IT: Where assessee-institution imparting education in field of nursing, claimed registration under section 12AA, in view of fact that assessee was charging nominal fee from students and, moreover, hostel facility run by it for students was only incidental to its main objective, it was to be concluded that assessee's activities were chartiable in nature and, thus, its claim for registration was to be allowed
Wednesday, 13 November 2013
Misc. income having nexus with business activities is composite income for apportionment of agricult
IT: Receipts of premium on import licence, sale of scrap, miscellaneous garden income and excise duty having direct nexus with assessee's activities of growing, manufacturing and selling of tea should be treated assessee's composite income before apportionment thereof in terms of rule 8 of Income-tax Rules
HC preferred to tax capital gain in year of receipt of consideration and not in year of land develop
IT: Capital gains would be charged only on receipt of sale consideration after development of land; and not when agreement was signed for development of land
Sharif Keen For Singh To Visit Pakistan.
NEW DELHI: Prime Minister Nawaz Sharif is keen for his Indian counterpart to visit Pakistan before the next Indian elections due by May, but it could all end up as wishful thinking due to imposing problems, not the least their respective hawks and naysayers, informed sources watching this week’s talks between the two countries said on Wednesday.
Prime Minister Manmohan Singh is widely expected to demit office next year after completing two successive terms. His previous initiatives to normalise ties with Pakistan were stymied by rightwing Hindu revivalist adversaries and also by hawks within his own party.
It is learnt, however, that the Congress party may have given the prime minister complete control of the Pakistan policy, which is potentially the single most encouraging development for any early resumption of peace talks. In that case the truly insurmountable problem is the agenda. What would each side have to offer the other?
Theoretically, Pakistan could see the conviction of a clutch of Muslim extremists in the next few months who were allegedly involved in the Mumbai terror attacks. If that happens, it could help create an improved atmosphere for Dr Singh to justify a visit.
However, the domestic blowback from the possible conviction for Pakistan could be tricky. Led by a powerful pack of vendetta-seekers, revenge violence some expect could not be seen as a happy occasion for Mr Sharif to host anyone for a focused meeting.
Could the Indian PM be yet lured by a Pakistani offer to grant Delhi the most favoured nation status in trade albeit under a less suspect nomenclature? Many Pakistanis do not feel good about the phrase ‘most favoured nation’ being used for ties with India.
If Pakistan ponders these two offers, not without a political cost to its leadership from the naysayers, how would India respond with a matching offer?
Pakistan wants to club the issues of Sir Creek demarcation with troop withdrawal from Siachen, an idea India for whatever reasons feels uncomfortable with. Could there be a thaw on this? For all the talk of resolving the core dispute, the ground has shifted tectonically since both sides pondered certain viable formulas.
The nub of the issue in resolving the Kashmir tangle is the withdrawal of troops on both sides, an idea that already looks defunct with the lurking fallout of developments in Afghanistan, namely the US troop withdrawal, and its ramifications far and wide.
For the moment, however, all eyes are set on the status of the ceasefire on the Line of Control in Kashmir. Would there be a DGMOs meeting as promised by the two prime ministers to fix the issues on the LoC, while also taking the first baby steps towards a military-to-military, face-to-face talk on issues concerning security on the borders.
Little was available on any of this from briefings and statements issued by both sides after Pakistan’s foreign policy adviser Sartaj Aziz met Indian foreign minister Salman Khurshid on Tuesday, followed by a call on Dr Singh on Wednesday.
According to the Indian foreign office spokesman, India took up the issue of LoC ceasefire violations with Pakistan. Mr Khurshid was clearly unhappy over a meeting Mr Aziz had had with Hurriyat leaders at the start of his visit on Sunday. He returned home on Wednesday.
Pakistan’s foreign office spokesman justified the “customary” meeting between Mr Aziz and the Hurriyat leaders, saying such exchanges were staple fare under previous Indian governments too.
Source : dawn.com
Pune Airport To Come Up At Khed Sez, 418 Hectares Need To Be Acquired.
After six years, the site for the proposed Green Field International Airport for Pune at Khed Special Economic Zone, 45 kms from Pune city, has been finalised by the state government. This was decided in a meeting between Prime Minister Manmohan Singh and Chief Minister Prithviraj Chavan held in New Delhi on Wednesday to review the key infrastructure projects in the state.
A statement issued on the Pune Airport said that given the traffic projections in Pune, there is an urgent need to build a new Green Field Airport.
"After discussing different options, it was decided that a new international airport would be developed for Pune at Khed. The Pune International Airport Project would be managed by the Airports Authority of India," the statement stated. If everything goes as planned, the airport will be ready in five years.
Senior officials who attended the meeting said the airport with two runways would need 1,268 hectares. "The project would be at the Khed SEZ and surrounding areas. While 850 hectares has already been acquired for the SEZ project, the remaining 418 hectares will have to be acquired and nearly 180 families would be affected. The rehabilitation package will be finalised by the district administration. The AAI has approved the site and stated that it is the most ''conducive site" as it was obstruction free.
"It is barren land and there are also no natural obstructions," said the official on the site proposal. The AAI in their masterplan has stated that the required plot of land would measure 6.34 km by 2 km. The Maharashtra Airport Development Company would have to take the necessary permissions, including those from the environment department.
The JV had earlier paid out Rs 289 crore to land holders for phase I at the rate of Rs 17 lakh a hectare. When chairman and managing director of Bharat Forge, who is in the US was contacted, he had stated that he would comments after his return to India. Senior officials said the land acquisition will have to be coordinated by the state government.
According to the officials, the site was recommended as the availability of acquired land is to the tune of 65 per cent, the location is free from obstruction and meets optimum airport requirements with two independent parallel runway operations. "The site does not appear to have any obstacles in its approach and take off path,'' said a government ficial.
Pune Divisional Commissioner Prabhakar Deshmukh and MADC MD T Satre had reviewed the site. The site has been finalised after reviewing six sites. A detailed presentation of the site selecton was made on November 11 to the chief minister and deputy chief minister and they had given an in-principal approval for the proposed site.
The meeting in New Delhi convened under the PM had the Chief Minister and deputy chief minister and state government officials besides Sharad Pawar.
Source : indianexpress.com
Madras HC accepts a novel sale and lease back transaction; allows lessor to claim depreciation on le
IT: Where there was a tacit agreement in form of offer and acceptance for sale of assets and existence of such assets could not be doubted, said sale and its lease back should not be rejected for purpose of allowing depreciation
Still Room For Improvement On Indian Port Policy
Despite positive moves to reduce the red tape tying up port development, India still needs to do more before it can take its place on the world logistics stage, according to an analyst.
Shailesh Garg, director at industry consultant Drewry, said that the shipping and ports sector in India needs to “develop rapidly to keep pace with Indian trade and to act as a catalyst in economic growth”.
While India has already attracted international container terminal operating groups, there remains an estimated $20bn of further investment needed in the port system.
India’s Ministry of Shipping recent changes to the container terminal concessions rules made them more inviting to private investors. But despite these ‘policy interventions’, the progress of PPP related projects in the sector has still been slower than expected.
“The government therefore needs to introduce substantial policy initiatives for developing the port sector to meet the proposed capacity addition targets,” said Mr Garg. “Apart from the regulatory environment, the government will also need to focus on integrated development, as inadequate road and rail facilities are leading to logistical bottlenecks, resulting in capacity constraints and under-utilisation of port capacity.
“Further, investment in the modernisation of existing ports is critical for removing physical constraints and equipping them to handle modern and bigger vessels.”
Mr Garg will speak on ports, shipping and logistics development across India, Pakistan and Sri Lanka at the upcoming TOC Container Supply Chain Middle East conference, taking place on December 9-11 at the Dubai World Trade Centre, UAE.
Source:- portstrategy.com
Rupee Around 63/Dollar After Rbi Chief Rajan's Comments
The rupee gained past 63/dollar on Thursday after comments from the Reserve Bank of India chief about dollar demand from oil companies being smoothly absorbed by the forex market and easing fears of near-term tapering by the U.S. Federal Reserve helped the currency.
The rupee rose to 62.9525 to a dollar versus its Wednesday close of 63.30/31. It was last trading at 63.01/02.
Fed Chairman-elect Janet Yellen, in remarks prepared for her nomination hearing before the Senate Banking Committee later on Thursday, said the U.S. jobless rate was still too high and both the labour market and economy were performing "far short" of potential.
Source:- in.reuters.com
India To Import 2.5Mt Urea In Jan, Feb 2014
India is expected to purchase 1.5–2.5 million tonne urea in January and February 2014 to meet the outstanding demand. Purchases during the October-November period have been robust, with price increases seen for some products, according to a monthly report by ICIS, provider of petrochemical, energy and fertiliser market information.
The demand for fertilisers mainly urea, ammonia, sulphur and potash is expected to improve in the coming months, it said.
Urea prices in India increased in October, with the lowest offer from State Trading Corporation of India (STC) at $309.9 per tonne CFR (cost and freight), up $15 per tonne from the September tender from state-owned trading firm MMTC, it said.
About 240,000 tonne ammonia was loaded to India from Saudi Arabia and Iran in Ocotber. Contract prices for buyers on both coasts have increased slightly to $472-479 per tonne CFR and the netbacks to the Arabian Gulf are around $435tonne FOB (free on board).
The phosphates market in India has been bearish this month and buyers are not expected to return to the market before the new year due to ample inventories and weak prices, the report said adding that the price of phosphoric acid is down by about $ 100 a tonne to $609 a tonne (CFR), the report said adding that the demand for sulphur is likely to pick up in late November when the sugar season starts.
“Sellers agreed to give discounts as importers were deferring outstanding shipments due to the depreciation in the rupee against the US dollar and following a decline in global prices,” said Deepika Thapliyal, analyst at ICIS, on the demand-supply side dynamics.
Source:- mydigitalfc.com
All India Roll Out Of Risk Management System (Rms) For Export
Finance Minister Shri P. Chidambaram today inaugurated the All India rollout of an IT based Risk Management System (RMS) for the Customs clearance of export goods in the presence of representatives from the trade and industry at New Delhi.
Speaking on the occasion Finance Minister said that RMS is a trust based IT system that expects the trade to make correct declarations to Customs. It is a trade facilitation measure which, on implementation, would reduce dwell time from few days to few hours. In view of its obvious advantages, RMS is also being endorsed globally at all forums including WTO.
Finance Minister also emphasized that success of any trade facilitation measure depends on compliance of legal requirements by trade. He urged the trade to comply with the legal provisions so that Customs can ensure speedy clearance of the import and export goods.
The launch of RMS in exports today covers 11 Customs stations at Bangalore, Chennai, Delhi, Hyderabad, Mumbai, Pune and Tutocorin. It would be extended to all EDI Customs stations by year end. Benefits are expected to accrue to the trade in terms of faster clearances and reduced transaction costs thereby enhancing the global competitiveness of our export goods.
Source:- nvonews.com
New System May Cut Export Customs Clearance To Few Hours: Chidambaram
Finance Minister P Chidambaram today expressed hope that the time taken for customs clearance of export cargo will come down to a few hours after implementing a risk management system.
"I sincerely hope that with the introduction of RMS in exports, the dwell time which now ranges from 1.6 days to 3.68 days will be brought down to a few hours," Chidambaram said after launching the all-India Risk Management System (RMS) for exports.
India started using the RMS for imports in December 2005 and it has helped to bring in additional revenue of Rs 2,211 crore, Chidambaram added. It has also reduced the dwell time, or the duration for which cargo remains in transit storage while awaiting clearance, for incoming shipments.
"The revenue department claims that the dwell time for imports has come down drastically after launch of RMS in imports. Likewise, RMS in exports is intended to bring down the dwell time so that the cargo meant for exports moves up quickly, leaves the shores of India towards its ultimate destination," Chidambaram said.
The time currently taken for customs clearance of export cargo in Mumbai is 1.6 days, while at the Inland Container Depot in Delhi it is 3.68 days.
Chidambaram said the RMS is based on trust and is part of international co-operation efforts on trade-related issues. The facility will enable low-risk consignments to be cleared based on self-assessment declarations by exporters.
By expediting the clearance of compliant export cargo, the system will contribute to lower dwell time, besides reducing transaction costs and making businesses internationally competitive.
Source:- indianexpress.com
Moily’S Plan To Increase Crude Oil Imports From Iran Hits A Roadblock
Petroleum and Natural Gas Minister, Veerappa Moily’s grand plan to save outflow of $8.47 billion on account of increased imports of crude oil from Iran under the rupee payment mechanism has hit a roadblock due to inability of his Ministry to make the Rs. 2,000 crore Energy Insurance Pool fund operational.
Mr. Moily had submitted a master plan to Prime Minister, Manmohan Singh in September outlining urgent need to increase imports from Iran to around 13.2 million tonnes per annum this fiscal to save around $8.47 billion in foreign exchange. It was stated that under the rupee payment mechanism in force with Iran, New Delhi would end up saving critical foreign exchange if it increased its imports of oil from Iran which stand around 2 MT at this time around.
However, refiners have refused to import crude oil from Iran in the absence of any firm insurance cover due imposition of US-led sanctions against Tehran. The Petroleum and Finance Ministries had agreed to create a Rs. 2,000 crore Energy Insurance Pool fund headed by state-run GIC Insurance to provide cover for imports of crude from Iran. Oil Industry Development Board (OIDB) will provide Rs 1,000 crore for the insurance pool while an equal amount will come from the state insurers.
The Finance Ministry had last month also written to the Petroleum Ministry to work on fast track to make the fund operational but things have remained in limbo.
In the meantime, this is created problems for those who want to import crude oil from Iran including state-owned refiners. State-owned Hindustan Petroleum Corporation Limited (HPCL) said it had plans to import about 0.8 million tonne of crude oil from Iran if a fund to provide insurance cover for refineries processing oil from the sanction-hit nation is put in place. "We have not imported any oil from Iran this fiscal but we have contracts to buy oil from Iran. We expect the insurance fund to be operational by next month and if that happens, we will be able to import six ship laods of oil in four months,’’ HPCL Director (Refineries) B. K. Namdeo said in New Delhi.
Similarly, Mangalore Refinery and Petrochemicals Ltd (MRPL) and Essar Oil Ltd (OIL) plan to import 4 MT each from Iran, as against about 5 million tonne each they imported in 2012-13. State-owned Indian Oil Corporation (IOC), which imported 1.566 MT oil from Iran in 2012-13, has entered into a term contract for importing 1.2 million tonne crude oil from Iran this fiscal.
In fact, sources in the Petroleum Ministry said Iran has offered discounts on crude oil price and free shipping if India agrees to buy more of its oil. Last year, it bought 13.1 million tonne oil from Iran. Tehran has offered to give nominal discounts in price as well as free delivery of oil at Indian ports in its ships. It has not stated the kind of discount it will offer but has indicated it is willing to sell crude oil to Indian refiners at prices lower than internationally traded rates.
On other hand, talks between New Delhi and Tehran to resolve the issue of rupee payment mechanism has not made much headway. India had been in the last few months paying 100 per cent rupee payment to Iran for the crude oil purchases. However, recently Tehran reverted to the old system of taking only 45 percent of the payments due in rupees and for the rest is seeking payments in Rouble, Yen or Yuan.
Since July 2011, India had paid in Euros to clear 55 percent of its purchases of Iranian oil through Ankara-based Halkbank. The remaining 45 percent due amount was remitted in rupees in accounts Iranian oil company opened in Kolkata-based Uco Bank.
India is keen that the system of full payments in rupee is resumed as it will help save on forex outflow.
Source:- thehindu.com
World Diverts Garment Import Orders To India
Indian garment exporters have been bagging more orders from the traditional export markets since April. Among the many reasons are a depreciating rupee, recovery in the US, rising cost of Chinese manufacturing and a hardening yuan and, last but not the least, Bangladesh.
The garment industry in Bangladesh has been facing labour compliance problems after the collapse in May this year of Rana Plaza that housed hundreds of garment units has raised human rights issues and social unrest.
As a fallout, several importers in the US and Europe are reportedly ditching Bangladesh and looking at alternate supplies, including from India.
Aggravating the situation in Bangladesh, 250 garment factories near capital Dhaka were forced to shut down on Wednesday, following labour unrest over demands for higher wages.
The earlier developments seem to have already had some positive effect on Indian exports. The latest labour disturbance can further expand India’s opportunities.
“Last year our garment exports declined to below $13 billion from $13.5 billion in the previous year,” said DK Nair, secretary general, Confederation of Indian Textile Industry (CITI). “However, since April exports have been growing by 15 to 17 per cent and we will probably clock an export revenue of $17 billion this year. It seems business orders are getting diverted to Indian manufacturers, as many have reported a spurt in orders,” he said.
According to Amit Ladsaria, director of Turtle, Indian garment firms which contract-manufacture on behalf of US, European brands or retail chains are certainly getting more orders. According to data from the Apparel Export Promotion Council (AEPC), Indian garment exports to the European Union increased by 5.9 per cent year on year in January-May, while those of China and Bangladesh declined by 9.7 per cent and 1.8 per cent, respectively.
In September apparel exports rose by 14.95 per cent to $1.11 billion. In the first half of the financial year, India exported apparel worth $7.9 billion, a rise of 13 per cent over the year, according to AEPC data.
In terms of apparel export growth during April-August, the highest growth was registered by the Southeast Asian region followed by West Asia, North America, EU, Latin America and Southern Africa. South Asia registered a decline.
Bangladesh is not just India’s competitor in garment exports, but it also imports Indian yarn. Fortunately, the yarn industry has not seen any drop in demand from Bangladesh. On the other hand, the Bangladesh events have upped the Chinese demand for Indian yarn.
“China imports yarn from both Bangladesh and India. Around 40 to 50 million kg of Indian yarn goes to China. After the events in Bagladesh, China is looking at India as an alternative source. A Chinese delegation headed by its textile minister is now in India. Indian yarn producers are also increasingly receiving enquiries from Chinese companies,” said K Selvaraj, secretary general of the South Indian Mills Association.
“Indian garments are up to 18 per cent costlier. While Bangladesh has the benefit of zero duty for imports into European Union, Indian garments attract 9.6 per cent duty,” said V D Zope, secretary general of the Textile Association of India. “Indian garment manufacturers are largely small and medium in size, compared with the large units in Bangladesh. We lack the capability to handle bulk orders and our response time is also longer,’ he added.
“In the past three or four years, very few factories have been set up in the country. Labour availability has also become worse due to rural job schemes. People in rural areas are finding it easier to stay in their hometown,” said Rahul Mehta, president of the Clothing Manufacturer Association of India.
“Labour shortage is the biggest problem preventing India from taking advantage of the situation. While our labour is already expensive, the shortage only aggravates the problem,” explains a Tiruppur-based exporter, who declined to go on record. “The power shortage, though eased to an extent now, also aggravates the problem. Hardly 30 per cent of the units in Tiruppur are operating today; several others stopped operations.”
The gains from the rupee depreciation have been offset by higher diesel prices and inflation. “Even the benefits of a depreciated rupee come about six months after orders are booked. We neither have the bulk capacities to cater to big global customers nor the skilled labour to get into value- added products,” he added.
Joseph Thomas of Joes Merchandising Services feels the best way forward is “to opt for the Turkish model – small volumes but really high-end value products.”
“But, the problem is, we are still dishing out cotton-based garments, whereas the bigger pie is in other fabrics like recycled polyesters, organic cotton, silk and other fashion driven blends,” he added.
Source:- mydigitalfc.com
Perfect competition in real estate market; dominance by one party not possible, CCI says
Competition Act : Issue of abuse of dominance by opposite party, a real estate developer, cannot be gone into when various reputed developers were offering residential flats in relevant market
HC upheld sec. 69C additions as assessee failed to explain purposes and nature of unaccounted exp.
IT: Where appellant failed to explain purpose and nature of expenditure disclosed in search and same was also not recorded in books of account, addition was to be made under section 69C
SC : AO can issue sec. 133 notice to financial institutions seeking info. of depositors on deposit a
SC : Assessing Officer can issue 'general' notice under section 133(6) to Financial Institutions to furnish information regarding account holder with cash transactions or deposits of more than Rs. 1,00,000
Admitting an undisclosed income and an intention to pay taxes saves assessee from concealment penalt
IT: Where assessee admitted undisclosed income found during search and he was ready to make payment of tax, no penalty was to be levied
Case remanded as no verification made by revenue to check eligibility of assessee for sec. 80P relie
IT: Where bye-laws of assessee was silent about whether voting rights were restricted by bye-laws and rules of society to three classes of members specified in proviso to section 80P(2) and Assessing Officer as well as Commissioner (Appeals) had not carried out required verification, claim of deduction under section 80P(2)(a)(vi) to be remanded back to Assessing Officer for fresh consideration
RBI asks NBFCs to file and register records of equitable mortgages with Central Registry
NBFCs/SARFAESI : Filing of Records of Equitable Mortgages with The Central Registry
Revenue’s declaration to pull out its reasons for reassessment makes reassessment notice invalid
IT : Where department itself admitted that Assessing Officer would withdraw impugned reasons for reassessment and record fresh reasons incorporating correct factual position and then proceed in matter in accordance with law, notice under section 148 did not survive
New grounds can be admitted by Tribunal only is founded on facts already placed before lower authori
IT: Tribunal cannot allow a party to change its stance by reference to new facts that were not pleaded or asserted before Assessing Officer or Commissioner (Appeals)
Show-cause notice is mandatory prior to initiation of recovery proceedings under Central Excise
ST : Before initiating recovery proceedings under rule 8(3A) of Central Excise Rules, 2002, department must issue show-cause notice setting out periods of default, amount payable, interest payable and afford an opportunity to assessee
Sacred route goes from bank corridors - No unexplained cash credit if loan was repaid via cheques
IT: Where there was sufficient funds in lender's account and loan was taken and repaid through cheques, there was no unexplained cash credit
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