181.7 million tonnes this year on the back of record production in Brazil, the world’s largest producer, Mexico and the US, according to the International Sugar Organisation (ISO). This will be 10 million tonnes more than last year’s consumption, leading to nearly 56 million tonnes of sugar being available for exports globally.
The sugar surplus has led to a steep fall in international prices to the lowest level in nearly three years. India is expected to import almost 1.5 million tonnes of sugar during the year, including about 500,000 tonnes for domestic consumption (the balance of raw sugar will be processed by refiners and re-exported).
The sugar industry has sounded the alarm bell and demanded a hike in import duty on sugar. According to Vinay Kumar, managing director, National Federation of Cooperative Sugar Factories, inventories could jump by 9.7 million tonnes. This could leave an exportable surplus of nearly four million tonnes, though India’s sugar exports have declined sharply in recent years.
The sugar industry is demanding a stiff hike in tariffs from 10 per cent to 40 per cent. There is disagreement even within the United Progressive Alliance (UPA) government on the sugar issue. While agriculture minister Sharad Pawar of the Nationalist Congress Party (NCP), which has close ties to cane growers in western Maharashtra, has sought a hike in duty, finance minister P. Chidambaram and food minister K.V. Thomas are opposed to such a move.
Pawar recently wrote to Chidambaram noting that the arrears of sugar mills to cane growers is mounting and has crossed the Rs100 billion-mark. But the finance minister has refused to hike the duty, arguing that it could lead to a spurt in inflation. The UPA government has managed to curb food price inflation in recent weeks and is wary of another round of price hikes.
The finance ministry wants imports to continue as sugar prices have been decontrolled and if prices start rising it would not be able to intervene. Following the partial decontrol, factories are not obliged to sell sugar to the government’s public distribution system (PDS) at a subsidy. The central government will provide subsidies to state governments to acquire sugar from the open market for the PDS.
*****
INDIA’S sugar production in marketing year 2012-13 (which ends in September) is expected to be around 24.5 million tonnes. Domestic demand is pegged at around 22 million tonnes. Last year’s drought in the two key sugarcane producing states of Maharashtra and Karnataka – which led to lower sowing operations earlier this year – is expected to lead to a slight fall in production.
Though the early onset of the south west monsoon and the copious rains that have been recorded in most states should have resulted in higher production next year, farmers will not be able to take advantage of the rains as the acreage is already lower this year – from 4.68 million hectares last June to 4.2 million hectares at present.
Vidya Murkumbi, chairperson, Shree Renuka Sugars, a leading producer, estimates that sugar production would decline by another ten per cent in marketing year 2013-14, as the area under the crop has fallen drastically in the two states.
Food minister Thomas says the government does not want to hike import duties at least until September, as it does not want prices to surge.
But the industry questions the need to continue with exports. Abinash Verma, director-general, Indian Sugar Mills Association (ISMA), says the duty should be hiked to at least 30 per cent.
For the industry, this has been a bad year with estimates that its losses would mount to over Rs10 billion. According to research agency Crisil, while the average price paid by the mills to cane growers went up by 14 per cent, the price of sugar increased by just three per cent annually during the last three years.
“We expect the industry’s net losses to increase to over Rs10 billion in sugar season 2012-13 due to the widening gap between sugarcane and sugar prices,” says Crisil.
“For sugar season 2013-14, the central government has announced a 24 per cent hike in the minimum price payable for sugarcane, whereas as per our estimates, the increase in sugar prices is likely to be only 8-9 per cent. The financial performance of sugar mills will, therefore, deteriorate,” it adds.
Sugar and sugarcane pricing is a very complicated issue in India, and with powerful lobbies backing politicians in different states, there is distortion in pricing. A committee led by C. Rangarajan, chairman of the Economic Advisory Council to the Prime Minister, had suggested that the state-advised price (SAP) for sugarcane be abolished. The committee also recommended that sugarcane prices should be linked to the price of sugar and not the other way round.
But the government has not implemented that part of the report on the decontrol of sugar. And in the politically important states of Uttar Pradesh and Tamil Nadu (which are also major cane growers), the SAP is higher than the Fair and Remunerative Price (FRP) for cane as recommended by the centre.
* * * * *
BUT the partial decontrol of sugar will lead to a more positive operating and investment climate for sugar companies.
“These developments will bring greater freedom for domestic sugar players,” says Asitava Sen, senior director and head of food and agribusiness research and advisory at Rabobank Group, India. “It will allow them to sell more sugar in domestic markets and export at will, leading to increased revenues and improved operating margins.”
But the recent reforms still sidestep the major structural problems in the sugar sector concerning the value chain of key raw materials, such as the procurement price for sugarcane, command area and minimum distance between mills, says Sen. “Overall we project an optimistic, although cautious, outlook for the industry in the wake of these reforms.”
The end of the levy sugar obligation (under which companies were required to sell 10 per cent of their production to the government for supply to the PDS at a discount of approximately 40 per cent) has freed Indian sugar mills from this ‘social responsibility.’
Rabobank expects sugar mills to benefit directly from the lifting of the levy sugar obligation as they will be free to decide the quantity and destination of supply based on market factors of production, demand, inventory and prices.
According to Rabobank, the medium-term outlook for the sugar sector is moderately positive. Partial decontrol of the sector will bring in better demand and supply visibility for sugar mills and improve the overall investment sentiment in the sector. This is expected to drive forward contracts, greater competitiveness and industry consolidation.
The sugar industry is also hoping that the oil ministry will enhance the sourcing of ethanol from domestic producers. Recently, the ministry rejected the bids by international suppliers for its ethanol blending programme (EBP), after it found the prices to be ‘exorbitant.’
Last November, the Indian government had made sale of five per cent ethanol blended petrol mandatory from June 30. State-owned oil companies had floated global and domestic tenders to get the biofuel. But the domestic industry could meet only half of the 1.05 billion litres of ethanol.
Oil minister Veerappa Moily has rejected the global tenders for supply of 800 million litres of ethanol as the prices were exorbitant. “I cannot allow petrol prices to go up because of the EBP,” he says. “We will float fresh tenders and encourage the Indian sugar industry to supply ethanol at much cheaper rates compared to international suppliers.”
Source:-x.dawn.com
Matter remanded to decide fate of AMP exp. incurred on behalf of AE in light of SB ruling in LG's ca
IT/ILT: Matter relating to adjustment in respect of AMP expenditure incurred by assessee on behalf of it AE for brand promotion was to be remanded back for disposal afresh in light of guidelines issued by Special Bench in case of LG Electronics India (P.) Ltd. v. Asstt. CIT [2013] 29 taxmann.com 300/140 ITD 41 (Delhi)
Demat transmission in Hindu Undivided Family (HUF )
In a Hindu Undivided Family (HUF), the seniormost surviving member becomes the karta on the death of the existing karta . The transmission formalities need to be initiated by the surviving members of the HUF in order to effect the transfer of securities from the demat account of the deceased karta to the new karta, or members accounts, as the case may be.
Form
The surviving members of the HUF need to fill a transmission form. The details of securities held by the deceased karta on behalf of the HUF have to be listed in the form, along with the ISIN. The detials of the depository participant's account, to which these securities are to be transferred, must also be mentioned.
Documents
For securities less than Rs 10 Lakh, the original or notarised copy of death certificate, an indemnity bond on a Rs200 non-judicial stamp paper, a notarised affidavit and verification on a Rs100 non-judicial stamp paper, and declaration of the new karta must be submitted. For securities over Rs10 lakh, the court decree and deed of partition must be submitted along with the original or notarised copy of the death certificate.
Separation of HUF
If on the death of the karta, the HUF faces a separation or partition, a certified true copy of the settlement deed/deed of partition/decree of the relevant court, duly stamped for dealing in securities in the beneficiary owner's account, held by the deceased karta, needs to be provided. Scrutiny & transfer After the mandatory scrutiny of the information, the necessary transfer of securities to the beneficiary accounts and changes in the records are carried out.
Points to note
After the amendment to the Hindu Succession Act in 2005, if the senior-most member, after the karta's death, is a daughter, she will become the karta of the HUF.
However, the karta's widow is not a co-parcener in his HUF and cannot become the karta.
(The content on this page is courtesy Centre for Investment Education and Learning (CIEL). Contributions by Girija Gadre and Arti Bhargava.)
Can distributors also be good advisers?
By: Uma Shashikant
Several of my adviser friends contacted me after reading my previous column. They belong to the category of advisers, who are struggling to be identified and differentiated. They have a business that is not too big, but brings them and their clients, great satisfaction. They represent the unique optimism this country holds in its numerous small entrepreneurs.
They continue to earn their commissions from producers, whose products they distribute, but cringe on being identified as distributors. How should one identify and deal with this class without dumping them as salesmen? First, these advisers are compliant with the know your distributor (KYD) norms of the Association of Mutual Funds of India ( Amfi), and have obtained their EUIN, the new number that enables identifying a distributor with a sale. They will not pass back the commissions since they believe they have earned these.
They will also have a clean business structure that may be a sole proprietorship, but pays tax and is compliant. They may not have the finances and capability to record each transaction, keep records for several years, or have an internal audit that approves all their vouchers, but if you speak to them about their work, you will realise that they are serious about their profession and are in it for the long term.
They invest in themselves and ensure a longterm orientation for their business before persuading their investors to seek a similar orientation. Second, they will make a factual case for the products they bring to you. Instead of leaning only on literature provided by manufacturers, they will conduct their own research.
The quality and intensity of research may vary, but they will know the product's basics, they will be able to tell you how it works in rising and falling markets, the return you can expect, and the risks you may have to bear. They will explain what you should expect from the product, without getting into the generalities about why equity is always good and how the fund manager is the best among his peers.
Interacting with them will be a learning experience for you, and over time, they will help you pitch your expectations realistically. Third, they will be willing to provide you the information you need. Before they come to meet you, they would have done their homework. If you want to know about the short-term debt fund with the lowest expense ratio and exit load, they will be able to give you a precise answer.
They will be able to compare, provide alternatives, and help you see the choices you have and how you can exercise them. If you ask them questions on technicalities, which may require expert interpretation, they will not pose as knowledgeable, but will promise to return to you after consultations, and keep the promise.
They will always support the information they provide with data. Fourth, they will complete your paperwork meticulously and without error. While you may still sign only the forms and cheques, they will provide you with correct and complete information required for your taxation, report your portfolio's performance periodically, and enable you to keep tabs on your investments easily.
They may not have the sophisticated systems to generate fancy reports, but they will be able to provide you with accurate and neat information that you may require. Why should investors deal with such people, who are distributors and earn commissions? Investors need to understand that the advisory profession is in transition, and labels may mean much, yet.
How to survive fraud attack on your bank accounts
By Preeti Kulkarni, ET Bureau | 24 Jun, 2013, 03.22AM IST
Many bank customers were a bit concerned when they heard that fraudsters cleared off Rs13 lakh a few days ago from 29 Axis Bank accounts, including the Mumbai police's salary accounts. In fact, in the past few months there were many instances of ATM, card and online frauds. Naturally, many people are wondering whether they will be the next victims of some fraudsters.
"Suspicious transactions arise from two aspects — card-present-transactions such as withdrawals from ATM or cards swiped at stores and cardnot-present transactions such as purchases through internet and mail order or over the phone," says VN Kulkarni, chief credit counselor with the Bank of India-backed Abhay Credit Counselling Centre. Scamsters resort to methods like skimming (duplicating the card), phishing (securing sensitive details over email), vishing (getting the details from customers over phone) to compromise your cards. Skimming, or cloning, usually takes place at point-of-sale terminals at shopping outlets and in case of phishing, customers are duped into revealing their confidential information over e-mails.
DEALING WITH FRAUDS
The first step, of course, is to intimate the bank of the fraud or suspicious transaction at the earliest. "As soon as customers get to know that a fraud has occurred, they should report the matter to the bank quickly — through phone, e-mail or in person and take an acknowledgment from the bank. On its part, the bank should immediately take steps to control the damage inflicted by the fraud and also ensure that no further harm is done to customers' interests. An investigation should immediately be conducted by an appropriate authority of the bank, independent of its IT department. If the bank is unable to prove that the customer is specifically responsible for the fraud by compromising his password or in any other manner, it should compensate the customer adequately and fairly," says AC Mahajan, chairman, the Banking Codes and Standards Board of India (BCSBI). "The onus is on the bank to prove that the customer is at fault — only then can the customer be held responsible. The BCSBI code is silent on IT frauds at present, but the code is under revision and the matter has already been taken up for discussion by the committee appointed to recommend revisions to the code," adds Mahajan.
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