IT : In pursuance of order passed by Tribunal that certain income was taxable in relevant assessment year and not in earlier years, in terms of Explanation 2 to section 153, Assessing Officer rightly initiated reassessment proceedings for assessment year in question in order to bring said income to tax even if there was no specific direction of Tribunal to reopen assessment
Friday 6 September 2013
Taxpayer hadn't to be screwed for 'clerical' mistake; penalty levied for short payment quashed
ST : Services for complying with laws of country are not covered by definition of Management or Business Consultant's Services [Section 65(65)] because such services are executory in nature and not in nature of consultancy or advice
TP provisions can't be invoked on investment made by Indian holding co. in its foreign subsidiaries
IT/ILT : Where assessee invested certain amount in share capital of its subsidiaries located outside India, said transactions were not in nature of transactions referred to under section 92B and, therefore, transfer pricing provisions were not applicable in such a case
Mumbai service tax dept tells Bollywood
Imagine Bollywood toughie Sunny Deol shivering at the thought of going to jail. Well, if he doesn't cough up Rs.20 lakh due to the Mumbai Service Tax department soon, he just might end up behind bars.
The department had issued a notice for Rs.1.95 crore service tax which Deol owed them. The star has paid Rs.1.75 crore but the balance is yet to be cleared. The department will be ready with a show-cause notice in the next two days.
Deol is not the only one, three other Bollywood personalities have already faced the department's music. They include, producer Sameer Karnik (who was arrested for service tax evasion of Rs.1.88 crore), producer-director Anurag Kashyap (he was booked for tax evasion of Rs.70 lakh and his bank accounts were attached) and director Tigmanshu Dhulia (was booked for evading Rs.47 lakh tax and his bank accounts attached).
Mumbai service tax commsioner (Zone 2) R. Sekar said, "In the next few days, we might take action against some big names."
He said, "Till now, we have sent almost 132 notices to film and television production houses. The deadline to reply is almost over. But the fact remains that, excluding one or two, no production house has bothered to reply. As a result, we will continue with our action that includes booking those evading service tax and, if required, arresting them."
Notices have been sent to Eros International, Big Cinema/Big Entertainment, Anil Kapoor Films Ltd, Red Eye and Phantom among others.
A large number of copyright service providers, producers and production houses, have not paid their service tax liability. The department had issued letters since 2012 to 132 producers to furnish information relating to copyright services provided and the details of payment of service tax. However, when it did not receive any response, the department issued letters to the producers again last month.
Sekar said, "We have found some production houses who are not paying service tax at all and some of them are collecting service tax but not giving it to department, which is unacceptable."
In this connection, the Film and Television Producers Guild of India Ltd had a meeting with the service tax commissioners on August 29, 2013 and assured complete cooperation. Soon after, Guild informed its members to take this issue and action seriously.
Guild CEO Kulmeet Kakkar wrote to members saying, "There is a feeling in the department that the industry is not taking this matter seriously and not responding to the department. Therefore, we propose to hold a seminar with the tax experts at the earliest for our members and chief financial officers for any clarity they make like to seek on the tax norms." The meeting is still pending.
Several Bollywood producers told this correspondent that they were not running away from service tax and that they would pay up. But they felt that imposing service tax on Bollywood was not correct.
Producer Kumar Taurani said, "See actually our business is creative business, so may be we are not updated. Our chartered accountant is not in place. But because of these 132 notices, everybody will pay, it's not like nobody wants to pay. The law will be followed. We have many things on our head. Film business seems very easy but its very complicated. I think ultimately we will meet department's expectation."
The department is also willing to offer Voluntary Compliance Scheme (VCS) to support the industry in case any defaulting member is not in a position to make such payments immediately. Producer Sameer Karnik is planning to apply for VCS but service tax officials might just reject it.
So choppy days are ahead for film and television production houses. But for Sunny Deol, all he has to do to escape arrest is to pay up the balance due and stop shivering.
Commercial education isn't charitable if revenue exceeds threshold limit; registration can't be deni
IT: In view of amended provisions of section 2(15), education for commercial purpose itself in principle does not constitute 'non charitable purpose' rather it depends upon quantity of aggregate receipts of trust and, therefore, denial of registration under section 12AA on aforesaid ground is not proper when assessee-trust is yet to start its educational activities
ONGC isn't dominant player in procuring hydraulic cranes when other players are also present in rele
Competition Act: Where number of enterprises were there in relevant market for hiring of hydraulic cranes in North Eastern Region of India, ONGC was not a dominant procurer of hydraulic cranes on hiring and, therefore, no abuse of dominance by ONGC
Gross direct tax collections during April-August of the Financial Year 2013-14 is up by 14.43 percent
Direct Tax Collections for August Quarter up by 14.43% and Stood at Rs. 1,88,193 Crore as Against Rs. 1,64,463 Crore in the Same Period Last Year. Gross direct tax collections during April-August of the Financial Year 2013-14 is up by 14.43 percent at Rs.1,88,193 crore as against Rs. 1,64,463 crore in the same period last year. |
Cotton Market: Spot Rate Falls On Steady Arrivals
Official spot rate fell on the cotton market on Friday, in the process of moderate buying by mills, dealers said. The official spot rate was down by Rs 50 Rs 6,650, they said. Prices of seed cotton per 40 kg in Sindh maintained overnight level at Rs 3000-3100, while in Punjab rates were at Rs 2700-3000, they said. In the ready session, 14,000 bales of cotton changed hands between Rs 6675-6800, they said.
Cotton analyst, Naseem Usman, said that prices declined on steady arrivals but it was not expected because superior quality was not available easily. Other experts attributed the fall in rates to recent cotton import from India, because fine type of Indian cotton was available at cheaper rate, which could be a reason behind the fresh fall in the local prices.
Besides, reports appeared that India's cotton exports are expected to drop on account of a slump in purchases by top cotton consumer China and higher domestic prices, a Reuters survey of traders and exporters found. In the meantime, quality caution mills were busy in making substantial quantity at the present levels to meet near term needs, they added. During the last several sessions, prices stayed put due to shortage of best quality cotton, the Punjab variety faced with quality problem due to unfavourable weather condition, they added.
Now the situation had changed as cotton variety from Punjab improved, but easy supply might cause further decline in the rates, they added. According to the Reuters, ICE cotton futures hit fresh three-month lows on Thursday as the long liquidation that has knocked 12 percent off fiber's value in the past three weeks continued and the dollar strengthened following upbeat US jobs data.
The most-active December cotton contract on ICE Futures US settled down 0.45 cent, or 0.50 percent, at 82.75 cents a lb, it's weakest since June 3. Prices are on track for a third straight weekly drop. "Cotton prices continued to slip today driven by long liquidation," said INTL FCStone analysts, adding that Chinese prices fell in sympathy with the US market to their lowest since July. The following deals were reported as 2,200 bales from Shahzad Pur at Rs 6775-6800, 2,000 bales from Tando Adam at Rs 6775-6800, 2,800 bales from Sanghar at Rs 6750-6775, 1,600 bales from Mir Pur Khas at Rs 6750/6775, 400 bales from Motri at Rs 6775, 400 bales from Hyderabad at Rs 6775, 800 bales from Nawabshah at Rs 6775-6800, 600 bales from Sakrand at Rs 6775-6800, 400 bales from Daur at Rs 6750, 400 bales from Shah Pur Chakar at Rs 6775, 800 bales from Khair Pur at Rs 6800, 400 bales from Khanewal at Rs 6700, 800 bales from Chichawatni at Rs 6700, 200 bales from Bahawal Pur at Rs 6700, 400 bales from Burewala at Rs 6700, 200 bales from Tonsa Sharif at Rs 6700, 200 bales from Jahanian at Rs 6700, 600 bales from Haroonabad at Rs 6675-6750 they added.
Source:- brecorder.com
Natural Gas Will Power Past Coal, Exxon Says
6-Sep-2013
Thanks to the advent of hydraulic fracturing, natural gas has a new manifest destiny: By 2040, it will provide a fourth of the world's energy through its growth as fuel for transportation and electric power generation.
At least that's the projection of Exxon Mobil Corp., the nation's largest natural gas producer.
"It is penetrating into the power sector, which has been predominantly coal in the past. We see it making tremendous inroads there," said Lynne Lachenmyer, a senior vice president at Exxon Mobil who was keynote speaker at a petrochemical conference in Pasadena on Thursday.
The Irving-based oil and gas behemoth expects that in 30 years, natural gas will overtake coal as the second-most used energy source after oil, as demand for the natural gas climbs 65 percent, Lachenmyer said.
"We see a lot of people looking at natural gas as a form of transportation fuel, so you're beginning to see compressed natural gas or liquefied natural gas applications for fleets within large communities," she said. "Its growth rate is higher than the balance of the energy mix, so it's basically increasing its market share on an annual basis."
Addressing the engineers, bankers and Port of Houston officials at the 2013 Petrochemical and Maritime Outlook Conference, Lachenmyer said even as solar and wind pick up as sources of energy, fossil fuels aren't going anywhere.
Wind power is expected to grow by 7 percent per year while solar power will be 20 times more prevalent by 2040. Still, wind will make up just 7 percent of the world's stockpile of energy in that year and solar will make up 2 percent, Lachenmyer said. Meanwhile, oil and natural gas will make up 60 percent of the world's energy supply, up from 55 percent today, she said.
Energy demand will be a third higher by then that it is now, pushed by population growth and rising economic prosperity, she said. The increase is equivalent to the current energy consumption of Russia, India, Africa, Latin America and the Middle East combined
Hydraulic fracturing
In the U.S., new technology including hydraulic fracturing has unlocked massive, once-unreachable natural gas resources trapped in dense shale rock across the country. That, in turn, is creating an economic force that is disrupting and boosting businesses as diverse as the auto industry, agriculture and petrochemicals.
Natural gas is a fuel and raw material for petrochemical production.
Petrochemical growth promises to be a boon for the Port of Houston, where the industry and the export business have formed a symbiotic relationship. Just five years ago, before the shale revolution, petrochemical exports were declining, and the U.S. nearly became a major importer of petrochemical products.
The natural gas boom is turning that around, which means both increased business and greater challenges for the Port of Houston.
Vison for port
Port Commission Chairman Janiece Longoria laid out a vision for meeting those increased demands, including development of a storm surge gate to guard against disaster in a major hurricane strike, and improved cost-effectiveness in the regular dredging crucial to the flow of vessel traffic in the Houston Ship Channel.
"It's no surprise that 2012 and 2013 have been record years," she said, adding that the petrochemical industry is investing $35 billion in port-area infrastructure over the next three years.
More than 120 petrochemical construction projects have been announced in recent years, promising $80 billion in investments throughout the U.S. Gulf Coast region.
Petrochemicals now make up 12 percent of U.S. exports, bringing in $188 billion a year.
Lachenmyer cited American Chemistry Council projections that chemical exports will outpace imports and grow from an $800 million trade surplus in 2012 to more than $46 billion of net trade exports in 2020.
"This improvement in profitability is what's giving rise to the desire to continue to invest, to grow our footprint here alongside the shores of the Houston port," she said.
Syria, Oil And India
Barack Obama seems to be as yet unable to convince other global leaders to back an invasion of Syria, where the brutal regime could have used chemical warfare against civilians. But the oil markets have been jittery, and prices have climbed for four weeks in a row.
The state of the global oil market should worry Indian policymakers who have until now stayed focused on the other big component of the trade gap: gold. There has been some stray talk about the possibility of buying oil from Iran by paying in rupees.
Rising global oil prices are a worry for two clear reasons. One, they will feed inflation, especially since the rupee has also fallen in value. Two, the trade gap could grow just as there are hopes of at least a mild export revival. A lot of attention is on what Ben Bernanke will do later this month, but it is time that more attention is also paid to how Obama plays the Syria game.
Source:- livemint.com
Export To India Slides
6-Sep-2013
According to the informed sources the Indian importers are losing interest to import goods from Bangladesh because of rupee’s downfall.
Benapole customs officials said the rate of daily export to India through Benapole land port has come down to one/fourth of the usual trading in the last one month.
Benapole check post Customs’ Cargo unit Revenue Officer Kamrul Hasan told bdnews24.com that in the last five days, between Sept 1 and Sept 5, total of 362 trucks carrying Bangladeshi goods went to India through Benapole port.
“But usually 250 to 300 trucks used to take consignments to India daily even one month ago,” he said.
Proprietor of an Indian import company Ms. Akash De, Laxman De told bdnews24.com, “We have lost interest in importing Bangladeshi goods as the dollar price has become unstable.”
“We are not making any profit by importing goods from Bangladesh. Under current situation, Bangladeshi businessmen are making profit.”
Laxman said Bangladeshi businessmen would now make more profit by importing even if they are facing trouble because of the drop in export.
Benapole border money market President and proprietor of Raza-Badsha Money Changer ‘Bashar’ said Bangladeshi taka is gaining against Indian rupee as rupee’s price is falling against dollar.
He told bdnews24.com: “On Thursday, Rs 82 was traded for Tk 100 at the money exchanges here.”
It was Rs 57 against Tk 100 at the end of 2012, Bashar said.
However, rupee’s continuous fall is already effecting Bangladesh’s economy, said Matiar Rahman, President of the Benapole chapter of India-Bangladesh Exporters and Importers Association.
He told bdnews24.com: “Every year we import Indian goods equivalent to $5 billion. But the cost has reduced by 10 percent at present for importing the same amount of goods.”
But there will be a negative effect too as Indian importers have decreased importing through Benapole port, Matiar said.
Benapole Port Exporters-Importers Association Joint Secretary Mohsin Milon said usually Bangladesh exports readymade clothes, frozen foods, jute, jute products, leather and agricultural goods to India.
Bangladesh on the other hand imports cars, clothes, industrial chemicals, raw materials and many other goods.
Source:- http:bdnews24.com
India-Uae’S Growing Trade Ties
Countries in the Middle East have had strong political and economic relationships with India for centuries. This included people-to-people contacts, as well as barter of textiles and spices from India for dates and pearls in the region. Sharjah and Dubai were the main hubs for trade with the Western coast of India and, in particular, the Malabar Coast.
Dubai has traditionally served as an entrepôt for trade between the Middle East and the Indian subcontinent, with trade largely dominated by merchants in the gold and textile sectors.
The discovery of oil brought with it an influx of workers from India in the 1960s. Indian migration to the UAE increased significantly in the 1970s and 1980s, with the expansion of the oil industry and the growth of free trade in Dubai,” says Dr. Ashraf Mahate, head of export market intelligence at Dubai Exports.
But the nature of this relationship has evolved, changing more in the last 10 years than in the past hundred.
“Until the beginning of the 21st century, India was largely credited only for being a source of cheap and abundant labour. In the last ten years or so, the profile of the average Indian in the UAE stands changed. The increasing number of entrepreneurs, investors and skilled professionals is the new face of the relationship today,” says Sanjay Verma, the consul general of India.
Historically, pearls, semi-precious stones and precious metals comprised the majority of trade and that is still the case today. Currently, major Indian exports include gems and jewellery, petroleum products, machinery and instruments; while major imports include gold, precious stones & gems, machinery and electronics. High gold prices have benefitted Dubai as the Indian market is a major source for exporters.
With such a strong and historical influence it is no surprise that India is the largest trading partner with the UAE. Annual bilateral trade between the UAE and India, including oil, now stands close to $75 billion.
In 2012, India was Dubai’s largest export destination accounting for 20 per cent with a value of Dhs32 billion. It was also the largest re-export destination at 15 per cent with a value of Dhs51 billion, and the third largest import destination with 9.3 per cent at Dhs68 billion.
“Today, India is Dubai’s number one trade partner, with goods worth almost Dhs206 billion traded in 2011. During the first quarter of 2013, Dubai- India total trade was valued at almost Dhs40 billion,” said Hamad Buamim, director general of the Dubai Chamber of Commerce.
For example, as of 2011, Dubai Chamber had around 21,000 Indian companies registered with them. The Sharjah Chamber had 9600, Ajman Chamber around 2600, Ras Al Khaimah over 1700, and the Jebel Ali Free Zone around 700.
AGREEMENTS GALORE
All UAE free trade negotiations are carried out within the framework of the GCC. A Framework Agreement on Economic Cooperation between India and the GCC was signed on 25th August, 2004. In this agreement both parties considered ways and means for extending and liberalising trade relations and initiating FTA feasibility.
The first round of trade negotiations were held in Riyadh in March 2006. During this round, GCC agreed to include services, goods, as well as investment and general economic cooperation in the GCC-India FTA. The second round of negotiations were held in Riyadh in September 2008. The Proposed Tariff Liberalisation Schedule was discussed during this round.
There have been further discussions between the GCC and India regarding free trade.
“A Double Taxation Avoidance Agreement was signed between the two countries in 1992. A high level task force on investments was set up to increase investments from UAE to India. The first meeting of the task force was held in February 2013. A Bilateral Investment Protection Agreement is also on the anvil,” says Verma.
COMMUNITY DEVELOPMENT
Dubai has traditionally been a popular base for many enterprising Indian businessmen and traders. The Indian community is the largest in the UAE, in terms of population as well as business. In turn, Indians have contributed significantly to the economic fabric and business community of Dubai.
The Indian Embassy based in Abu Dhabi estimates that the Indian community in the UAE numbers 1.75 million people, constituting around 30 per cent of the total population. Rough estimates suggest that 50 per cent of these are skilled and semi- skilled workers, and the other half are entrepreneurs, professionals, and service industry support staff.
“The first private hospitals and schools in the country were owned and managed by Indian businessmen. They have also played a role in the arts and culture through their patronage and financial support,” says Dr. Mahate.
For instance, between 2009 and 2012 Dubai Chamber’s Indian membership rose 41 per cent, to 24,566 in 2012, after rising around 12 per cent each year.
“In terms of Dubai Chamber, our Indian membership is one of our largest nationalities. As of May 31, 2013, we have a total of 25,972 Indian partnerships and full-ownership companies among our members,” said Buamim.
“The Indian community has been active in all sectors of the business community, working both to create the physical landscape of the country, as well as behind the scenes. This will be the case for many years to come,” he adds.
Riding on the fact that India-UAE trade is now touching over $1.3 billion a week, with Indians among the biggest investors in the UAE, a new crop of Indian entrepreneurs are adding to the competitive edge that the UAE has begun to enjoy in the region and the world at large.
“Indian entrepreneurs can justifiably take credit for world class business models operating out of the UAE, the areas of private school education, health sector, the retail space and trade. The other areas of excellence brought in by Indian professionals is in banking, education and accountancy,” says Verma.
WAY FORWARD
The UAE and India have a multi- dimensional partnership. While trade and oil continue to lead the economic ties between the two countries there exists emerging synergy in the new investment areas like infrastructure, ICT, and food processing.
With the liberalisation of key sectors in India like telecommunications, housing and real estate, construction, petroleum and natural gas, there
are increasing opportunities for UAE investment into India.
“Now India and the UAE have a huge opportunity to expand on their economic synergies to build even stronger growth momentum. The opportunities extend beyond the buyer seller relationship to a partnership level, involving joint ventures and transfer of technology arrangements, which can benefit both economies immensely,” says Buamim.
This is despite India’s current challenges posed by its fiscal and current account deficit. “We expect the RBI to continue with its calibrated easing of monetary policy and reduce repo rates by 50 bps over the next six months,” says Tim Fox, chief economist and head of research at Emirates NBD.
The recent reforms in India to boost FDI into the retail and aviation sector also offer huge potential for the UAE. Abu-Dhabi based Etihad Airways is already in the process of acquiring stakes in Jet Airways. Additionally, UAE- based retail giants like the EMKE Group and Landmark Group are expanding their presence in India.
Source:- gulfbusiness.com
Gold Imports In Aug Fall Below 10 Tons
6-Sep-2013
Following the clarification by the Customs department on certain procedural aspects, jewellers have started placing orders for importing gold, which had been at a standstill for one and a half months. Import in August is estimated at less than 10 tonnes, among the lowest monthly data in many years.
“Fresh purchase orders have started flowing in. With this, gold imports into India will commence soon,” said Vipul Shah, chairman of Gems and Jewellery Export Promotion Council (GJEPC). “We believe 20-25 tonnes gold will be imported into India in the current month, of which five-six tonnes will be re-exported.”
An important clarification in the Customs notification is that export certificates, once issued, should be acceptable for all consignments. Currently, the department seeks certificates with each consignment.
However, some issues remain. According to the new notification, banks are not allowed to import a third lot of gold unless the remittance of the first export consignment is reflected in the account of exporters.
Another provision of the newly-issued notification, “the nominated agencies can be visited by Customs officers for surprise audit or checks, at least once in three months”, has importers worried. Many of them have been advised to wait before clarity on the surprise audit emerges. Colin Shah, founder and managing director at Kama Schachter, a diamond jewellery manufacturer and retailer, said, “Clauses relating to procurement of gold from government agencies like MMTC and STC have to be relaxed. GJEPC is currently working on it in coordination with the commerce ministry.”
Meanwhile, in the last one and a half months when official imports were virtually on standstill, inflows from scrap gold and off-loading by investors who had bought it when prices were lower have helped business going for jewellers.
However, smuggled gold inflows has also been much higher. In the last one month, 20-25 tonnes of inflows came from scrap and selling by investors, said a bullion analyst.
Source:- business-standard.com
Rupee Rises 77 Paise To Two-Week High Of 65.24 Vs Dollar
6-Sep-2013
Mumbai, Sept 6 (PTI): The rupee continued to strengthen against the dollar on the back of announcements by new RBI Governor Raghuram Rajan, rising 77 paise today to close at 65.24, the highest level in almost two weeks.
Dollar sales by exporters, a weak US currency overseas and renewed capital inflows also helped the rupee to gain.
The rupee opened at 66 against the dollar from 66.01 previously at the interbank foreign exchange market and touched a low of 66.32. It bounced back to a high of 65 before settling at 65.24, a rise of 77 paise or 1.17 per cent.
The local currency has spurted 239 paise, or 3.53 per cent, in three sessions. This was the highest level for the rupee since August 26, when it had closed at 64.30.
Rajan, who took over as RBI chief on Wednesday, had announced steps to attract dollar inflows, including enhanced limits for exporters to re-book cancelled forward exchange contracts and a window to swap foreign currency deposits.
News from the venue of the G-20 Summit in St Petersburg in Russia also appeared to give hope to investors.
The BRICS grouping, including India, yesterday decided to launch a USD 100 billion currency reserve fund to help them navigate through an imminent phase out of the US stimulus.
Separately, India and Japan today expanded their currency swap arrangement to USD 50 billion from USD 15 billion.
“One important step for the rupee was taken at the G-20 summit where India and Japan have extended their existing currency swap facility,” said Abhishek Goenka, CEO of India Forex Advisors. “This will enable our country to defend the exchange rate.”
The RBI’s liquidity-tightening measures may be rolled back by October as market sentiment and the rupee are expected to improve, Barclays said. The fresh RBI steps are likely to raise the possibility of better forex inflows in the next three months, it said.
The rupee helped stocks to rise, with the benchmark Sensex climbing 290.30 points or 1.53 per cent. FIIs injected a net Rs 1,101.41 crore into shares yesterday, as per provisional stock exchange data.
The dollar index was trading 0.04 per cent lower against a basket of six major global rivals.
“The market is reacting positively to steps taken by the new Governor, but the key would be the government’s intent in addressing the current account deficit and subsidy burden,” said Pramit Brahmbhatt, CEO of Alpari Financial Services (India). “The trading range for the spot USD-INR pair is expected to be within 64.80 to 66.30.”
Forward dollar premiums bounced back on fresh payments from banks and corporates.
The benchmark six-month forward dollar premium payable in February shot up to 248-253 paise from 229-1/2-234-1/2 paise previously. Far-forward contracts maturing in August jumped to 440-1/2-447-1/2 paise from 410-415 paise.
The RBI fixed the reference rate for the dollar at 65.9600 and for the euro at 86.5828.
The rupee flared up to 101.66 against the pound from 103.29 previously and rallied to 85.55 per euro from 87.18. It firmed up against the Japanese yen to 65.44 per 100 yen from 66.08.
The forex and money markets will be closed on Monday on account of Ganesh Chaturthi.
Source:- tehelka.com
SEBI to revise circuit breaker limits on daily basis; trading to be resumed with pre-open call aucti
SEBI : Index Based Market-Wide Circuit Breaker Mechanism
SEBI amends securities laws; lays down rules for finalizing settlement and rights of Clearing Corpor
SEBI : Securities Contracts (Regulation) (Stock Exchanges and Clearing Corporations) (Amendment) Regulations, 2013 - Amendment in Regulation 2 and insertion of Regulations 44A and 44B
ITAT set aside TP adjustment as no uncontrolled transactions were identified for comparison
IT/ILT: Where in respect of interest free advances given by assessee to its wholly owned overseas subsidiaries, TPO made adjustment at 14 per cent rate of interest based on LIBOR, following order passed by co-ordinate Bench of Tribunal in assessee's own case relating to earlier assessment year, impugned adjustment was to be set aside holding that TP adjustment was possible only in cases where comparable uncontrolled transactions entered into between two enterprises were established
Child birth is natural process, an act of God, and not illness; sec. 10(23C) relief denied to matern
IT : Section 10(23C) benefit can't be granted to maternity hospital as child birth is a natural process of God which in no way could be said to be any illness as contemplated under section 10(23C)(iiiae)
Revenue can't attach sum in bank account in excess of demand raised after completion of assessment:
IT: Revenue cannot attach entire amount standing to credit of assessee, in excess of demand raised on completion of assessment
Receipt on compulsory acquisition of land exempt from tax when shown as agricultural land in Pattada
IT: Where assessee received amount of compensation from Central Government on acquisition of its land, in view of fact that said land was shown as agricultural land in Pattadar's pass book and, moreover, agricultural income had been declared from said land in immediately two preceding years, amount of capital gain, if any, received by assessee on acquisition of said land was exempt from tax under section 10(37)
Provision Written off on sale of obsolete stock couldn't be taxed if no deduction was claimed on it
IT : Where provision made for slow moving/obsolete inventory was added back each year to calculate taxable income, provision written off on sale of such obsolete items could not be added, as no deduction had been allowed before
Delay in filing appeal condonable if notice for hearing wasn’t served at correct address of assessee
ST : Where impugned order was neither served at correct address of assessee nor to assessee's advocate, any delay in filing of appeal due to consequent unawareness of impugned order in time was liable to be condoned
If assessee denies receipt of notice revenue may furnish requisite material to prove its service
IT : When an assessee denies receipt of notice, it is imperative on part of revenue to produce requisite materials and, if available, such person who has sent notices
HC decides case on 'humanitarian' grounds; upholds ITAT's reconsideration of an order passed origina
IT: Where in appellate proceedings, Tribunal took a view that order passed by Commissioner (appeals) being administrative in nature, assessee's appeal against said order was not maintainable, subsequently in rectification proceedings Tribunal could not remand matter back with a direction to Commissioner (Appeals) to pass a fresh order on assessee's application
RBI/2013-14/230 A.P. (DIR Series) Circular No.37 dated 05-09-2013
RBI/2013-14/230
A.P. (DIR Series) Circular No.37
September 05, 2013
To,
All Category - I Authorised Dealer banks
Madam / Sir,
Issue of Bank Guarantee on behalf of person resident outside India for FDI transactions
Attention of the Authorised Dealer Category – I (AD Category - I) banks is invited to the Foreign Exchange Management (Transfer or Issue of Security by a Person Resident Outside India) Regulations, 2000, notified vide Notification No. FEMA. 20/2000-RB dated May 3, 2000 , as amended from time to time, read with Regulation 5(2A) of the Foreign Exchange Management (Deposit) Regulations notified vide Notification No. FEMA. 5/2000-RB dated May 3, 2000 , as amended from time to time permitting AD Category – I banks to open Escrow account and Special account on behalf of non-resident acquirer for acquisition/transfer of shares/convertible debentures of an Indian company through open offers/ delisting/ exit offers, subject to compliance with the relevant SEBI [Substantial Acquisition of Shares and Takeovers (SAST)] Regulations, 1997, as amended from time to time and other applicable SEBI Regulations and subject to terms and conditions stipulated in Schedule 8 to the Notification ibid.
Further, attention of AD Category – I banks is also invited to the Foreign Exchange Management (Guarantee) Regulations, notified vide Notification No. FEMA. 8/2000-RB dated May 3, 2000 , as amended from time to time, in terms of which, AD Category-I banks are allowed to give guarantees for specified purposes as stated therein.
- In order to provide operational flexibility and ease the procedures, it has been decided to permit AD Category –I bank to issue bank guarantee, without prior approval of the Reserve Bank, on behalf of a non-resident acquiring shares or convertible debentures of an Indian company through open offers/ delisting/exit offers, provided :
- the transaction is in compliance with the provisions of the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeover) [SEBI(SAST)] Regulations;
- the guarantee given by the AD Category –I bank is covered by a counter guarantee of a bank of international repute.
It may be noted that the guarantee shall be valid for a tenure co-terminus with the offer period as required under the SEBI (SAST) Regulations.
- In case of invocation of the guarantee, the AD Category-I bank is required to submit to the Chief General Manager-in-Charge, Foreign Exchange Department, Reserve Bank of India, Central Office, Mumbai 400 001, a report on the circumstances leading to the invocation of the guarantee.
- AD Category - I banks may bring the contents of the circular to the notice of their customers/constituents concerned.
- Reserve Bank of India has since amended the relevant Regulations vide Notification No.FEMA.265/2013-RB dated March 05, 2013 , notified vide G.S.R.No.532(E) dated August 05, 2013 and Notification No. FEMA.267/2013-RB dated March 5, 2013 notified vide G.S.R. 573(E) dated August 27, 2013.
- The directions contained in this circular have been issued under Sections 10(4) and 11(1) of the Foreign Exchange Management Act, 1999 (42 of 1999) and are without prejudice to permissions / approvals, if any, required under any other law.
Yours faithfully,
( Rudra Narayan Kar )
Chief General Manager-in-Charge
Customs Circular No 36/2013 dated 05-09-2013
Government of India
Ministry of Finance
Department of Revenue
Central Board of Excise & Customs
Tariff Unit
Circular No.36 / 2013 -Customs
229-A, North Block, New Delhi,
5th September, 2013
To
All Chief Commissioners of Customs / Customs (Preventive)
All Chief Commissioners of Customs and Central Excise
All Commissioners of Customs / Customs (Preventive)
All Commissioners of Central Excise and Customs
All Directors General under CBEC.
Sir / Madam,
Subject: Classification of “Bluetooth Wireless Headset for mobile phones / cell phones” under harmonised Customs Tariff - regarding.
Doubts have been raised on whether “Bluetooth Wireless Headset for mobile phones / cell phones” is classifiable in heading 8517 or 8518 of the Customs Tariff. The relevant text of these headings is as under:
85.17 “…; other apparatus for the transmission or reception of voice, images or other data, including apparatus for communication in a wired or wireless network (such as a local or wide area network),…”
85.18 “…; headphones and earphones, whether or not combined with a microphone,…”
- The illustrative product description for the purpose of classification of similar or identical headsets for “mobile phones / cell phones” is as follows: “Wireless headset consisting of a single (monaural) over-the-ear earphone combined in the same housing with a microphone, a radio transceiver, a rechargeable battery, a power input, a LED indicator light and controls. The radio transceiver utilizes an open wireless technology standard (wireless protocol for exchanging data within a Personal Area Network (PAN) using short length radio waves over short distances (up to 10 meters)) with Enhanced Data Rate (EDR) technology, which enables the headset to communicate wirelessly with fixed and mobile devices, such as a mobile telephone for cellular networks. The controls are used functions like on and off, voice dialling, call waiting, redial of the last number, etc., if supported by the apparatus with which it is “paired” (transmitting to and receiving from). The product is put up in a set for retail sale in a box with an AC charger and two ear-hooks of different sizes and a quick start manual.”
- This issue has been examined by the Board in consultation with the Department of Electronics and Information Technology, Ministry of Communication and Information Technology. The Compendium of Classification Opinions reflecting the decisions taken by the Harmonized System Committee (HSC) (47th Session – March 2011) was also referred. As seen, the classification of goods in the First Schedule of the Customs Tariff Act, 1975 is governed by the General Rules for the Interpretation (GRI) of Import Tariff.
- In the instant case, as “Bluetooth Wireless headset for mobile / cell phone”, is presented together with a charger, ear hooks and user documentation and put up in a set for retail sale, therefore besides GRI 1, the legal basis of classification would be the sequential application of Rules 2(a), 2(b), 3(a) and 3(b). It is the headset that confers it the essential character to this set. As seen, the “Bluetooth Wireless Headset for mobile phones/cell phones” comprises microphone / transmitter, headphone / receiver, wireless communication system. The communication function for mobile telephony characterizes its principal function for the purpose of Note 3 to Section XVI. This function is included in heading 85.17: “other apparatus for the transmission or reception of voice, images or other data, including apparatus for communication in a wired or wireless network (such as a local or wide area network”. Thus, heading 85.17 would apply to “apparatus” used for communication in wireless networks, which is a simultaneously two-way audio and data streaming in the radio frequency band. Also, the HS Explanatory Note to subheading 8517.62 (Machines for the reception, conversion and transmission or regeneration of voice, images or other data, including switching and routing apparatus) provides that, “this subheading includes cordless handsets or base units, when presented separately.” Headphones combined with a microphone of heading 8518 carry only audio signals and are not an active part of a network, whereas a Bluetooth headset with mobile telephony function is an active part of a wireless network, includes a software part for the wireless network and simultaneously receives/transmits voice and data in a wireless network. Thus, “Bluetooth Wireless headsets for mobile phones / cell phones” equipped with communication device fully comply with the subheading 8517.62.
- In view of the above, the Board is of the view that “Bluetooth Wireless headsets for mobile phones / cell phones” is correctly classified in heading 85.17, subheading 8517.62, by application of GRI 1 (Note 3 to Section XVI), 3(b) and 6.
- Accordingly, suitable instructions may be given to the field formations. Difficulty faced, if any, may be brought to notice of the Board.
Yours faithfully,
(Subodh Singh),
OSD (Customs), Tariff Unit
Fax: 011 – 23092173
Internal circulation – As usual
F. No. 528/8/2012-STO (TU)
Income brought to tax treating assessee as HUF not sustainable without proving existence of alleged
IT: In view of order passed in assessee's own case in IT Appeal No. 1118/2006 dated 31-3-2011, Tribunal was justified in deleting additions on ground of there being no existence of HUF when no material was brought on record to show nucleus of HUF
Winding up petition rejected as petitioner also chose to file suit in civil court for recovery of im
CL : Where petitioner had already filed a suit against respondent in respect of disputed amount, matter was to be considered by civil court and winding up petition was not maintainable
DGFT Public Notice No.24/(RE 2013)/2009-14 dated 05-09-2013
Government of India
Ministry of Commerce and Industry
Department of Commerce
Directorate General of Foreign Trade
Public Notice No. 24 (RE-2013) / 2009-14
New Delhi: the 5 September, 2013
Subject: Permission for export of Finished Leather, Wet Blue and EI Tanned Leather through Air ports.
In exercise of the powers conferred under Paragraph 2.4 of the Foreign Trade Policy, 2009-14, as amended from time to time, Director General of Foreign Trade hereby amends Public Notice No. 23(RE-2013)/2009-14 dated 13.08.2013 regarding export of finished leather, Wet Blue and EI Tanned Leather.
- Public Notice No. 23(RE-2013)/2009-14 dated 13.08.2013 had prescribed that export of finished leather, Wet Blue and EI Tanned Leather would be permitted through Sea Ports of Chennai, Mumbai (JNPT) & Kolkata and ICDs Kanpur & Tughlakabad or any other port/ICDs to be notified by DGFT from time to time. This public notice also prescribed the procedure for drawl of samples and their testing as per the finished leather norms notified vide Public Notice No. 21/2009-14 dated 01.12.2009 .
- Now, in addition to sea ports/ICDs indicated in para 2 above, export of finished leather, Wet Blue and EI Tanned Leather would also be permitted through Air Ports. Customs may draw samples, wherever so required, for certification by CLRI or such other labs as notified from time to time, as per finished leather norms.
- Effect of this Public Notice
Export of finished leather, Wet Blue and EI Tanned leather may also take place through Air ports.
(Anup K. Pujari)
Director General of Foreign Trade
E-mail:dgft[at]nic[dot]in
(F. No. 01/91/180/1240 /AM10/Export Cell)
Essar Oil Limited vs. ACIT (ITAT Mumbai)
Law on non-taxing foreign PE profits no longer good law after insertion of s. 90(3) & Notification dated 28.08.2008 (which has clarificatory effect) The assessee, an Indian company, had a P.E. in Oman and Qatar. The net business profits of the said Oman & Qatar Branch was Rs. 2.30 crore. The assessee also earned long term capital gains on sale of assets of the said P.E. in Oman and Qatar. The assessee claimed that as the said business profits and LTCG were taxed in accordance with the taxation laws of Oman & Qatar, they were not chargeable to tax in India. The assessee relied on the judgement of the Tribunal and High Court in its own case (included in this file) where the view was taken that as the DTAA provided that the business profits & capital gains of the PE “may be taxed in the other Contracting State”, the Country of residence i.e., India loses its right to tax if the Country of source has taxed the income. This view was based on the verdicts of the Supreme Court in P.V.A.L. Kulandagan Chettiar 267 ITR 654 and that of the High Courts in R.M. Muthaiah 202 ITR 508 (Kar) & S.R.M. Firm 208 ITR 400 (Mad). The department argued that the aforesaid law was no longer good law in view of s. 90 (3) inserted by the Finance Act, 2003, which provides that any term used but not defined in the Act or the DTAA shall have the same meaning as assigned to it in the notification issued by the Central Government. Pursuant thereto, the Central Government has issued a Notification No. 91/2008, dated 28.08.2008, wherein it has been expressly provided that where the tax treaty provides that any income of a resident of India “may be taxed” in other country, such income shall be included in his total income chargeable to tax in India in accordance with the provisions of the Act and relief shall be granted in accordance with the method of elimination or avoidance of double taxation provided in the DTAA. HELD by the Tribunal: |
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Audit of accounts as per State Societies Act and other of Court are enough to delete sec. 271B penal
IT : Where assessee, a co-operative society, in view of provisions of U.P. Co-operative Societies Act, 1963 and order of Allahabad High Court got its accounts audited by its internal auditors, levy of penalty under section 271B upon assessee on plea that it had not got its accounts audited by any chartered accountant was not justified
Arrests see 15% spurt in service tax collection
The provision of arrest in cases of evasion of service tax it seems has started having its impact significant improvement in collection that saw 15% jump in the last quarter.
The Service Tax department last week made its third arrest under the new provisions apprehending Net4 India Ltd managing director Jasjit Singh Sawhney for non-payment of tax levy to the tune of Rs 9 crore.
Sawhney was arrested on August 30 for the company's pending liability of about Rs 9 crore for fiscal 2012-13, an official said.
"A major chunk of this liability has been collected by the company from its clients as service tax to be paid to the government exchequer, but was not deposited with the government," the official added.
The official said Sawhney was granted conditional bail up to September 3 by the chief metropolitan magistrate in Patiala House Court on Saturday on payment of Rs 25 lakh. He has to pay Rs 75 lakh within 15 days and Rs 1 crore a month subsequently, the official said.
This is the third arrest this fiscal year by the department for failure to deposit service tax collected from customers.
Earlier, one person was arrested in Kolkata for non-payment of the levy to the tune of Rs 79 lakh, and another was held in Mumbai for dues of Rs 1.96 crore.
According to the Finance Act, any person who has collected service tax of more than Rs 50 lakh and fails to deposit the amount with the government even six months after the due date can be imprisoned for up to seven years.
The department has identified 10 lakh people who have not filed service tax returns or have stopped filing them and may be liable for punishment.
In the budget, the government had come up with the voluntary compliance encouragement scheme under which defaulters can pay at least 50% of the arrears for the five-year period ending 2012, with the remainder payable over six months without interest.
Finance Minister P Chidambaram had attributed the large number of defaulters to benign provisions of the Service Tax Act.
Service tax has emerged as a major source of revenue and the government proposes to collect Rs 1.8 lakh crore in the current fiscal year, up from Rs 1.3 lakh crore in fiscal 2012-13.
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