Sum incurred to acquire copyrights of songs is an allowable revenue exp. for a music company

IT : Where assessee was engaged in business of purchasing audio rights and manufacturing audio cassettes, expenditure incurred in acquisition of audio copyrights and CDs and DVD rights were allowable as revenue expenditure

Writ petitions are generally not maintainable at the stage of show-cause notice, rules HC

ST : When several questions of facts are involved and assessee there is no inherent lack of jurisdiction or gross violation of principles of natural justice on part of adjudicating authority, writ petition directed against show-cause notice is to be rejected

Winding up petition admitted as companies failed to pay an admitted liability

CL: Admission of liability but failure to pay it, invokes winding up provisions

Pre-payment charges for closure of housing loan are eligible for sec. 24 deductions

IT : Prepayment charges for closure of loan account which was taken for acquisition of property fetching extant house property income are allowable under section 24(b)

Chemical Residue Found In Organic Peruvian Bananas

The export of bananas is one of the top economic activities in Piura. There are 5,500 hectares of bananas grown in the region. In 2012 75,000 tons of the fruit were exported bringing in over $74 million. The main destinations are United States, Europe and Japan.



What´s worrying is that if the chemical residue is officially confirmed, the bananas will no longer be considered organic by the international market, which is what the fruits are famous for. Some 6,500 producers will be affected by the change in status.



The type of insecticide has not yet been confirmed, but Peruvian grower associations assume it could be related to an epidemic being called the ? plague of the red spot? a sickness that although it only affects the appearance of the bananas, and not the health of the consumer, does not allow them to export the product. The insecticide could be the farmer’s irresponsible management of the situation.



Director of Agricultural Competitiveness in the Region of Piura, Axel Herrera, points out that they have already lost 30% of their productivity due to the plague and producers’ concern is justified. He also mentions to El Comercio that the plague is an unexpected outcome of climate change.



However, he realizes most producers do not do sufficient research before utilizing insecticides to combat the problem and information about the causes and solutions for the plague could significantly assist the area.

Source:-www.freshplaza.com

Iron Ore Export At Paradip Rises Three Fold

7-Jul-2013

Business Standard reported that coinciding with the weaker rupee regime, iron ore exports from Paradip port surged nearly three times to one million tonne during the first quarter of the current fiscal against the same period a year ago.



During the three month period, 1.03 million tonnes of iron ore fines of 62 grade were exported, compared with just 371,000 tonnes shipped in the previous comparable period.



Mr RK Sharma director general of Federation of Indian Mineral Industries said that "There is no major rush of importers to book Indian iron ore. The rise in exports was just because of the weak rupee as exporters wanted to clear some stocks at ports.”



After the mining ban in Karanataka and curb on exports in Goa, east Indian ports have assumed top positions in terms of iron ore exports. A major part of 18 million tonne annual exports is being shipped from east coast ports such as Paradip, Haldia and Vizag, with Odisha contributing about 4.5 million tonnes.

Source:-www.steelguru.com

U.S. Polished Imports +22% In May

7-Jul-2013

RAPAPORT... Polished diamond imports to the U.S. rose 22 percent year on year to $3.192 billion in May, government data showed. Imports by volume were flat at 1.5 million carats while the average price of imported polished diamonds rose 23 percent to $2,117 per carat. Polished diamond exports grew 13 percent to $1.485 billion as the price per carat increased 45 percent to $1,787 per carat. Net imports, representing the excess of imports over imports, rose 32 percent to $1.707 billion.



Rough diamond imports decreased 4 percent to $53 million and rough exports fell 44 percent to $15 million in May. Net rough imports rose 34 percent to $38 million. The U.S. May net diamond account, representing total imports of rough and polished less total exports, increased 32 percent to $1.669 billion.



Polished diamond imports for the first five months of 2013 rose 13 percent year on year to $10.031 billion, while polished exports increased 12 percent to $7.558 billion. Net polished imports rose 18 percent to $2.473 billion. Rough imports weakened 6 percent to $192 million, while rough exports have slipped 28 percent to $110 million. Net rough imports grew 61 percent to $82 million.



The net diamond account for January through May rose 17 percent to $2.391 billion.

Source:-www.diamonds.net

Tata Motors Eyes Indonesia As Biggest Export Market

Indian automotive giant Tata Motors is looking to start filling Indonesia’s streets with its products later this year in an attempt to make Indonesia its biggest overseas market in the next four years.



Tata Motors will start bringing in both its passenger and commercial vehicles in September, following the official launch of its brand in Indonesia last year.



The firm, which now has six dealers and around 30 to 40 workshops across Java and Bali, expects to have 10 dealers to help its operations by the end of this year and to have built 35 dealerships to cater to potential

customers within five years.



Tata Motors managing director Karl Slym declined to confirm its initial sales target or the number of cars and models to be introduced.



“We do have a very confident feeling because we have spent such a long time on our products, trusting the feedback of our brand and vehicles, otherwise I wouldn’t be suggesting that we can [make Indonesia] the largest market outside India in a very short period of time,” Slym told reporters during a conference in Mumbai last week.



Slym said Tata Motors, which sold 350,000 vehicles outside India during the last financial year, was equipped with 50 years of experience in handling market exports in an attempt to grab a big slice of the Japanese auto-dominated market.



Tata Motors was established in 1945 and started its production in 1954, focusing mainly in commercial cars. It started exporting its products in 1961 and introduced its first passenger car, Indica, in 1998.



With an annual income of US$34.7 billion, the company is currently the fourth-largest commercial vehicle producer in the world and the biggest in India, controlling 65 percent of the domestic market. It is also the third-biggest passenger car producer in India after Japan’s Suzuki and South Korea’s Hyundai, with a 12 percent market share.



Tata Motors, which was listed on the New York Stock Exchange in 2004, acquired the likes of South Korean truck producer Daewoo in 2004 and British premium car maker Jaguar Land Rover in 2008.



With a sluggish car sales trend in India due to a global economic downturn, Tata Motors has attempted to expand its export market.



In line with its expansion plan, Tata considers Indonesia a potential pivot that could one day supply vehicles to the latter’s neighbors, after more than 1 million car sales last year and over 6 percent in annual economic growth since 2010.



Tata Motors Indonesian Operations CEO Biswadev Sengupta said setting up a manufacturing plant was among the company’s expansion ambitions.



“But to open a manufacturing plant, we have to reach a critical mass [of sales] and 40 percent of localization, then we can start producing in Indonesia,” Sengupta said as Tata’s Pune Facility, adding those conditions could be met in two or three years after the launch of the company’s products.



Sengupta said the company would probably introduce seven commercial and passenger vehicle models, while refusing to confirm whether the 600-cc Tata Nano, dubbed the world’s cheapest car priced at roughly $1,800 during its debut in 2009, would be among them.



Tata has, among others, commercial cars Tata Xenon and Tata Ace, and passenger cars Tata Aria — a mix between a multi-purpose vehicle (MVP) and a sports utility vehicle (SUV) — and the 1,400-cc hatchback Tata Vista.



Data from the Indonesian Automotive Industry Association (GAIKINDO) shows that MVPs dominate the Indonesian market with 63 percent, followed by SUVs with 18 percent and hatchbacks with 14 percent.



When asked whether the recent fuel price hike might affect Tata’s plan to introduce its products in September, Sengupta said the hike could even be a “blessing in disguise” as most of his company’s products used diesel fuel, which was cheaper and more efficient in fuel consumption.



Fuel prices increased last month from the previous level of Rp 4,500 (45 US cents) to Rp 6,500 for Premium gasoline and to Rp 5,500 for diesel, to curb ballooning fuel subsidies.

Source:-www.thejakartapost.com

CBDT move to plug leakages in commodities derivative transactions

The Income-Tax Department has tightened its leash on commodities derivatives transactions put through recognised associations.

The Central Board of Direct Taxes (CBDT) has asked commodity bourses to file with the Tax Department monthly reports of client code (unique customer ID) modifications.

Reporting on client code modifications will help plug revenue leakages, say tax experts.

This move is being largely driven by the Budget 2013-14 announcement to treat commodities derivatives transactions as non-speculative transactions for income tax purposes.

All commodity derivative transactions put through recognised associations will be taxed under the business income head for income tax purposes.

By recognising them as business income, a participant in bourses will be able to set off the losses if any against any other incomes such as those from sale of property etc.

This set off benefit was not available till recently as commodity derivative trade was considered as speculative transactions for income tax purposes.

The CBDT has also now laid out the conditions for recognising an association. It is only the participants of a recognised association who can avail themselves of the new tax regime on commodity derivative transactions.

Sampling In Garment Exports And Its Importance

Sampling of garments is given great emphasis. It determines the approval of future orders from buyers and fetches business for a garment manufacturing or export company. Sampling is one of key elements of the pre-production processes in a garment industry. Before a manufacturer produces bulk orders, a prior sampling of styles is done to get approvals and jumpstart the fabrication of garments. Samples of garments work as a bridge between buyers and the producers.



Sampling is not just for buyers, but the manufacturers can also derive estimates of yarn consumption for development of fabric, dyeing, printing, and stitching cost for a particular style or pattern given by the buyer. Companies can have a separate sampling department or a merchandiser, who works closely with the sampling section to source raw materials, and processes for developing a quality product for an affordable price.



Source:-www.fibre2fashion.com

Indian Rupee Fall To Hike Cost Of Imports

7-Jul-2013

NEW DELHI – The depreciating rupee will result in the cost of imported petroleum, coal, electronic components and other raw material going up, apart from increasing the cost of servicing debt, said V. K. Srinivasan, Chairman, Indian Institute of Economics.



The exchange rate of the rupee has declined with respect to not only the dollar but also those of other currencies. The turbulence witnessed since June has multiple reasons, including slowing Chinese growth, political tensions in Portugal affecting the euro, rising tension in Egypt with its impact on crude prices, and the sale by international investors in June of nearly Rs44,000-crore worth of Indian stocks, and bonds to the tune of Rs33,600 crore, he said.



S.K. Rao, Director-General, Administrative Staff College of India, said that the rate of inflation needs to be brought under control. It is not, however, a good idea to use monetary instruments (raising interest rates) to bring down inflation – when inflation is due to cost push factors rather than demand pull.



Such a policy can dampen investment and prevent necessary capacity building that could combat inflation. Some of the consumer price inflation is due to demand pull, but a large part of it is due to cost push associated with structural deficiencies, he said.



They made the remarks at an event organized by the Federation of Andhra Pradesh Chambers of Commerce and Industry in association with the Indian Institute of Economics on “Failing Economy and Falling Rupee.”

Source:-www.saudigazette.com.sa

Pharma Cos Asked To Intimate Drug Import Alerts, Restrictions By Foreign Drug Authorities To Dcgi

In yet another proactive action to ensure the quality, safety and efficacy of the drugs marketed in the country, the drugs controller general of India (DCGI) has directed the pharma companies in the country to bring details about drug import alert or restrictions imposed by regulatory authorities abroad to the immediate notice of DCGI office as well as the state drug control authorities.



The DCGI's action comes in the wake of the fact that recently some concerns have been flagged in some countries with regard to the issues related to compliance to good manufacturing practices (GMP) and other aspects in manufacturing of certain drugs by some Indian drug manufacturers and exported to these countries. Restrictions like import alerts have also been issued in certain cases. Such actions have been taken by the drug regulatory authorities abroad in light of the regulatory requirements in those countries. Such Indian drug manufacturers are also involved in manufacturing and supplying the similar drugs to the Indian market. India is exporting drugs to more than 200 countries.



“In view of above, it has been considered necessary that such issues, as and when raised, be brought to the notice of regulatory authorities in India so that necessary action is taken to ensure the quality, safety and efficacy of the drugs marketed in the country,” the DCGI in his directive to the state drug control authorities said.



DCGI Dr GN Singh in his directive asked the state drug control authorities to direct all the manufacturers in their respective state to union territories that, as and when such issues are raised and actions like restrictions or alerts are issued by any drug regulatory authorities abroad in respect of drugs manufactured and exported from India, the details of the same should be brought immediately to the notice of the office of DCGI as well as the state drug control authority concerned so that its impact in Indian scenario can be assessed and necessary action can be taken to ascertain the quality, safety and efficacy of the drugs available in the country.

Source:-www.pharmabiz.com

DRP is a quasi-judicial authority; must give germane reasons for its order

IT/ILT : Dispute Resolution Panel, being a quasi-judicial authority must ascribe cogent and germane reasons for its order, to facilitate its appreciation when called in question before a superior or appellate forum

All you need to know about opening an account under NPS

The NPS is a defined contribution scheme, which was launched in May 2009, for all citizens on a voluntary basis. An individual can make regular contributions to the NPS account, which is managed to create a retirement corpus.

One can open the account by completing the documentation and formalities with the Points of Presence (PoPs). A PoP is the first point of interaction between the subscriber and the NPS.

Conditions: An Indian citizen between 18 and 55 years of age can join the NPS. It offers two types of accounts—Tier I, where the contribution cannot be withdrawn, and Tier II, where it can be withdrawn anytime. To have a Tier II account, one must have a Tier I account.

Form: An individual who wants to open a Permanent Retirement Account (PRA), be it Tier I and/or Tier II, has to submit the form with other supporting KYC documents to the POP service provider. The form can be downloaded from http://tinyurl.com/ntzxa2u.

Contribution: The first contribution to the account has to be made at the time of registration. The minimum amount is Rs 500 and the minimum contribution in a year is Rs 6,000. This should be done for at least four years, while there is no maximum limit. The contributions can be made by cash, local cheque, demand draft or through an electronic transfer.

PRAN: After submitting the form and documents, NSDL, the central record-keeping agency (CRA) for NPS, allocates a Permanent Retirement Account Number (PRAN) to the individual. This card is despatched within 20 days of the day of receipt of the form.

Points to note:

> A subscriber can go to https://cra-nsdl. com/CRA/ and check the status of PRAN kit using the 17-digit receipt number provided by the POP service provider.

> If the minimum annual contribution of Rs 6,000 is not made to the account, the account becomes dormant.

The content on this page is courtesy Centre for Investment Education and Learning (CIEL). Contributions by Girija Gadre and Arti Bhargava.

Things to know before investing in debt funds

By Uma Shashikant

Debt funds have been sold to a large number of retail investors in the past two years. The investors who bought on the basis of high returns earned in the past, have lost money in the last one month. Why do debt funds make losses? How should investors choose?

First, a debt fund is a portfolio of debt instruments. Therefore, the return you earn from such a fund is primarily made up of interest income, which is not accounted for on the day it is received in the bank account, but is accrued every day.

In other words, if a debt fund buys a bond that pays 9% interest, it would accrue an interest of 75 paisa every month, or 2.5 paisa every day. The amount that accrues to a debt fund depends on the bonds it holds on a given day. This is why a debt fund's NAV will show an upward slope, unlike an equity fund, which does not earn a regular income. Therefore, the investors who chose a debt fund because it provides a regular income and is less risky are correct in their assumption.

Second, several debt funds are openended. This means that the fund manager does not receive all the money he has to invest at one point, nor does he hold all bonds to maturity and sell them when the fund matures. A fund that does this is a fixed maturity plan (FMP). All other funds receive money and service redemptions on an ongoing basis. This means that the investors choose the time for which they want to be invested in a fund. The return they get will depend on the period for which they stay in a debt fund.

For example, a liquid fund, which is a very-shortterm debt fund, is run like an interest-bearing current account. It invests as it receives money, and the interest income it earns is accrued every day. An investor who leaves idle cash in a savings bank account earns only 4%, but the same money in a liquid fund or an ultra short-term fund will earn a daily interest income based on the market rates. Most investors will find ultra shortterm funds an efficient vehicle for shortterm investments.

Third, debt funds are subject to market risk. This means that they may hold bonds paying various rates of interest, while the market interest rate might be changing. This is the source of 'mark-to-market' risk in a debt fund. When interest rates go up, the value of existing bonds in a debt fund falls, and vice versa. A debt fund will rework the value of all the bonds it holds, depending on the current market rates. That is why its NAV moves up and down. Fourth, the return in a debt fund does not comprise interest income alone.

To this income, any gain or loss from the change in interest rates is added. This is why debt funds become very attractive when interest rates are falling. The bonds they already hold appreciate in value, and this adds to the return for the investor. The extent of this appreciation depends on the cash flow from the bond due in the future. This is why long-term bonds tend to be more volatile than short-term bonds. Any change in market rates impacts a long-term bond with several cash flows in the future, than it does for a short-term bond that will mature in a shorter period.

10 tenets to follow while planning your investments

While financial planning is unique to each individual, there are certain rules that apply to all of us. Find out how many of these 10 tenets you are following while planning your investments.

1...time a year you should review your investments. Throw out underperformers and add more to the high performers.

The annual review is critical for maintaining the asset allocation of your portfolio.

2%...is the maximum you should pay as annual fund management expense on an average. A higher expense could prove costly in the long term.

Even a 0.5% difference in the expense can widen the gap to 10-15% over 20-25 years.

3...months' worth of your living expenses should be in a contingency fund, which can be accessed at short notice.

You will not be forced to break other investments in an emergency.

4...is the maximum number of times you should roll over credit card bill in a year. If you do it more often, you could be headed for a debt trap.

Credit card rollovers are costly. More importantly, it shows you are spending more than you can afford.

5...years is the minimum time frame you should have when you invest in stocks and equity mutual funds.

Equities are inherently volatile and may not yield desired results in the short term.

6...times your annual income is the life cover you should buy. Term plans make it possible to take a large cover at a low price.

Rs 1 crore will last 16 years if a family needs `60,000 a month, investment earns 9% and inflation is 8%.

7%...is the long-term inflation rate that you should factor into your financial planning. This is especially important for longterm goals such as child education and retirement.

Education costs are rising by 12% every year. In 6 years, the cost doubles.

8...is the maximum number of funds that a small investor should have in his portfolio.

More than this number will only duplicate the holdings and make the portfolio difficult to track and monitor.

9...years is the minimum term after which a unitlinked plan becomes profitable for the investor.

Ulip charges are high in the initial years, so short-term plans will yield poor returns.

10%...of your income is the minimum you should put away for retirement every month.

Increasing lifespan means you must have enough to sustain for 20 years in retirement.

Points to keep in mind

1- You may not be able to follow all the 10 rules mentioned above. However, even if you have complied with 6-7 tenets, it will ensure that your finances are on the right track.

2- The 7% inflation rate may appear high, but the prevailing consumer price inflation is actually higher at over 9%. It is better to err on the side of caution.

3- These rules will have to be tweaked in certain situations. For instance, if your target price is achieved, you could exit a stock or equity fund earlier or hold for the long term if the goal is far away.

4- A life insurance cover of 6 times the annual income does not include outstanding loans and other liabilities. One needs to take additional insurance to cover one's liabilities.

5- Don't let your contingency fund idle in a savings bank account. Start a sweep-in account or invest in a debt fund, which will pay within a day of submitting the redemption request.