IT : Where Tribunal set aside penalty order passed under section 271(1)(c) holding that penalty was not leviable inasmuch as assessee itself had disclosed additional income before passing of assessment order, no substantial question of law arose from said order
Thursday 24 October 2013
HC upheld penalty as no urgency was shown by assessee for accepting cash loan
IT: Where there was no urgency and necessity to accept loan in cash, imposition of penalty under section 271D to be upheld
Notification No 47 (RE-2013) / 2009-2014 dated 24-10-2013
Government of India
Ministry of Commerce and Industry
Department of Commerce
Directorate General of Foreign Trade
Notification No. 47 (RE- 2013 )/2009-2014
New Delhi Dated the 24 October, 2013
Subject: Relaxation in export policy for export of Red Sanders wood.
S.O.(E) In exercise of powers conferred by Section 5 of the Foreign Trade (Development & Regulation) Act,1992, as amended, read with paragraph 1.3 of the Foreign Trade Policy, 2009-14 the Central Government hereby makes the following amendments in respect of Sl. No. 188 of Schedule 2 of ITC(HS) Classifications of Export and Import Items as under:
“The condition stipulated in Column 5 against S. No.188 of Chapter 44 of Schedule 2 of the ITC(HS) Classifications of Export and Import Items shall be relaxed to allow export of 9784.1363 MT of Red Sanders wood, in the form of log obtained out of confiscated/seized stock from the Government of Andhra Pradesh & Directorate of Revenue Intelligence (DRI)”.
- (i) Government of Andhra Pradesh is hereby permitted to export 8584.1363 MTs of Red Sanders wood in log form, either by itself or through any entity/entities so authorized by them for the purpose.
(ii) Such entity/entities or Government of Andhra Pradesh, as the case may be, shall be granted export authorization by the concerned Regional Authority of DGFT upon production of quantity allocation letter from Government of Andhra Pradesh.
- (i) Directorate of Revenue Intelligence (DRI) is hereby permitted to export 1200 MTs of Red Sanders wood in log form, either by itself or through any entity/entities so authorized by them for the purpose.
(ii) Such entity/entities or DRI, as the case may be, shall be granted export authorization by the concerned Regional Authority of DGFT upon production of quantity allocation letter from DRI.
- Government of Andhra Pradesh/DRI shall finalize the modalities including allocation of quantities to various entities, as applicable, for export of the respective quantities within 6 months of issue of this notification and such export must be completed within 6 months thereafter. The whole process of export shall be completed latest by 31st October, 2014.
- Effect of this notification:
Prohibition on export of Red Sanders wood in log form has been relaxed for export of 9784.1363 MT of Red Sanders wood in log form through Government of Andhra Pradesh & Directorate of Revenue Intelligence (DRI).
(Anup K. Pujari)
Director General of Foreign Trade
E-mail: dgft[at]nic[dot]in
(Issued from F. No. 01/91/180/1380/AM12/Export Cell)
Duty wrongly paid by job-worker on inputs is also eligible for credit
ST: In case of assessee engaged in provision of services, goods used in providing such services are 'input' and any tax paid thereon (even if paid wrongly) would be eligible for credit
ITAT confirmed an Independent agent as PE of a foreign entity when no one appeared before it to cont
IT/ILT: Where a Finland company which was supplying tractors manufactured by it in Finland, engaged an Indian company for attending meetings, clearing consignments at ports, representing before tax authorities, etc., and paid agreed sum, Indian company should be treated as a PE, and not as an agent of independent status
INCOME TAX APPELLATE TRIBUNAL MUMBAI CONSTITUTION OF BENCHES FROM 28.10.2013 TO 31.10.2013
[unable to retrieve full-text content]INCOME TAX APPELLATE TRIBUNAL MUMBAI CONSTITUTION OF BENCHES FROM 28.10.2013 TO 31.10.2013 {ad} For more information...
Realtor arrested for evading service tax
Service tax officers of Hyderabad-II commissionerate arrested D. Vijaysen Reddy, a realtor, on the charge of evading payment to the tune of Rs 2 crore on renting of immovable property service. In a statement, CBEC commissioner M K Singh said Reddy committed a non-cognizable offence attracting the provisions of Section 89 (1) (a) of the Finance Act, 1994. He was arrested and subsequently released on bail bond and surety by the assistant commissioner, service tax (evasion), on Wednesday. |
I-T department to review orders of Settlement Commission
By: M PADMAKSHAN MUMBAI: The orders of the Income-Tax Settlement Commission, the body with powers to settle dispute between the income-tax department and taxpayers, are increasingly coming under review of the I-T department as it suspects some of the Commission’s recent decisions were not satisfactory. The Settlement Commission, set up in 1976, is a statutory body which a taxpayer can approach at any stage of the assessment proceeding, subject to certain conditions. It has the authority to waive interest and penalty and grant immunity from prosecution under the Income-Tax Act. Its orders are conclusive and non- appealable. The Central Board of Direct Taxes (CBDT) has asked the assessing officers to scrutinise the Settlement Commission’s orders and make a report, identifying the holes in the Commission’s orders and explore the possibility of filing a writ petition. KV Chaudhary, member (investigation ), CBDT, has admitted that a directive to scrutinise these orders has been issued, but said there was nothing new in asking the officers to review the orders. According to sources in the I-T department, the immediate reason for this move is that the Commission’s recently let off some offenders who were caught fudging accounts using bogus bills. The Settlement Commission, constituted under section 245 B of the Income-tax Act, 1961 (Chapter XIX-A ) and section 22B of the Wealth Tax Act, 1957, had its ups and downs with finance minister P Chidambaram, curtailing the Commission’s powers to the minimum and his successor Pranab Mukherjee reinstating its powers in addition to sanctioning additional benches. The Commission has the record of refusing to admit the application of late Harshad Mehta and Pune businessman Hasan Ali Khan, who is facing probe from the Enforcement Directorate and the income-tax department on charges of opening illegal accounts in Swiss banks. |
Sheet Rubber Drops Below Rs 160 A Kg
24-Oct-2013
The absence of genuine buyers and positive factors to stimulate the sentiments continued to overshadow the market.
A close below Rs 160 level, in futures, is expected to induce further pressure, on the commodity technically, though the weekend covering purchases at lower levels might trigger, a short-term recovery in the days ahead.
Sheet rubber weakened to Rs 159.50 (Rs 160) a kg, according to traders.
The grade was quoted steady at Rs 160 both at Kottayam and Kochi, according to the Rubber Board. The trend was mixed.
November futures declined to Rs 159.79 (Rs 160.71), December to Rs 161.90 (Rs 162.68) and January to Rs 164.82 (Rs 164.93) while the February and March futures remained inactive on the National Multi Commodity Exchange. RSS 3 (spot) dropped to Rs 156.87 (Rs 157.80) at Bangkok. October futures closed at ¥ 244.0 (Rs 153.92) on the Tokyo Commodity Exchange.
Source:- thehindubusinessline.com
Exp. incurred to preserve an existing asset, and not to obtain any new advantage is deductible u/s 3
IT: In order to decide applicability of section 31(i), basic test is to find out whether expenditure is incurred to 'preserve and maintain' an already existing asset and said expenditure must not be incurred to bring a new asset into existence or to obtain a new advantage
India To Score Over Pakistan In Yarn Supply In Chinese Market
Come November and Indian spinners will be in an advantageous position to compete with Pakistan in the Chinese market. Cotton prices are expected to cool off post-Diwali which will bring down yarn prices by at least 10% thus helping spinning mills to make further headway in China, which is one of the largest importers of Indian cotton yarn.
Talking to ET, Saurin Parikh, secretary, All Gujarat Cotton Ginners Association, said, "cotton prices are now hovering around 44,000 per candy. Rains have delayed the crop this kharif. We are expecting prices to climb down to 42,000 per candy by the end of November or early December. This will also push down yarn prices. Yarn exports to China will start picking up around that time as buyers will get yarn at a cheaper price."
Chinese buyers began negotiating business with Indian yarn exporters in August when the Indian rupee was hovering around 68-69 against the dollar. Buyers were also aware that demand for yarn in the domestic market which gave them a further chance to renegotiate prices.
But spinners are hopeful that the situation will change from next month. "There is no duty on cotton yarn imports in China. Therefore, it is an important market for India. Pakistan is also an important exporter to China. They export yarn of lower counts. India does not produce much of lower count yarn. But definitely there is a competition between India and Pakistan to get a greater pie of the Chinese market," he said.
At present, both Pakistan and India are selling cotton yarn at a price of $2.85-$3.4 per kg.
Source:- economictimes.indiatimes.com
India's Sail To Stick To Coal Import Target Despite Rupee Fall
24-Oct-2013
Steel Authority of India Ltd , the country's largest domestic steelmaker, is sticking to its target of importing 12 million tonnes of steel-making coal this fiscal year despite a weaker rupee inflating costs, its chairman told Reuters on Thursday.
The fall in the rupee, which hit record lows in late August and is down about 11 percent so far this year, has forced some small steel companies to rethink or delay coal purchases, importers and brokers say.
Every one rupee fall in the Indian currency compared with the dollar raises SAIL's costs by 1.5 billion rupees ($24 million) per year, Chairman C.S. Verma said. SAIL spent more than 135 billion rupees on coal in the last fiscal year.
"I can't remain insulated from the volatility in the rupee," Verma said. "But if I have to run my steel company, I'll have to import. There's no coal available in India of the type we need."
About two-thirds of SAIL's coal requirement comes from Australia, with the rest coming from the United States, said Verma, who is also the head of NMDC Ltd, India's largest iron ore producer.
SAIL, NMDC, Coal India Ltd and power company NTPC Ltd are part of a joint venture called International Coal Ventures Private Ltd (ICVL), which has been scouting for coal mines abroad to secure India's coal needs.
"We're carrying out due diligence of some properties," said Verma, who is also chairman of ICVL. A delegation of ICVL would visit Poland to know more about coal reserves there, he added.
Like SAIL, India's third-largest steel company JSW Steel Ltd depends on imports for coal and has been passing on to customers the higher imports costs caused by a weak rupee.
"The impact of rupee depreciation will get more than offset by way of higher realisations as (our) domestic steel prices are linked to landed cost of imports," JSW Steel Joint Managing Director Seshagiri Rao told Reuters in an email. ($1 = 61.6000 Indian rupees) (Editing by James Jukwey)
Source:- in.reuters.com
Undertaking by MD of a co. to honour dues of liquidating-co. by selling his assets was binding if ac
CL: Undertaking given by managing director of appellant company to liquidate dues of company-in-liquidation by selling suit property and accepted by Court, was binding on appellant-company and purchaser of that suit property
Wheat Poised For Weekly Decline As India Seeks To Export Surplus
Wheat headed for the biggest weekly drop in more than two months on speculation that an increase in shipments from India, the second-biggest grower, will boost supplies in a year when global output is set to reach a record.
The contract for December delivery was unchanged at $6.965 a bushel on the Chicago Board of Trade by 11:04 a.m. in Singapore after declining 0.2 percent. Futures are set for 1.3 percent weekly loss, the most since Aug. 9 and the first decrease in six weeks. Prices fell 0.7 percent yesterday after India issued a tender to export 120,000 tons of milling wheat from Mundra port in the period from Nov. 24 to Dec. 20.
Wheat slumped 10 percent this year as world production in the season that began June 1 will jump 8.2 percent to 708.9 million metric tons, U.S. Department of Agriculture data show. India’s food ministry will propose to the Cabinet today that it reduce the base price to $260 a ton from $300, according to two government officials directly involved in the talks. The move is aimed at reducing the 2 million tons of wheat in state reserves, they said.
“More talk that India is moving closer to reducing its minimum price hurdle for export wheat weighed on the complex,” Luke Mathews, a commodity strategist at Commonwealth Bank of Australia, wrote in a note today.
Corn for December delivery was unchanged at $4.4025 a bushel in Chicago. The most-active contract has dropped 37 percent this year on forecasts for a record U.S. harvest. Soybeans for delivery in January traded little changed at $13.0525 a bushel.
Source:- bloomberg.com
Thailand Moots Payment Of Full Duty On Gold Exports To India
24-Oct-2013
Thailand has offered to forego duty concessions on its gold jewellery exports to India under the bilateral free trade pact, worried that New Delhi may impose more restrictions. The issue was discussed during the meeting between commerce and industry minister Anand Sharma and Thai deputy PM and minister for commerce Niwattumrong Boonsongpaisan here on Wednesday.
“We have proposed that ... the exporters from Thailand and also importers in India agree that now we will pay tax on the gold (including gold jewellery) and things like that,” Niwattumrong told reporters after the meeting.
In March, the commerce and industry ministry had advised the revenue department to suspend preferential import of gold jewellery from Thailand.
The directorate of revenue intelligence, after raiding several jewellers in the country, had raised an alarm about traders misusing rules of origin certificate to import jewellery from third countries through Thailand.
The rules of origin norms under the trade agreement mandate a 20% value addition in Thailand for a product to be eligible for concessional regime. Since, gold prices are nearly the same in India and Thailand, the value addition norm would make the exports unattractive.
But, importing from a third country where gold prices are low makes it an attractive proposition to route the purchases through Thailand. The Early Harvest Programme under the India-Thai FTA allows gold jewellery imports at a concessional Customs duty of 1%. Importing jewellery from Thailand became very lucrative after the government raised duty on jewellery imports in phases to 15%.
Niwattumrong said Thailand’s export of gold to India is only 3% of total imports of India, adding that rest of the things in the scheme would not be changed. “This is a private sector agreement.
The FTA is still there” he added. India has imposed restrictions on gold import due to rising current account deficit that stood at 4.8% of the GDP in 2012-2013.
Source:- economictimes.indiatimes.com
August Import Could Have Saved Onion Woes
Even as onion prices keep spiralling across the country, it has now come to light that the situation could have been averted had the bulb got imported, as was planned by the National Agricultural Cooperative Marketing Federation of India (NAFED), in August. However, the plan could not be pursued due to some technical problem.
According to senior government officials, state-controlled NAFED had mulled floating tender for importing 20 lakh tonne onion in August. “But NAFED could not pursue the tender and import the onion due to some technical problems. We thought that the price will come down shortly but it didn’t. So, we have finally decided to import onion from Pakistan, Iran, China and Egypt. We have not yet decided the quantum of onion to import,” Changdeo Holkar, director of NAFED told dna on Thursday.
He said it will take almost a month to bring the onion physically from these countries.
Commodity experts believe that if the NAFED had imported the onion in August then “we would not have had shortage”. They said that the state government is “responsible for this mess”.
“Onion price is pinching the buyers. There is no sign that it will come down anytime soon. The central and state governments should decide policies well in advance, before the situation goes out of control. It shows that there is lack of planning...,” an expert said.
Ashok Walunje, director at Agriculture Product Market Committee and an onion trader, said, the government imports 10,000-20,000 tonne onion against the demand of one lakh tonne. “It will take more than a month for the onion to reach India. There is an ongoing strike at the JNPT where the vessels come in. This situation will prevail only for two-three weeks. By that time the onion comes from foreign countries, the prices will come down. There is no point importing it at the moment,” he added.
Nansaheb Patil, chairman of Lasalgaon Onion Market, said that for the first time farmers are getting good rates for the onion. “How much onion a family eats in a day? The cost, which a family has to bear per day, is nothing compared to the other expenses. People are happy to pay Rs25 for one litre of water bottle in malls and multiplexes and Rs500 on a movie ticket. But when it comes to paying a little higher to farmers, they always object,” Patil said.
According to senior government officials, National Agricultural Cooperative Marketing Federation of India (NAFED) had mulled floating tender for importing 20 lakh tonne onion in August .
However, it could not pursue the tender and import the onion due to some technical problems.
Commodity experts believe that if the NAFED had imported the onion in August then there would not have been had shortage. They said that the state is responsible for this mess.
Source:- dnaindia.com
Rupee Down 9 Paise Against Dollar
The rupee on Friday lost 9 paise to Rs. 61.55 against the US dollar in early trade on the Interbank Foreign Exchange market due to appreciation of the American unit against other currencies overseas.
Increased demand for the dollar from importers also put pressure on the rupee.
Dealers attributed the rupee’s fall to dollar gains against the euro overseas and a lower opening in the domestic stock market.
The rupee had closed 13 paise higher at Rs. 61.46 a dollar in Thursday’s trade after banks and exporters sold the US currency as it weakened overseas.
Source:- thehindu.com
Why you should remain invested in tax-free bonds
Several tax-free bonds, issued in 2012-13, are now available at a discount to their issue price of Rs 1,000 in the secondary market. For example, 8.2% NHAI-N2, issued in January 2012 and maturing in January 2022, is now trading at Rs 975. Similarly, 8.26% REC, maturing in 2023, is trading at Rs 980. Bonds typically trade at a discount to their face value when the interest rate moves up. But that is bad news for investors in these bonds.
If you have additional money to invest in tax-free bonds, use the primary market route," says Deepak Punjwani, head (debt markets), GEPL Capital.
That is why many of them are wondering whether they should sell these bonds at a loss and subscribe to new tax-free bonds in the market, which offer a higher rate of interest. "It makes sense to hold on to these bonds and not sell at a loss as we expect the interest rate cycle to reverse soon," says Deepak Punjwani, head (debt markets), GEPL Capital.
Most investment experts feel it is a matter of time before interest rates start their downward journey. When that happens, bond prices will recover and will start trading above their face value.
"With the rupee stabilising in the range of 60-62 against the dollar, the immediate priority of the RBI will be to focus on increasing growth and lowering inflation," says Vikram Dalal, managing director, Synergee Capital.
"While rates may rise marginally by 25 basis points in the October policy, this could be the last of the hikes and there will be some indication of cutting rates in the coming months as inflation slows down," says Dalal. He expects the benchmark 10-year government security to trade between 8.25% and 8.35% in the next three months.
The 10-year g-sec is currently trading around 8.50-8.65%. However, this doesn't mean that you should start buying these taxfree bonds from the secondary market. "It doesn't make sense to make fresh purchases of these bonds from the secondary market as yields are lower than the primary market.
If you have additional money to invest in tax-free bonds, use the primary market route," says Deepak Punjwani, head (debt markets), GEPL Capital.
For example, 8.3% NHAI, maturing in 2027, trades at Rs993, giving you a yield of 8.45%. However, there are bond issues from PFC and IILCL in the primary market which offer better yields. PFC offers 8.79% for 15 years, while IIFCL offers 8.63% for the same tenure.
"The quality of issuers in the primary market is the same. Both PFC and IIFCL are backed by the government, carry an 'AAA' rating, which indicates highest safety in terms of timely repayment of interest and principal," says Vikram Dalal.
If you have a longer time-frame in mind, you could even invest for 20 years where rates are marginally higher. PFC offers 8.92% for 20 years, while IIFCL offers 8.75%. "Not only is the interest rate on these bonds high, they also give you an opportunity to earn capital appreciation when rates could fall down," says Vikram Dalal.
For example, if interest rates were to fall by 1% in the next one year, investors could earn as much as 10-12% by way of capital appreciation on a 20-year bond as well as the tax-free coupon rate of 8.92%. This could take your returns to as high as 20-21% per annum.
CBDT strengthens role of supervisory authorities to streamline New Internal Audit System
IT : Revision of Instruction No. 3/2007 on New Internal Audit System - Strengthening role of supervisory authorities
DGFT Public Notice No.33/(RE 2013)/2009-14 dated 24-10-2013
Government of India
Ministry of Commerce & Industry
Directorate General of Foreign Trade
Public Notice No. 33 (RE: 2013)/2009-2014
New Delhi : Dated 24th October, 2013
In exercise of the powers conferred under paragraph 2.4 of the Foreign Trade Policy, 2009-2014 and paragraph 1.1 of Handbook of Procedure (Vol. I), the following amendment are made in the Handbook of Procedures Vol II :
- In the existing entry of SION at SI. No. A- 3504 of the Product Group “Chemical and Allied Products”, the description of import item no. 1 may be read as “7-Chloro-1-cyclopropyl-6-fluoro-1,4-dihydro-4-oxo-3-Quinoline carboxylic acid” instead of “ 7-Chloro-1-cyclopropyl-6-fluoro-1,4-dihydro-4-oxo-3-Quinoline-3-carboxylic acid”
- Effect of this Public Notice:- The description of the import item at SI. No. 1 of SION ‘A-3504’ has been corrected.
(Anup K Pujari)
Director General of Foreign Trade
E-mail: dgft@nic.in
(Issued from File no. 01/82/162/00480/AM12/DES-III)
Matter remanded as assessee pressed hard impugned issues in appeal whereas ITAT held otherwise
IT : Where observation of Tribunal that assessee had not pressed issues in question, was seriously disputed by assessee, matters were to be remanded back for fresh adjudication
RBI asks banks to amend their MoA and AoA in line with amended Banking Laws
SEBI : Amendments to Banking Regulation Act 1949 - Banking Laws (Amendment) Act 2012 - Applicability to Private Sector Banks
SEBI releases General Information Document for Public Issues
SEBI : General Information Document for Investing in Public Issues
Extended period not available if judgment of Tribunal in favour of assessee was subsequently overrul
ST : When Tribunal had interpreted law in favour of assessee and subsequently that interpretation was reversed by Supreme Court, assessee could have a bona fide belief not to pay service tax and, therefore, invocation of longer period of limitation cannot be sustained in such cases
CPC allowed to issue refunds without adjustment if either of outstanding demands or refunds don’t ex
IT : Section 245 of The Income-Tax Act, 1961 - Refunds - Set off of Refunds Against Tax Remaining Payable - Data Pertaining to Notices Issued Under Section 245 by CPC, Bangalore Where Demand/Refund is Greater Than Rs. 5000
I-T Department chases 1.4 lakh defective returns; asks AO to expedite recovery of unpaid self-assess
IT : Section 139 of The Income-Tax Act, 1961 - Return of Income - Treating E-Returns of A.Y. 2013-14 Where Unpaid Self-Assessment Tax Exists on The Date of Filing of Return as Deemed Defective Returns
Income surrendered to buy peace would evade concealment penalty in absence of means rea, rules HC
IT : Where Assessing Officer had not brought any evidence to prove that return gift made by assessee's minor son by friend was actually sale consideration of gift of a hotel made by assessee to his friend, no penalty could be levied
Share issue exp. to meat out routine business activities held as revenue expenditure
IT: Expenses relating to issue of share capital would be eligible for deduction as a revenue expenditure as those expenses were to meet out day to day transactions of business of assessee
Question of ‘deemed registration’ on non-disposal of sec. 12A application within time referred to La
IT : Question whether non-disposal of application under section 12A within stipulated period would be considered as deemed registration under section 12AA(2) was referred to Larger Bench
CLB has got power under section 402 to take decisions on removal of statutory auditor
CL: Pending petition under section 397/398 before it, CLB has power under section 402 to take decision in respect of removal of auditor
Is your financial life heading for a disaster?
The condition of an individual's financial life is not apparent only based on the income he earns. Sometimes, even after earning well, your financial life may not be in the best of colour. Many people are also comfortable living in the assumption that all is well. However, there are some broad signs or indicators which will tell you that your financial life is in trouble. Remember that the more valid these signs are, the more are the chances that you are heading towards financial disaster, and the more critical it is for you to take proactive steps to rectify the problem. Let's look at some indicators which tell you that your financial life is in trouble:
You cannot survive without an income for 3 months: Income is different from wealth. It is seen many a time that people earn pretty well, but if they lose their job suddenly, they are grappling for even the basic expenses. This is because they have not saved up enough to meet contingencies. If you have been working or in a business for a few years, then you should have a good back up in place which will help you survive for atleast for 3 months. When your expenses are very high and you do not have much left even when you are earning, you are stepping in to financial disaster. This is the first indicator to show that your financial position is shaky.
You pay high EMIs on depreciating assets: Having too many liabilities on your books is not good. It is worse if you have debt which does not result in an appreciation of your assets. For instance, having high amount of personal loans, credit card debt or even car loans which result in high EMI outflow from your monthly salary is a very unhealthy practice. As a thumb rule, your total EMI outflow should not exceed 40% of your monthly take home pay. If you have a home loan, the EMI towards this will constitute a sizeable portion. It is therefore better to avoid other kind of debt which does not increase your asset value. When you realise you are paying high EMIs on depreciating assets, this is another indicator of financial trouble.
It is not easy to get a better paying job with the skills you possess: Professionally, you must grow and advance in your career, such that it translates to better income and higher savings. However, if you find that you are not able to move upwards in your career despite repeated attempts, it means that you are going to be stuck with the same salary every year, or be happy with a small hike. This is turn means that your investments will be limited, resulting in limited wealth building opportunities. Take a proactive step in honing your skills and building your career for a better financial life as well.
CA convicted for professional misconduct as he cloaked dismissal order of HC while filing misc. appe
IT : Where Chartered Accountant of assessee deliberately did not disclose order of High Court dismissing appeal of assessee on issue of penalty while filing miscellaneous application before Tribunal on same issue, such concealment of fact would amount 'professional misconduct' on part of chartered accountant
ST penalty couldn’t be imposed if impugned issue was on interpretation of a provision of law
ST: Where issue involved is interpretation of provisions of law, which has been subject matter of various decisions, there cannot be any mala fide on part of assessee calling for imposition of any penalty
Indicators to know that your financial life is in trouble!
The condition of an individual’s financial life is not apparent only based on the income he earns. Sometimes, even after earning well, your financial life may not be in the best of colour. Many people are also comfortable living in the assumption that all is well. However, there are some broad signs or indicators which will tell you that your financial life is in trouble. Remember that the more valid these signs are, the more are the chances that you are heading towards financial disaster, and the more critical it is for you to take proactive steps to rectify the problem. Let’s look at some indicators which tell you that your financial life is in trouble:
You cannot survive without an income for 3 months: Income is different from wealth. It is seen many a time that people earn pretty well, but if they lose their job suddenly, they are grappling for even the basic expenses. This is because they have not saved up enough to meet contingencies. If you have been working or in a business for a few years, then you should have a good back up in place which will help you survive for atleast for 3 months. When your expenses are very high and you do not have much left even when you are earning, you are stepping in to financial disaster. This is the first indicator to show that your financial position is shaky.
You pay high EMIs on depreciating assets: Having too many liabilities on your books is not good. It is worse if you have debt which does not result in an appreciation of your assets. For instance, having high amount of personal loans, credit card debt or even car loans which result in high EMI outflow from your monthly salary is a very unhealthy practice. As a thumb rule, your total EMI outflow should not exceed 40% of your monthly take home pay. If you have a home loan, the EMI towards this will constitute a sizeable portion. It is therefore better to avoid other kind of debt which does not increase your asset value. When you realise you are paying high EMIs on depreciating assets, this is another indicator of financial trouble.
It is not easy to get a better paying job with the skills you possess: Professionally, you must grow and advance in your career, such that it translates to better income and higher savings. However, if you find that you are not able to move upwards in your career despite repeated attempts, it means that you are going to be stuck with the same salary every year, or be happy with a small hike. This is turn means that your investments will be limited, resulting in limited wealth building opportunities. Take a proactive step in honing your skills and building your career for a better financial life as well.
Investment Plans for working women
The general perception that women are shopaholics who love to spend and very bad investors could very well be a thing of the past with more and more women taking responsibility for their earnings and investment. This is critical nowadays, where single incomes are no match for a bloating inflation! A well-planned double income often becomes essential to plan investment goals effectively for a secure future and comfortable retirement! However, when saving women need to keep the bigger picture in mind and save for themselves as well as for their family. It is simply not enough just to save money but they have to invest in order to get more returns.
Think of your long term and short term goals in life. For example retirement planning, your child’s higher studies, a dream home, world tour etc. could be your long term goals and your short term goals can be doing a part time course, closing your educational loan, marriage etc. Remember, inflation is always going to reduce the value of your money. Let inflation be an important factor in mind before you plan your investments.
Women need to master the art of investing, in order to stay financially independent and to plan for retirement. There is no particular age to start saving for your retirement. The earlier you start the better it is.
Investment for teenagers
It is obvious that women will not have much cash in hands as teenagers, but one can still cut down on unwanted expenses and save some amount of pocket money. You can save the money in Sanchayika scheme and use it to reach your short-term goals such as buying gifts for your friends/parents, for your own birthday party and so on. It will also help you build your savings habit.
Investment in your 20s
In their 20s, women decide their career and their future. Equities can be a good investment choice as you can take more risk when you are young. You can choose to invest in mutual funds for your long-term goals, as mutual funds will give you the benefit of professionals managing your money. Take up suitable health insurance plans at this age; this will take care of your medical emergencies. Make sure you have sufficient liquid funds to help you during emergencies. This should be the right stage to decide your long-term goals; plan in such a way that the long-term investments give you good returns at the appropriate time.
Investment in your 30s
At this stage of life, women are generally married and likely to have children. They become responsible for their family, and they have to secure their children’s future. It is advisable to choose suitable term insurance plans and mutual funds that perform well. You have to choose educational plans for your children and tax plans for yourselves.
You can also choose to invest in real estate for long-term growth. Investment in gold is another good option; always buy gold in the form of coins or bars or invest in gold funds, never consider gold ornaments as an investment. Gold in the form of jewellery is only going to cause loss in the form of wastage and production/making charges.
Managing finances; practical tips for those moving to big cities
Are you moving?
You can be moving over from Nasik to Pune, Tirupur to Coimbatore, Vijayawada to Hyderabad, Bangalore to Mumbai, Delhi to San Francisco or anywhere else too. You could even be moving from Bhatinda to New Jersey in one go.
Like the rolling stone saying goes, moving over or relocating especially to a bigger place / city is a learning experience. You have to unlearn and relearn how to walk, talk, dress up, eat, relax, spend and lot more all over again.
For Bhuvana it has been one of the most trying yet exciting phases of her life when she recently moved from Chennai to Mumbai. With bright career prospects and opportunities to earn from various quarters, Bhuvana and her hubby were thrilled and anxious about leaving a known devil.
Being a smart couple and having been trained in personal financial planning, the first thing they did when they knew they had to move was, count the chicks obviously before they were hatched. Okay, new salary – we will spend so much - so we can save so much kind of calculations.
Moving to a new city usually entails one or more of the following.
New opportunities for spending
In a smaller city what would you really do during free time, during weekends, for celebrations? May be go to the temple, visit your relatives, hang out with friends or go to a movie in the local theatre. But in a metropolis, in a bigger city you can do a lot more things – visit malls, pubs, movies in state-of-the-art theatres, eat outs in 5 star hotels. In all probability the earnings have gone up, so give in to consumerism, particularly if that is what everybody else is doing. By the time you get over the awe, the pockets would dry up. But then, there are credit cards.
Not everything is more expensive
House rent, education, grooming etc may be expensive. Some things may be cheaper. House help, transport, comfort clothing may be cheaper. How does that work? More people, more money, more spending capacity means bigger markets. This means markets allow competition. And whenever there is competition in the market place – who wins, who is the king? The customer! It is up to you to work around the system to keep expenses under control. At least, now you are not dependent on the only fish vendor in town. You can check out, you can shop around. You have options.
Living up to meet the standards
More opportunities mean more competition, doesn’t apply only when you are the customer. It applies when you are the vendor too. At the workplace, in your business or profession you are probably working with very efficient and accomplished people. You compete with the best of the brains. There are standards to be met. You have to be well groomed, well dressed, at your best all the time. Slips ups may be expensive. And needless to say, all that costs money. These are investments you have to make to stay ahead to maintain your higher earnings.
Check out with the locals
The locals have been there and done that. So, letting go of your inhibitions and striking that all important conversation with your neighbours will be very helpful in figuring out what works and what doesn’t. Bhuvana had the privilege of her neighbours helping her get a good deal with the house maid, with the milk vendor, with the purchase of a car and a lot more.
Change your consumption patterns
Yes, rice costs 50% more here but wheat costs lesser. Vegetables most suited for south Indian food habits are way too expensive here, but those with which the locals cook are easily available and are much cheaper. Filter coffee is a luxury but tea is cool. Once in the new place, trying to live the life of your hometown would be way too ambitious. If you want to keep expenses under control, live the way the locals do.
Embrace the change; adjust to local trends and tastes, that way living will get easier on the pocket. You will be able to live up to your challenges while enjoying the luxuries of a big city life. Bhuvana and Ram have been able to do that. What about you....?
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