IT : Where investment was already duly disclosed, surrender of same again by ignorant assessee would be meaningless, and, thus, no addition could be made
Thursday 31 October 2013
India Ports To Benefit From Lng Boom
Virtually every port in India is looking to set up liquefied natural gas (LNG) receiving terminals to cash in on the country’s efforts to reduce its dependence on traditional and costly fossil fuels and switch to the more efficient, cleaner and ecofriendly option.
It is also an indication that locally produced gas—despite the grandiose plans announced by explorers—may not be enough to meet India’s huge appetite for the fuel for use in power plants, fertilizer units, petrochemical plants, automobiles and households.
India has four LNG re-gasification terminals at Dahej and Hazira in Gujarat and Dabhol in Maharashtra and Kochi in Kerala, all on the country’s western seaboard.
LNG is natural gas cooled to minus 162 degrees celsius. At that temperature, natural gas condenses into liquid, occupying less space, making it easier to transport over long distances. LNG is loaded onto specialized ships and delivered to re-gasification terminals where it is re-heated, turned into gas and distributed to customers through pipelines.
On the western coast alone, more facilities are being planned at Mundra, Pipavav, Chhara and Nana Layja, all in Gujarat. New facilities are also proposed at Kakinada, Gangavaram, Krishnapatnam, Ennore, Dhamra, Paradip and Karaikal on the eastern coast. All of these are expected to ramp up capacity to 50 million metric tonnes per annum (mmtpa) of LNG from the existing 19.8.
India’s LNG imports are estimated to reach 150 million metric standard cu. m per day (mmscmd) by 2017 and 258 mmscmd by 2022 from the existing 63, according to the oil ministry. Ten mmtpa is equivalent to 40 mmscmd of LNG.
The potential for imported LNG has attracted firms such as Shapoorji Pallonji Group, Reliance Industries Ltd, Swan Energy Ltd, IL&FS Maritime Infrastructure Co. Ltd, Allcargo Logistics Ltd, Gangavaram Port Ltd, Krishnapatnam Port Co. Ltd, Petronet LNG Ltd, and state-run firms such as Indian Oil Corp. Ltd, Hindustan Petroleum Corp. Ltd, GAIL (India) Ltd and Gujarat State Petroleum Corp. Ltd to set up terminals at ports for importing LNG.
For ports, it is an opportunity to diversify the cargo mix as part of a de-risking strategy.
Many of India’s state-owned ports have seen petroleum, oil and lubricant (POL) cargo growth—once their mainstay with a share of 31% of overall cargo—stagnating even as the country’s crude oil imports grew year after year. This is because oil refiners erected so-called single-point mooring (SPM) in mid-sea where oil super tankers can come and unload the crude which is then taken to refineries through pipelines.
This is a cost-effective way of importing crude as oil super tankers—which cannot be accommodated at many Indian ports due to depth restrictions—allow economies of scale as larger quantities can be imported at a time, leading to savings in freight costs for importers.
Single-point mooring is a loading buoy anchored offshore that serves as a mooring point and interconnect for oil tankers loading or off-loading gas or liquid products. They are capable of handling any ship size, even very large crude carriers (oil supertankers).
LNG as a cargo provides stable business for ports for longer periods as it is not exposed to the policy and regulatory risks associated with other cargo such as iron ore. Since July 2011, India’s Supreme Court has imposed a ban on mining iron ore to check environmental damage arising from rampant illegal mining. Besides, there are restrictions on export of iron ore. This has drastically reduced iron-ore loadings at India’s ports.
Setting up LNG terminals is not subjected to the tortuous bidding process witnessed for cargo such as containers because the deals are finalized through negotiations between the port and the LNG importer.
It is worth noting that most of these LNG import terminals, with the exception of Ennore and Paradip, are proposed to be set up at ports outside the control of the Indian government. There are two main reasons for this. Ports that are owned by India’s states but are given to private firms for development and operations have the freedom to set rates for services provided, unlike those owned by the Indian government.
This holds true for Ennore also. It is the only port among the 13 owned by the Indian government that is run as a company, while the others are run as trusts. Ennore as such is outside the ambit of the tariff regulator for the Indian government ports that function as trusts.
Secondly, ports owned by the states have vast tracts of land to support activities surrounding the re-gasification of LNG.
Erecting an LNG terminal will cost as much as Rs.2,000 crore. Much of this money will be invested by the entity importing the fuel, with the port developers providing the basic infrastructure and taking small equity stakes in such ventures.
Understandably, ports are going all out to woo LNG importers to set up terminals that re-gasify LNG at their respective locations.
Source:- livemint.com
Estimated construction cost of a yet to be constructed flat treated as part of sales consideration
IT : Total consideration received or accrued has to be assessed to capital gain tax in year of transfer
ITAT affirms rejection of books as not furnishing adequate particulars to deduce correct operating r
IT: Where assessee had not maintained any stock register and there was no basis to verify material consumption, assessee's books of account as maintained were not amenable to yield correct operating result and therefore, same was rightly rejected under section 145(3)
Sc Mulls Appointing Panels To Look Into Goa Iron Ore Mining
31-Oct-2013
A project from the nutrition division of Saint John’s Research Institute (SJRI), Bangalore, for improving early brain development of children in low-resource countries is one among 14 projects from 10 countries selected by Grand Challenges Canada (GCC) for fund support.
The “bold new idea” from SJRI to develop an iron-fortified biscuit gets Canadian dollars 2,70,000 (Rs.1.60 crore) under the ‘Saving Brains of Developing Countries’ programme promoted by the GCC.
The GCC, funded by the government of Canada, is an organisation dedicated to supporting bold ideas with big impact on global health.
Pratibha Dwarkanath, who is the principal investigator of the SJRI project, told The Hindu that India had one of the highest rates of anaemia globally: over 79 per cent of children aged 6 to 8 months and 58 per cent of the 26 million pregnant women each year. Some 17 million of these women had access to iron pills, yet 11 million did not take them for the recommend time period. The reason being the pill was big and tasted metallic.
Anaemia, a decrease in red blood cells leading to lack of oxygen in organs, results from micronutrient deficiencies, most often iron. She said that iron deficiency anaemia dramatically affected the health of a pregnant woman and her unborn baby, increasing the risk of death and sickness during childbirth, including haemorrhage and low-birth weight. Long-term iron deficiency anaemia delayed psychomotor development and impaired cognitive development in infants, preschool, and school-aged children.
Moreover, the researchers said, the effects of anaemia were “not likely to be corrected by subsequent iron therapy... anaemic children will have impaired performance in tests of language skills, motor skills, and coordination, reportedly equivalent to a 5 to 10 point deficit in IQ.”
Part of the answer for this could lie in iron-fortified biscuits, indistinguishable in taste from popular Indian biscuits, for use by pregnant women. Dr. Dwarkanath said the new biscuit was more likely to be used by previously non-adherent pregnant women, and increase iron stores in newborns, “which translates to more sustainable and protected early brain development.”
After extensive consumer research, the nutrition team led by A.V. Kurpad and the project collaborators, New York-based Violet Health Inc., developed several prototypes specifically designed keeping in mind the tastes and preferences of pregnant women in India.
“We estimate our solution to be more cost-effective than the iron pill, while reaching more anaemic women and their children. After proof of concept, we anticipate a scaled trial in Karnataka within three years and reducing anaemia in women and infants,” Dr. Dwarkanath said.
Laureen Harper, honorary chairperson of ‘Saving Brains,’ said the programme promoted the fulfilment of human capital potential by focussing on interventions that nurtured brain development in the first 1,000 days of life. The goal of the programme was to unlock the potential of children by developing and scaling up products, services, and policies that protected and nurtured early brain development in an equitable and sustainable manner, she said.
Source:- thehindu.com
Natural Rubber Prices Hit New Low, Domestic Producers Want Ban On Import
31-Oct-2013
Rubber prices have been primarily responsible for the profit margins of tyre companies despite a sharp decline in demand from original equipment customers - namely vehicle manufacturers. Although the Indian passenger vehicle industry has been stuck in first gear with car companies offering huge discounts and even taking production cuts to clear dealer inventory, tyre companies have more or less reported good quarterly numbers riding on the back of low global prices of its main input - rubber. Rubber prices started falling from January 2012 and hit a low of Rs 160 per kg in January 2013. Since then, though, it has been on the rise and is now in the range of around Rs 190-195 per kg which is near the January 2012 price level. Of late however rubber prices have been southward bound again so much so that rubber growers are now demanding an import ban. According to tyre industry sources rubber prices are now down to Rs 159/kg which is around the same level as the January low.
According to the All India Tyre Dealers Federation (AITDF) domestic tyre prices "despite having drop in last one & half month by Rs 30 per kg to Rs 159.00 per kg remain still Rs 10 per kg higher than the international prices". Tyre dealers are therefore demanding a price cut since tyre companies have in the recent past hiked prices on account of rising cost of natural rubber. "Two years ago the domestic tyre makers brought about punishing tyre price hikes during the period when rubber price touched Rs 240 per kg to the tune of 26%-30% for all categories of tyres," said SP Singh, convenor AITDF. "At that time both rubber growers and tyre makers benefitted from indiscriminate price rise of rubber and tyres. In between, the rubber price has touched a low of Rs.160 per kg in last 12 months, which now is prevailing at Rs.159.00 per kg. No government agency has come up with any cogent cost related reason which supports the astronomical rise in the domestic rubber price to Rs 240 per kg. and arbitrary hikes in tyre prices."
Tyre companies for their part say natural rubber is only one of the inputs in tyre production. Vikram Malhotra, VP-sales & marketing, JK Tyres had earlier said, "Natural rubber is not the only raw material that is critical to tyre manufacturing. We're importing synthetic rubber and oil and forex fluctuation is beating us with the 20% slide in the rupee. We have taken a big hit in both the first and second quarter due to the forex situation."
Source:- timesofindia.indiatimes.com
Benefit of confusion due to a Circular and amendment made to Sec. 54EC goes to assessee; sec. 234B i
IT: Where due to confusion created by CBDT circular and amendment made in section 54EC, assessee was under bona fide belief of availing exemption, and did not pay capital gains tax, levy of interest for default in payment of advance tax was to be restricted
Germany Farm Gear Maker To Make India An Export Hub
31-Oct-2013
German farm equipment maker Lemken GmbH, which specialises in pre-harvesting implements such as reversible ploughs, plans to make India its export hub to cater to markets in Asia and Africa.
Lemken, which set up a manufacturing unit in Nagpur with an investment of Rs 60 crore last year, expects to start exports to south China and African countries from next year, said Anthony Van Der Ley, CEO, Lemken GmbH.
The 232-year-old German firm also plans to set up a small design team of about eight engineers in India taking advantage of the engineering skills here to customise its products for the local market.
“We are looking at India from a long-term perspective and the market here holds a major potential,” Ley said.
In its first year of operations, Lemken India sold over 350 hydraulic reversible ploughs, which cost around Rs 1.8 lakh each, almost three times higher than mechanical ploughs. Lemken’s equipment is used along with tractors.
The company is targeting to sell 1,000 ploughs next year and also plans to introduce other equipment such as disc harrow, which is used to cut, mix and mulch soil and seed drills among others.
“We use a highly specialised alloy boron steel that enhances the life of our equipment to a great extent, making it more expensive than conventional ones,” said Arvind Kumar, MD and CEO of Lemken India Agro Equipment Pvt Ltd. Currently, Lemken’s products are sold in Maharashtra, Karnataka, Andhra Pradesh and Punjab, while the company is looking at other States such as Uttar Pradesh, Haryana and Madhya Pradesh.
Kumar said the Government should look at extending subsidy, being offered to farm equipments, to technology-intensive farm implements, such as hydraulic reversible ploughs to give a push farm mechanisation.
Source:- thehindubusinessline.com
Eu Protests Against India’S Penal Import Duties
31-Oct-2013
The European Union has accused India of imposing higher penal duties on imports of certain products such as steel and rubber chemicals than what the situation may warrant to protect its domestic industry.
While claiming that its penal duties were in response to aggressive exports by some countries, India conceded that it would look into complaints made on the initiation of safeguard investigation on steel pipes and tubes.
India has initiated the highest number of safeguard investigations in 2013 and half the products being investigated are already subject to anti-dumping duties, the EU pointed out at a recent meeting of the World Trade Organisation’s (WTO) Safeguards Committee.
The WTO allows members to impose penal duties called anti-dumping duties if it can be proved that the imports are being dumped into the country at lower prices than those prevailing in domestic market of the exporting country.
A second penal duty known as safeguard duty can be imposed by a member in case there is a sharp increase in imports of a product over a period of time leading to disruption in the domestic market.
Recently, India notified four safeguard investigations – on seamless pipes, tubes and hollow profiles of iron or non-alloy steel, on sodium nitrate, on methyl acetoacetate, on phthalic anhydride, and on PX-13 (a rubber chemical).
The safeguard initiation on steel products has led to protests from a number of WTO members including the EU, Russia and the US.
The EU said that it was very concerned that in the steel case, imports had decreased and that there was no evidence of injury caused by imports on the domestic industry.
Russia shared EU’s concerns in the steel case, and pointed out that the increase in imports was caused by just one country – China. Japan also expressed concern.
India’s representative said that the concerns would be conveyed to the Government and a reply would be given.
On India’s investigation on PX-13, the EU said that the extension of the safeguard measure would not be warranted, as this product was already subject of an anti-dumping duty.
The US, too, sought clarification regarding the investigation. India said it would forward the questions to New Delhi.
Over the last few years, India has resorted to imposition of safeguard duties on cheap imports instead of anti-dumping as it is more difficult to prove that dumping has actually happened.
While most of the safeguard duties are imposed to protect Indian producers against cheap imports from China, other countries, too, get affected as these duties are applicable to all.
Source:- thehindubusinessline.com
Gold Demand In Indian Festival Season Seen Lower On Import Curbs
31-Oct-2013
Gold purchases in India, the biggest consumer, will probably be less in the festival season this year as import curbs reduce supplies and demand cools after surging in April when prices slumped into bear market.
Sales of coins and bars may decline to as little as 25 percent of purchases a year earlier, according to the All India Gems & Jewellery Trade Federation. Buying and gifting gold in the country is considered auspicious and the most favorable time is today, the festival of Dhanteras, two days before Diwali.
Gold is heading for its first annual decline in 13 years as some investors lost faith in bullion as a store of value and the U.S. Federal Reserve indicated that it will reduce monetary stimulus. The precious metal rose 70 percent from December 2008 to June 2011 as the Fed pumped more than $2 trillion into the financial system to boost the economy. Consumption in India, which imports almost all the bullion it uses, accounted for 20 percent of global demand in 2012, the World Gold Council says.
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“Jewelers say that demand for coins and bars this season could be only 25 percent of what they saw in the festival season last year and jewelry demand will be moderate.” said Haresh Soni, chairman of the federation which represents about 300,000 jewelers, bullion dealers and brokers. “Jewelers are quite alert that if they sell coins, they will not get raw material to make jewelry,” he said on Oct. 30.
Import Curbs
Buying from October to December was 261.9 tons last year, with coins and bars making up about 40 percent of the total, according to the World Gold Council. Imports slumped after the government linked shipments to re-exports in July and increased taxes on overseas purchases. Prime Minister Manmohan Singh tightened the curbs after rising demand helped to widen the nation’s current-account deficit and pushed down the rupee.
“Demand is a little bit lesser this year as the wedding season was much longer last year,” said Mehul Choksi, chairman of Gitanjali Gems Ltd. (GITG), from Mumbai. “A lot of purchases were advanced earlier because of the price fall in April.”
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Gold for immediate delivery in London slumped 21 percent this year to $1,324.31 an ounce and reached $1,180.50 on June 28. Futures on the Multi Commodity Exchange of India Ltd. (MCX) dropped 1.2 percent to 29,793 rupees ($484) per 10 grams yesterday, 15 percent below the record 35,074 rupees on Aug. 28.
Purchases of gold and silver fell to $800 million in September from $4.6 billion a year earlier, said the Commerce Ministry. The government plans to keep imports to 800 tons in the financial year ending March 31 from 845 tons a year earlier, Economic Affairs Secretary Arvind Mayaram said Oct. 1.
Lower supply boosted premiums to a record in India, said Soni. The fees that jewelers pay to buy gold from banks and bullion dealers were $120 an ounce higher than the London cash price now compared with a discount of $60 in September, he said.
Source:- businessweek.com
Rupee At 3-Week Low; Global Dollar Gains Aid
The rupee hit a three-week low in early trade. The pair hit 61.96, highest since October 10. It is currently trading 61.83/84 versus Thursday close of 61.50/51.
The pair largely tracking global dollar gained with Dollar index up 0.17 per cent at 80.341.
The euro nursed heavy losses early in Asia on Friday, having suffered its biggest one-day drop in over six months as a shock slowdown in inflation piled pressure on the European Central Bank to further stimulate the economy.
Foreign investors bought Indian shares worth 18.75 billion rupees on Thursday, their biggest single-day purchase since May 21, provisional exchange data showed, remaining net buyers for a 20th consecutive session, bringing their total buying to nearly 181.92 billion rupees during that period.
Dealer tips 61.70-62.50 band for the session.
Source:- profit.ndtv.com
Winding up petition not maintainable as co. paid its admitted liability but disputed on quality of s
CL : Winding up petition against company would not be maintainable if company paid its admitted liability but disputed a sum as regards quality of goods supplied
SC: Voluntary disclosures don't absolve one from concealment penalty; plea as to 'buy peace' is irre
IT : Voluntary disclosure does not release assessee from mischief of penal proceedings under section 271(1)(c)
Educate firms to avoid claims rejection, says EPFO to field offices
NEW DELHI: Retirement fund body EPFO has asked its field staff to educate firms about the process of various claims like transfer of PF and pension settlement, to avoid rejection on such applications.
Employees' Provident Fund Organisation (EPFO) has asked its field staff to identify all those firms whose workers' claims rejection ratio is over 20 per cent and educate them about the process to avoid that.
"...regional and regional sub office may approach all such employers where rejection ratio of claims is high and EPFO office may educate and train the employers who in turn may guide the employees correctly at the time of filing claims," an official circular stated.
The rejections of claims delays the process of settlement and causes inconvenience to the subscribers of the EPFO and increased the organisations's work load unnecessary.
According to the circular, the employers play significant role in the process of claim settlement of beneficiary. At the time of verification of claims the employer has the opportunity to detect obvious mistakes in furnishing the relevant information by the claimants.
During 2012-13, 107.62 lakh claims were settled, out of which 88 per cent of claims were processed within the prescribed 30 days as per the body's citizen charter.
EPFO which has the subscribers base of over five crore, is expecting 1.2 crore claims in 2013-14, including around 13 lakh PF transfer claims. The body has planned to settle online around 10 lakh transfer claims this fiscal.
Earlier this month, the body has started the service of online filing of PF transfer claims on October 2.
TP method accepted by revenue in subsequent year would equally apply to relevant year if facts remai
IT/ILT : Where in subsequent year, revenue accepted CUP method as most appropriate on identical fact, same should have been applied for relevant assessment year
Omission to mention status of assessee or mentioning wrong block period doesn’t invalidate sec. 158B
IT : Block period would begin from date when assets came into possession of Assessing Officer and not from date of requisition
Concealment penalty upheld as assessee couldn’t prove genuineness of gift and creditworthiness of do
IT: Penalty under section 271(1)(c) was justified when assessee had failed to establish genuineness of gift and creditworthiness of donors
No. Sec. 69B additions if report of independent value couldn't be produced and report of DVO was fou
IT : Where valuation report of independent valuer seized during search, on which Commissioner (Appeals) placed reliance, was not on record, addition on account of unexplained investment in property could not be made on basis of DVO's valuation which was found to be unreliable both by Commissioner (Appeals) and Tribunal
FinMin allows Stock Exchange membership to LLPs; no membership if partners possess less experience
SEBI : Securities Contracts (Regulation) Second Amendment Rules, 2013 - Amendment in Rule 8
Assessee can’t raise plea of genuine hardship while seeking waiver of interest if he has sufficient
IT : Where assessee had cash balance, amounts due from debtors, amount due towards export incentives and also substantial assets, no case for genuine hardship was made out and, therefore, assessee's application seeking waiver of interest under section 220(2A) was to be rejected
Purchase of land by a Co. using public contribution tantamount to ‘Collective Investment Scheme’
SEBI: Pooling of contributions by company from members of public and utilizing same for purchase of land such that operation of lands was completely with company, amounts to running a Collective Investment Scheme
HC declined to entertain writ as impugned issue came to an end with decision on stay application by
IT : Once application for stay of recovery of tax had been decided by Commissioner (Appeals) in appeal against assessment, writ petition could not be maintained for same cause of action
Chartering aircrafts is a supply of tangible goods for use service
ST : Chartering of aircrafts, where aircrafts are provided on time charter basis and charges are levied according to use and distance travelled and not on basis of number of passengers, is, prima facie, supply of tangible goods for use service
Employees training exp. to run an extended unit of an existing business is an allowable expenditure
IT : Training expense on new manufacturing unit which was extension of existing business were allowable as revenue expenditure
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