CL: Mere revival of corporate existence of erstwhile company in liquidation would not be sufficient for intervention of Court to grant stay of winding up
Friday, 8 November 2013
Going abroad? Pay for insurance from own account
MUMBAI: Buying international plane tickets for family members online is a breeze, but buying overseas mediclaim cover for others now requires advance planning. Insurance companies are insisting that electronic payment for policies must come from the policyholder's own account.
Nikhil W, who was trying to buy a last-minute overseas insurance policy for his father, discovered that the online system was not accepting a payment from his account. His parents who were travelling on their own had not activated any electronic payment services. Earlier, he had paid for his parents when he was part of the group that was travelling.
Insurers are invoking the principle of 'insurable interest' for rejecting payment through third-party accounts. Insurance interest means that the person buying insurance needs to have a financial interest in the subject of insurance.
This restriction is a challenge for those who have not bridged the digital divide considering that online payments are becoming the norm for many categories of policies such as auto, health and overseas travel. Also, in cases of policies where the commission is low, the insurance agent is reluctant to make the effort to collect the cheque.
"Any person paying the premium needs to have insurable interest. The insurance policy is a contract between the insurer and the policyholder and third-party cheques are not accepted," said K K Mishra, MD, Tata AIG General Insurance. He added that in the case of people who do not have net banking or credit cards, the company sends across a representative to collect the cheque.
According to Sanjay Datta, head of underwriting and claims at ICICI Lombard, the company accepts cheques of family members in family floater policies, but unrelated parties cannot may payments in respect of individual policies. He, too, cites the principle of insurance interest for rejecting third-party payments. In the case of life insurance too, almost all companies - including LIC - require that the online premium be paid from the policyholder's account.
However, there appears to be a mixed view in regulatory circles.
According to regulatory sources, the main reason behind the ban on third-party cheques is to avoid disputes in future. In the case of cheque payment, the insurance company is on risk from the time it receives the cheque. In case the cheque is not honoured, the company can commence recovery proceedings under Section 138 of the Negotiable Instruments Act. But if the cheque is paid by a third party, recovery becomes difficult.
However, a retired regulatory official said, insurers are mixing up the person who is facilitating payment with the person who is buying insurance.
"How does it matter if the payment is made by a third-party. The insurance company does not have any problem accepting a demand draft which could have been paid by a third-party or if a third-party has deposited funds in the buyer's account".
CBI is not a police force
CL : CBI is neither an organ nor a part of the DSPE and the CBI cannot be treated as a 'police force' constituted under the DSPE Act, 1946
Business profits arise when a disguised transaction of sale of shares is opted for to transfer a bus
IT: Transfer of shares with all pervasive control over business being entrusted to purchaser and to complete exclusion of assessee with a non-compete clause fell within realm of section 28(va)
Ibm India Exported Software Minus Lease Lines.
Did IBM India export software in 2008-09? Though the company says it did, the claim may not run deep as telecom service companies have said that they did not give any leased lines to IBM India to enable the IT giant to export its software.
Software is generally exported through leased lines — dedicated cables — that transmit data and connect the seller to the buyer in different locations. The telecom service providers’ statement during the tax department’s probe is significant in light of the income tax department’s notice to IBM India last week for evading crores of rupees in taxes under an export promotion scheme.
In response to dna’s questionnaire, IBM India did not specifically respond to queries on leased lines and its foreign bank account. However, the company’s spokesperson said: “IBM does not agree with the tax department’s claims and will aggressively defend itself through the appropriate judicial process.”
IBM India not only under-reported revenue of Rs7,288 crore in 2008-09 to evade tax to the tune of Rs5,357 crore but it also showed sales in India as exports to claim tax exemption under the STPI scheme, according to the tax department. Under the Software Technology Park of India (STPI) scheme, IT companies are eligible for 100 per cent tax exemption on income generated from software exports as defined in section 10A and 10B of the I-T Act 1961 or under 10AA if they are located in a special economic zone (SEZ). IBM India has several units in STPIs and SEZs across the country that claim tax exemption on income from software exports.
IBM India claimed that it had exported software in 2008-09. But telecom companies, VSNL (Tata) and AT&T and others, denied providing leased line services to IBM India to export software from their eligible Software Technology Park of India or special economic zone locations, such as in Bangalore, Hyderabad, Gurgaon, etc. Rather, the companies gave it connection only within the country, according to the tax department’s notice.
In order to milk the export promotion scheme, IBM India also violated the Foreign Exchange Management Act and deceived the Reserve Bank of India. These and other violations came to light after the tax department initiated a thorough probe into the company’s affairs when IBM India failed to furnish software development agreements, software export forms (softex) despite several summons and show cause notices. The investigation reveals that thousands of invoices submitted by IBM India to STPI and SEZ authorities were different from the invoices referred to in its HSBC bank account in New York in which sale proceeds were credited. The department suspects these to be “bogus invoices”.
STPI and SEZ officials’ complicity in the case is apparent from the fact that even though IBM India did not have software development agreements, STPI and SEZ authorities cleared thousands of the company’s invoices and softex forms between 2004 and 2012. The tax department’s notice observes that STPI and SEZ officials “rendered a valuable co-operation to IBM India,” especially between 2010-2012 when they hurriedly cleared IBM India’s invoices and softex forms to cover up the irregularities as the same was being probed by the tax department.
The department’s probe also revealed that IBM India’s HSBC bank account in New York had been opened without the mandatory permission from the RBI. It was through this account that the company had been routing its alleged export proceeds. When the tax department brought this violation to IBM India’s notice, the company swiftly obtained RBI’s approval by submitting false certificates and documents to the central bank. It was only after the tax department intervened that the RBI immediately revoked its permission and asked the department to “take any action as it deems fit”.
IT giant’s claim & denial by telcos
IBM India said it exported software in 2008-09, but VSNL (Tata) and AT&T and other telecom companies denied the claim. IBM India’s spokesperson told dna that the IT giant will defend itself using the appropriate judicial process.
Source : dnaindia.com
Exim Bank, Sme Chamber Tie-Up For Export Promotion
Exim Bank and SME Chamber of India have signed Memorandum of Cooperation for promotion of exports.
They will also focus on how to channelise export finance, identify export potential market, carry on research and survey on various products in demand in different countries and to provide training and education on market, export formalities as well as to resolve issues.
Exim Bank Chairman and Managing Director TCA Ranganathan and Chamber President Chandrakant Salunkhe signed the memorandum on Thursday.
Salunkhe pointed out that this partnership will be useful to provide support and assistance to small and medium entrepreneurs (SMEs) from manufacturing sector to identify opportunities for technology transfer, joint ventures, new project exports, acquiring new technologies and to understand new market with quality and competitiveness.
Ranganathan said that the SMEs can take advantage of foreign exchange loans at low rate of interest and connect with potential market through Exim Bank’s regional branches in various countries. Exim Bank has product-wise and country-wise market surveys which will be useful for SMEs to enter into specific market with knowledge of demand and suppliers, price, quality and competition.
Besides guiding and supporting SMEs for export promotion, Exim Bank will also help them in the import of capital goods for production of quality products for domestic and international markets, he added.
Source:- thehindubusinessline.com
Coming Down To Earth: Why Solar Power Isn’T A Big Deal.
The government targets 20 GW of solar power by 2022. With India importing almost 75% of its crude oil and 25% of its coal needs, it is imperative that solar energy should be given high priority. The cost of solar power has fallen from Rs 18 per unit a few years ago to Rs 7.50, and is about to reach grid parity — a big accomplishment to promote clean energy. But one must look critically at India's solar energy market and its distortions.
Is the target too ambitious? Does the targeted capacity addition reduce India's import dependence? Of late, the country has been flooded with cheap Chinese panels. Chinese companies get cheap capital, subsidised power, free land and other incentives for exports. The US solar industry has also penetrated the Indian market by exporting cheap thin-film solar panels. US banks offer low interest rates (about 3%) and along repayment schedule (of up to 18 years) to Indian solar project developers to buy thin-film panels manufactured by US companies.
This is lucrative compared to high interest rates offered by Indian banks. Today, 80% of local manufacturers are in a state of forced closure, while US makers are getting orders from Indian solar power developers.
This has skewed the Indian market in favour of thin-film panels imported from the US; almost 60% of panels installed in India are thin-film, while the global figure is only 14%.
So, the reduction of the cost of solar power is not due to a technological breakthrough in terms of enhanced conversion efficiency, but due to the dumping of cheap imported solar cells and modules. Such high import dependence will pose a serious threat to India's energy security.
To protect the solar industry, the government has initiated anti-dumping investigations on imports of solar cells from China, Malaysia, Chinese Taipei and the US. Anti-dumping duties ranging from 18.32% to 249.96% on Chinese solar cells and panels have already been imposed by the US, while the EU imposes provisional anti-dumping tariffs on Chinese solar panels.
These duties may be welcomed by Indian manufacturers but it will raise the costs of solar power, a cause of concern for project developers. Questions have been raised if domestic solar manufacturers have the capability to cater to the growing needs in terms of both price and quantity.
As of 2012, the Indian cell manufacturing capacity was only 700 MW, much below the desired capacity. Also, Indian cell manufacturing technology lags. The quality of cells manufactured in India is inferior to global standards and they usually don't come with warranties that are critical for any solar project.
Acomplex tax structure also makes domestic cell production costly and unviable. The overall duty on raw materials and products such as silicon wafers is 10-15%. This duty is not equally imposed on finished silicon modules and cells. So, it is cheaper for the Indian module suppliers to buy internationally produced cells than to purchase raw material.
Once anti-dumping duties are imposed, cell manufacturers will have to procure raw materials from international markets and it will make them more costly. Thus, the imposition of anti-dumping duty and heavy reliance on domestic solar manufacturers would pose a serious impediment on India's solar mission.
We can learn from countries like Germany, which had an ambitious solar energy programme. In Germany, the high rate of returns on solar projects encouraged huge investment for around 25 GW though solar power contributes only 4% of the total electricity demand. Solar power is still the least efficient among Germany's other renewable energy technologies, but 50% of total green energy subsides go to solar power.
To address unaffordable and unreliable solar power, which increases power tariff and government's subsidy, Germany renewed its focus on renewable technologies.
Source : economictimes.indiatimes.com
Jsw Steel Oct Crude Steel Output Up 39% On Yr
JSW Steel Ltd today said its crude steel production in October rose 39% on year to 1.06 million tonne.
In a notification to the BSE, the company said that while its flat steel production last month was up 96% on year to 867,000 tonne, production of long steel products declined 10% on year to 149,000 tonne.
Long steel products are mainly used in construction and infrastructure segment, while flat products find wide application in the auto sector.
JSW Steel today reported a 9% growth in its crude steel production at 10.62 lakh tonnes (LT) for the month of October.
The company, headed by Sajjan Jindal, had produced 9.71 LT of crude steel in the same month last year. The production numbers include steel production from Dolvi facility of erstwhile JSW Ispat Steel, which has now been merged into JSW.
During the first seven months of the current fiscal, the company has achieved crude steel production of 6.94 MT, registering a growth of 4.69% over the corresponding period of last year.
In 2012-13, JSW had produced 8.52 million tonnes of crude steel despite continuation of the iron ore crisis in Karnataka.
Shares of the company were trading at Rs 866 apiece on the BSE at 1400 hours, down 0.34% in an overall weak market.
Source:- business-standard.com
Indian Oil Corporation Net Dips 82% In Q2, Opposes Selloff
IndianOil Corporation on Friday said it is opposed to the government's move to sell 10% stake when its share price is "unduly depressed", even as the company reported an 82% drop in net profit for the second quarter.
Net profit dropped to Rs 1,684 crore during the July-September quarter from Rs 9,611 crore in the year-ago period. "The decrease in profit is mainly on account of exchange loss of Rs 2,158 crore against the exchange gain of Rs 2,289 crore in the corresponding previous quarter," IOC chairman R S Butola said.
Also, the company had to absorb Rs 413 crore of loss on diesel and cooking fuels. IOC share closed at Rs 213.20 on the BSE, or 45% below the 52-week peak of Rs 375 reached on January 18.
The company lost Rs 18,291 crore on selling diesel, cooking gas and kerosene during the second quarter. It received Rs 8,634 crore discount from state-run oil producers and another Rs 9,243 crore cash from the government as subsidy. Even after these, the company had an unmet revenue loss of Rs 413 crore.
On disinvestment, Butola said, "We had given our inputs (on the disinvestment) in October... We believe prices are unduly depressed at this point of time... They (government) would like to assess the market conditions and response for themselves. Government decision (on disinvestment) is still awaited."
The sale of 19.16 crore IOC shares at the current price would fetch the government about Rs 4,000 crore. Government held 78.92% in the country's largest oil refiner as on June 30.
The roadshows for the stake sale were to be held from October 6 but were put off following opposition from IOC and its parent oil ministry which held that the country's crown jewels cannot be sold at low prices.
Butola said there may be an upside in the share price if the government were to accept the Kirit Parikh committee recommendation on fuel pricing which seeks to address current uncertainties such as lack of a transparent subsidy-sharing mechanism and fluctuation in profitability.
A share sale under present conditions could fetch a low price and would further dent IOC's efforts to raise loans for crude oil imports.
Source:- timesofindia.indiatimes.com
Rbi Permits Third Party Payments For Export, Import Transactions
The Reserve Bank of India (RBI) on Friday permitted third party payments for export/import transactions subject to certain conditions.
Among the key conditions RBI said that for export transaction firm irrevocable order backed by a tripartite agreement should be in place while for import transactions firm irrevocable purchase order / tripartite agreement should be in place.
RBI also said that for the export as well as import transaction third party payment should come from a Financial Action Task Force (FATF) compliant country and through the banking channel only.
Source:- business-standard.com
Row Over Export Of Fresh Vegetables To Saudi Arabia
Saudi Arabia, the fifth-largest importer of fresh vegetables from India, has said pesticide residues in the commodity are higher than permissible levels. It has threatened to take strong action in the near future.
In an advisory to the Agricultural and Processed Food Products Export Development Authority (Apeda), the government of Saudi Arabia said high levels of pesticide residues were detected in two consignments of green chilli. "It has been brought to the notice of authorities of KSA (Kingdom of Saudi Arabia) that in some recent consignments of vegetables from India, there have been interceptions of higher than permissible levels of residues of pesticides. If the situation persists, the government of KSA will take strong action in the near future," the advisory said.
Saudi Arabia accounts for Rs 92 crore of annual imports of fresh vegetables from India. With Rs 284 crore of imports, Pakistan was the largest importer in 2012-13, followed by the UAE (Rs 255 crore) and the UK (Rs 151 crore). With Rs 143 crore of fresh vegetable imports, Nepal was fourth on the list.
“Volume is not a worry. The only worry is the action, as prescribed by the Saudi Arabian authorities. If they ban vegetable imports from India, other countries in West Asia may follow, impacting India's overall vegetables exports severely,” said Vinod Kaul, deputy general manager and head (horticulture), Apeda.
Though Saudi Arabian authorities haven't specified the permissible limit of pesticide residue, it is usually understood the specifications by the European Union are applicable. Specifications by Codex, as well as other global norms, are also understood to be applicable on fresh vegetable exports to Saudi Arabia.
In an advisory to exporters, Apeda has advised adherence to the import requirements of Saudi Arabia, adding products should be tested before exports. “As a region, West Asia is very important to us. We, therefore, do not want any strong action by Saudi Arabia, and its repercussion on other countries in the region. Hence, we have advised our members to test export oriented goods carefully before shipping,” said Kaul.
West Asia accounts for about a third of India's overall fresh vegetable exports. I 2012-13, total exports of fresh vegetables stood at Rs 1,334 crore, a rise of 2.7 per cent compared with Rs 1,299 crore in 2011-12.
Source:- business-standard.com
India Imported 27% More Coal In September, Data Shows
India, the world’s third-largest coal user, increased imports of the fuel in September by 27% from a year earlier.
Adani Enterprises Ltd, Tata Group, JSW Group and Steel Authority of India Ltd (SAIL) were among companies that received 12.23 million tonnes last month, compared with 9.6 million tonnes a year earlier, according to Interocean Group.
India received 9.15 million tonnes of steam coal and 3.08 million of the coking variety at 22 of the 28 ports listed by Interocean, a shipper based in New Delhi. Imports in September were 6% lower from August when it imported 10.35 million tonnes of steam coal and 2.66 million tonnes of coking, according to Interocean.
Mundra, the western Indian port operated by Adani Group, India’s biggest coal importer, received the most volumes in September at 2.67 million tonnes, according to Interocean. Dahej, also on the west coast, received about 1.01 million tonnes. The ports of Krishnapatnam, Gangavaram and Visakhapatnam, all on the eastern coast, took in about 1.12 million tonnes, 979,625 tonnes and 867,868 tonnes respectively, the data show.
Indonesia was India’s biggest supplier at 7.95 million tonnes, as per Interocean. Australia and South Africa shipped 2.33 million tonnes and 1.19 million tonnes, data show. US, Canada and New Zealand accounted for about 392,092 tonnes, 156,835 tonnes and 98,038 tonnes. India also imported 58,439 tonnes from Mozambique and 68,075 tonnes of Russian coal.
The power-station coal at Australia’s port of Newcastle, the Asian benchmark price, climbed 1.6% in September to $78.30 a tonne, according to data from IHS McCloskey.
Source:- in.reuters.com
Rupee Falls 6 Paise To 62.47 Against Dollar; Down For Fourth Week
The rupee depreciated by six paise to 62.47 against the dollar on Friday amid weak local equities and sustained demand for the US currency to post its fourth weekly decline.
The rupee, which ended at an almost six-week low, failed to get direction from the dollar index, which was up 0.02 per cent against a basket of major global rivals ahead of US jobs data. However, sustained capital inflows limited the rupee’s fall, a forex dealer said.
The local currency opened lower at 62.65 a dollar from the previous close of 62.41 and dropped to 62.75 as domestic stocks fell for the fourth day amid heavy dollar demand from importers.
The rupee recovered to 62.46 on late dollar sales by exporters and continued foreign fund inflows in equities. It closed at 62.47, a drop of six paise or 0.10 per cent. In the past three days, it had plunged 85 paise or 1.38 per cent.
Economic Affairs Secretary Arvind Mayaram said Thursday weakness in the rupee was because oil marketing companies (OMCs) had shifted part of their dollar purchases to the open market from an RBI forex swap window. He said the rupee would stabilise in one or two days on strong inflows of foreign currency deposits from non-residents and export realisations.
“Negative stock markets and dollar demand from OMCs which have started returning to the market kept the rupee under pressure. On the global front, strong GDP growth posted by the US helped the US dollar index to move to its six-week high, which led to weakness in Asian currencies,” said Abhishek Goenka, CEO of India Forex Advisors.
The 30-share benchmark Sensex today dipped 156.62 points.
Overseas investors picked up shares worth Rs 479.24 crore on Thursday, according to provisional stock exchange data.
“Rupee has depreciated for the fourth week in a row and is expected to depreciate further in coming days due to the country’s external deficit and the impact of a possible tapering in the US Federal Reserve stimulus programme,” said Pramit Brahmbhatt, CEO of Alpari Financial Services (India).
Source:- thehindu.com
Sum received by assessee from letting out of office to fulfil financial needs of business is busines
IT : Sum received by assessee from letting out of office to fulfill financial needs of business is business receipt
Lease premium paid to acquire a leasehold land for 60 years isn’t a rent; no TDS under sec. 194-I
IT: Lease premium paid by assessee to CIDCO for acquiring leasehold land for a period of 60 years in order to develop a Special Economic Zone (SEZ) amounted to capital expenditure which did not fall within meaning of 'rent' under section 194-I and, therefore, assessee was not liable to deduct tax at source while making said payment
MCA paves the way for electoral trust cos. to make political contributions without sec. 293A prohibi
Companies Act, 1956 : Section 293A of The Companies Act, 1956 - Political Contributions - Prohibitions and Restrictions Regarding - Blanket Exemption of Specified Provisions of Section 293A To Companies Incorporated With Name Containing Phrase 'Electoral Trust' Under Electoral Trusts Scheme, 2013 and Granted License Under Section 25 of Said Act
Registration to trust can’t be denied for earning profits as long as it applied income for charitabl
IT: Assessee would be entitled to enjoy benefit of registration under section 12AA so long as it is established that income of assessee-society has been applied for charitable purposes as per section 11
Death certificate gets legal heir on shareholder’s register if original shareholder dies without a w
CL: Where a shareholder who has not appointed a nominee, dies intestate, company on receipt of written request from legal heir, accompanied by certificate evidencing death of shareholder and Succession Certificate or Letter of Administration, has to register shares in name of said legal heir
Registration to trust can’t be denied for earning profits as along as it applied income for charitab
IT: Assessee would be entitled to enjoy benefit of registration under section 12AA so long as it is established that income of assessee-society has been applied for charitable purposes as per section 11
HC deleted sec. 68 additions as it was founded on mere doubts on genuineness of agricultural income
IT: Where agricultural activities on land was accepted for earlier years, same could not be doubted in subsequent year in absence of cogent evience; hence, cash sale of crop could not be added as cash credit
HC grants extra time to assessee for repatriation of forex realizing economic crisis in Russia
IT: In view of fact that due to disintegration of USSR and fall in value of Russian currency, market conditions in said country had become very tight and buyers were unable to remit payment within time and, therefore, assessee's application seeking extention of time to realize convertible foreign exchange in India was to be allowed
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