IT: Since Chhattisgarh Nagar Tatha Gram Nivesh Adhiniyam, 1973 did not contain power to compulsory acquire land, purchase of land under said Act by assessee-local authority by entering into mutual settlement with landowners could not be equated to compulsory acquisition of land
Thursday 14 November 2013
Sec. 68 addition was justified as assessee failed to prove genuineness of share transaction, says HC
IT: Where neither huge cash in hand over Rs. 20 lakhs was substantiated by wealth-tax return of other documentary proof nor photocopies of shares purchased or share numbers were furnished, impugned transaction could not be held to be genuine and explained
No disallowance if TDS default was cured before filing of return; amendment to sec. 40(a)(ia) is ret
IT : Amendment to section 40(a)(ia) by Finance Act, 2010 is retrospective and therefore, when assessee has paid to Government account tax deducted at source before due date of filing of return of income under section 139(1), disallowance of expenditure by invoking provisions of section 40(a)(ia) is not called for
IT department can’t restrict assessee from selling a similar flat at a lower price to an unrelated p
IT : Where assessee was engaged in business of selling of flats after construction and it offered an explanation for charging lower price in respect of some of flats sold by it and Assessing Officer without controverting such explanation made addition to income of assessee by applying rate of another flat sold by it, Assessing Officer was not justified in his action
India-Uk Free Trade Agreement Should Progress: David Cameron.
British Prime Minister David Cameron today said the proposed Free Trade Agreement (FTA) between India and the UK needs to progress.
"India-UK FTA is getting around for a long time and we need to progress on that front," Cameron said in reply to a query on India-UK trade at an interactive session with IIM Calcutta students here.
He said that India and UK have been investing in each other's countries. "The JLR (Tata Motors' acquisition of the British iconic brand) is the biggest success story where an Indian investment has been so encouraging.
"More capital flows will lead to greater trade flows between the two countries," he noted.
"What is important is that trade barriers should be reduced and that will help," he said.
He said that economic openness by both the countries should help in generating wealth.
"It is not a zero-sum game. India's gain is not Britain's loss. There is a need to reduce tariffs."
He also said that besides material trade, there was a lot of wealth in human capital. "These included universities, healthcare, banking and insurance."
In this context, he said that there was a limit on the number of students going from India to study in British universities.
But there was no limit for Indian graduates to get jobs in Britain, he said.
"There has to be a link between political openness and economic openness. Even if a country does not have oil, gas and ineral wealth, it does not matter. It is important what institutions we create and what policies we put in place," he added.
Source : economictimes.indiatimes.com
Smugglers Pushing In Gold Through Nepal, Bangla Borders.
As the 10% import duty on gold spurs unprecedented smuggling and authorities crack the whip, smugglers are skipping the traditional airport route and are tapping into fake currency networks across the Indo-Bangladesh and Indo-Nepal border to push in the yellow metal.
Investigations and seizures by financial intelligence agencies in the recent past have revealed that smugglers are now flying consignments of gold to Bangladesh and Nepal and then using couriers to carry them across the border.
In the past few months, over 50 kg of gold worth more than Rs 15 crore has been smuggled across the Indo-Bangladesh border alone. Sources in Directorate of Revenue Intelligence (DRI) said Nepal too has come up on the radar with some recent seizures on the border. Sources said this was only a fraction of what was being smuggled through these borders.
Increase in import duty on gold to 10% has created a gap in prices with places such as Dubai and Thailand where duty is only 1%. This year (up to October), close to 800 kg of smuggled gold has been seized. This is more than double of last year's haul of 350 kg.
DRI sources said the increase in seizures was also due to customs authorities keeping a strict vigil on airports. "That is why human couriers on Indo-Bangladesh border are being used as it is very difficult for customs authorities to man these porous borders. These borders already have a well-oiled network of smugglers who are engaged in fake currency and cattle smuggling," a senior DRI officer said.
Elaborating on the modus operandi, sources said gold was bought in places like Dubai and Thailand and flown to Dhaka or Kathmandu where authorities are not as vigilant. The consignment is then brought to the border and stored in safe houses.
"From here, human couriers are hired and given one or two bars to take across the border. It is very difficult to detect such small amounts on a long border. These couriers make two to five trips a day and thus manage to carry considerable gold in a day. The gold is then collected and stored on the Indian side and transported to unscrupulous jewelers in cities," the officer said.
Smugglers are also bringing gold through Sri Lanka using small fishing boats which are difficult to track and intercept, sources said.
Source : timesofindia.indiatimes.com
Rebar Rises In Shanghai To Trim Weekly Loss As Iron Ore Rallies
Steel reinforcement-bar futures in Shanghai advanced, narrowing a weekly loss, as higher iron ore prices helped offset a weaker demand outlook in winter.
Rebar for May delivery, the most-active contract on the Shanghai Futures Exchange, gained as much as 0.4 percent to 3,636 yuan ($597) a metric ton, before trading at 3,632 yuan at 10:28 a.m. local time. The contract lost 0.8 percent this week.
Iron ore for immediate delivery at Tianjin port tracked by The Steel Index gained 0.4 percent yesterday to $136.60 a dry ton, bringing this week’s gain to 0.5 percent. Demand for rebar usually wanes in winter as construction slows during the colder months, according to Jiang Yuying, an analyst at Chengdu Brilliant Futures Co. in Shanghai.
“There are some bargain-hunting buying in rebar as higher production costs are supporting prices,” said Jiang. “The upside might be limited due to the lack of positive news from policy makers and weak seasonality.”
The Communist Party’s senior leaders concluded a policy meeting this week with a communique stating that markets will become “decisive” in allocating resources while the state remains “dominant” in the economy, without providing specifics.
Iron ore for May delivery on the Dalian Commodity Exchange, rose 0.2 percent to 939 yuan.
Source:- businessweek.com
Tata Steel Rallies Over 3% Post Q2 Results; Brokerages Raise Target Price
Tata Steel LtdBSE 4.58 % rallied as much as 3.1 per cent in morning trade on Thursday, after the country's largest steelmaker by market value, beat analyst estimates by a fair margin and in response most brokerages have raised their respective target prices.
Consolidated net profit for the July-September quarter stood at Rs 916.8 crore, against a loss of Rs 363.9 crore in the same quarter last year. Analysts were expecting a consolidated profit of Rs 400 crore, on sales of Rs 34,600 crore, according to a an ET Now poll. The company reported consolidated sales of Rs 36,644.8 crore.
At 09:30 a.m.; Tata Steel was trading 2.4 per cent higher at Rs 367.60. It has hit a low of Rs 359 and a high of Rs 370 in trade today.
Tata Steel, which is the country's largest steel maker, sold 6.48 million tonnes of saleable steel in the second quarter, from 6.07 million tonnes from last year, on a consolidated basis. It was majorly helped by Rs 180 crore from the company subsidiaries like Tata Sponge, Tata Steel Processing, Dhamra Port and Tata BlueScope.
Margins rose to 10% from 7% from last year, helped by price increases in India and South-East Asia, and sales growth overall. The company raised prices by 1,500-2,500 per tonne in September in India. It took a similar hike in October, which could aid margins in the December quarter as well, ET reported.
Brokerage firms like JPMorgan and Deutsche Bank maintained their 'overweight' and 'buy' ratings on the stocks and see it heading over Rs 500 in the next 12 months, which translates into an upside of over 46 per cent from Wednesday's closing price of Rs 358.85.
JPMorgan raised its target price from Rs 500 earlier to Rs 525 for the next 12-months. Deutsche Bank expects the stock to rally towards Rs 525, raising its target price from Rs 372 earlier.
This is the first quarterly results announcement under new managing director Narendran, who took the helm in September. The company expects second half to be better than the first half, driven by growth.
Source:- economictimes.indiatimes.com
Labour Dispute Hits Export Shipments Through Jn Port
Shipping goods in containers to overseas customers through Jawaharlal Nehru port, India’s busiest container gateway, located near Mumbai has been hit by a labour dispute at one of the three terminals at the port.
Gateway Terminals India Pvt. Ltd, the terminal run by a joint venture between Denmark’s APM Terminals Management BV and Container Corp. of India Ltd (Concor), has shut the gates through which export containers are brought to the terminal for the last 10 days.
This is due to a three-week-old go-slow by the trailer operators at Gateway Terminals. Trailer operators pick up boxes arriving on ships from the wharf and cart them to the container storing yard of the terminal and then move the containers from the yard to the wharf to be loaded onto ships.
Gateway Terminals has outsourced this activity to a third party contractor who is seeking more money to do the job.
“Gateway Terminals has closed its export gate,” said S.N. Maharana, chief manager operations of JN port. The closure was necessitated by inadequate space to store containers inside the terminal, which in turn has triggered a blockage on the road leading up to the port.
“Shippers sending their export containers through JN port are facing the worst crisis at a time when exports are showing definite signs of a surge in the wake of growing demand for Christmas cargoes from the US and Europe,” said R. Venkatesh, vice- president of the Western India Shippers Association or WISA, which represents about 130 exporters and freight forwarders.
India’s exports grew by 13.47% during October 2013 to $27.27 billion from $24.03 billion a year earlier, making it the fourth straight month when exports grew in double digits, according to India’s commerce ministry.
The closure of the terminal’s export gate has started to bite exporters and shipping lines, WISA’s Venkatesh said.
“The terminal is choked. It has resorted to operational restrictions leading to huge shutouts of export containers, missed ship connections and abnormal delays in shipments of export cargoes and clearance of imported containers. The shipping lines have advised the shippers that any additional cost charged by the terminal has to be passed on to cargo interests,” Venkatesh added.
JN port’s Maharana said that some of the export containers of Gateway Terminals are being sent through the other two facilities run separately by the government-owned port itself and Nhava Sheva International Container Terminal Pvt. Ltd or NSICT (run by Dubai’s DP World Pvt. Ltd).
However, this has only added to the problems.
“Container shipping lines have already adopted dual berthing concept by dealing berth slots with NSICT and JN port container terminal, either on additional payment basis or some other business commitments. These costs will be passed on to the exporters and importers,” said a senior executive with a container freight station that services the port.
“Due to Gateway Terminals remaining closed for export intake, container inventory levels at other two terminals has shot up to their threshold handling limits, causing serious berthing delay, poor ship rate and massive export traffic queue running almost 15-20 kms on the national highway approach roads connecting the port,” said a Mumbai-based executive of a container carrier based in East Asia.
Further, the roads leading to port gates are also fully jammed with huge container traffic. And because of this, transporting containers to port has become very difficult, he added.
Between April and October, JN port handled 2.37 million standard containers, less than the 2.49 million standard containers it handled during the same period a year ago.
Source:- livemint.com
India Simplifies Risk Management System To Speed-Up Export Clearances
The Indian government launched a Risk Management System (RMS) for exports, a move aimed to reduce customs clearance time and lower transaction costs.
India introduced RMS for imports in December 2005, and traders had long demanded an extension of RMS to cover exports to help reduce transaction costs which are estimated at around 7-10% of total exports compared to about 3-3.5% in China and some Southeast Asian countries.
According to the Indian Finance Minister, the time taken to obtain customs clearance will now come down to a few hours, compared to around 1.6 days to 3.68 days prior to the implementation of RMS. Under the new system, low-risk consignments will be cleared by the Customs based on declarations by exporters. RMS is a growing practice among WTO members, and will help improve India's exports, local sources say.
Meanwhile, trade analysts say India's overall exports are expected to grow by 7.2% in FY 2014-15 (April – March), compared to -1% seen in FY 2013-14. India is expected to remain the world’s largest rice exports for the third consecutive year in 2014 with about 10 million tons of rice exports next year.
Source:- oryza.com
Tpg Emerges Final Bidder For Karaikal Port
14-Nov-2013
TPG Capital India is set to buy a majority stake in Karaikal Port Pvt. Ltd. The US-based private equity (PE) firm has entered into a so-called exclusivity agreement with the port and will invest at least Rs.1,000 crore to acquire stake from existing investors and promoters, said two people close to the development.
Located in Puducherry, the 47-million metric tonnes per annum (mmtpa) deepwater Karaikal port has a total investment requirement of Rs.4,000 crore. The project is expected to be completed by 2018.
“TPG does not comment on market speculation,” a company spokesperson said. G.R.K. Reddy, promoter and director at Karaikal Port, did not reply to phone calls and text messages on Wednesday and Thursday.
A port executive said TPG Capital is keen to invest in the firm. “Indeed, TPG is interested in investing but it is too premature to talk about it at this point of time,” he said, requesting anonymity.
A final valuation is yet to be arrived at and decisions pertaining to dilution of promoter stake and exit of existing private equity investors are still being finalized, the port official said.
At present, PE investors hold about 49% stake in Karaikal Port, a unit of infrastructure development firm Marg Ltd. “The promoters will also dilute some of their stake to offer majority shareholding to TPG,” said one of the people mentioned above.
So far, the PE firms have invested about Rs.680 crore in the company. Among the firms, Standard Chartered Private Equity Advisory (India) Pvt. Ltd has invested Rs.130 crore and Jacob Ballas India has invested Rs.200 crore. The port has also attracted private equity investment from IDFC Ltd and Ascent Capital Advisors.
“Discussions are still being held around valuations and it’s certain that TPG will at least invest Rs.1,000 crore to begin with. Negotiations with existing investors are also on. Depending upon how much the investors are ready to sell, promoters will consider the extent of their stake dilution,” another of the people cited earlier said.
The transaction will mark TPG Capital’s entry in the Indian port sector. The PE firm is the global buyout group of TPG, a global investment firm with over $55 billion capital under management.
The plan to bring TPG as an investor falls in line with Karaikal Port’s strategy to develop port infrastructure and increase operational efficiency. It is looking to strengthen its four divisions—coal handling, agricultural commodities, liquid cargoes and container handling—through partnerships.
“The primary objective of creating these four verticals is not to attract equity at these project-level businesses, but to get long-term contracts that can get bigger volume in respective verticals,” G.R.K. Reddy had said in a phone interview in June. Reddy also said that the firm was not raising fresh funds at that moment but was open to further equity dilution if needed.
The port is in the second stage of development and the total cost for the phase-II development is pegged at around Rs.2,800 crore.
PE firms seem to have a positive view on the port sector in India despite the current economic slowdown.
“Private ports in India present an exciting opportunity for PE investors, who are willing to make longer term investments, as there exists high growth potential on the back of increased international trade,” said Darius Pandole, partner at private equity firm New Silk Route Advisors Pvt. Ltd. “Additionally, private ports can benefit from market-determined tariffs that could result in healthy margins for various lines of port-related businesses.”
Non-major private ports, falling under state-government administration, have the independence to fix their own tariff. Karaikal Port is a minor port and has flexibility in pricing.
A PE investor is a better choice compared with debt that needs to be serviced regularly, an executive of a leading consulting firm said, requesting anonymity. “In case of equity investment, the company can buy out shares from private equity firms whenever the turnaround happens,” he said.
Source:- livemint.com
India's Q3 Gold Demand Down By 32% To 148 Tonnes: World Gold Council
Indians have offloaded more household gold in the third quarter of 2013 to take advantage of the price rise of the yellow metal and to meet their family requirement. Data released by World Gold Council on Thursday shows that there has been a 44.5% increase in recycled gold to 61.3 tonne from 34 tonne in the corresponding period of the previous year.
Talking to ET, Somasundaram PR, managing director (India), WGC said: "In Q2 of 2013, only 9.5 tonne of recycled gold has entered the market. But in Q3 when the supply side was constrained due to government policies, 61.3 tonne of old gold were offloaded by Indians. They took advantage of the price rise in yellow metal that touched Rs 33,000 per 10 gm during the quarter".
The demand for gold in India for Q3 2013 was at 148.2 tonne down by 32% compared to Q3 demand for 2012 which stood at 219.1 tonne. Despite this drop in demand in Q3, WGC pegs the 2013 demand at 900 tonne. Total jewellery demand in India for Q3 2013 was down by 23% at 104.7 tonne compared to 136.1 tonne in Q2 of 2012. There has been a drastic drop in investment demand as people preferred other asset class for investment due to volatility in the yellow metal prices. The investment demand was down by 48% at 43.5 tonne.
WGC says that in the first nine months of 2013 the total demand for jewellery is up by 13% and investment demand is up 30%. Total demand according to the council is up by 19%. Actually the surge in demand took place during April-June quarter when prices of the yellow metal fell to Rs 25,500 per 10 gm level.
Somasundaram added that the fourth quarter is traditionally a busy season for gold, as it captures post-monsoon rural spending, major festivals and auspicious wedding days and it is expected this to be true this year.
The global gold demand trend has followed the India pattern. Overall demand for gold in Q3 2013 was 869 tonne, down 21% on the same period a year ago. However, demand remained strong across most countries and sectors. The exceptions were gold-backed ETFs, which had net outflows of 119 tonne this quarter, compared to 402 tonne in Q2 2013.
WGC said that taking the year as a whole so far, the jewellery, bar and coin sectors are showing year-to-date increases, while technology demand remains robust. ETF investment demand is the notable exception, having weakened this year. As of the end of Q3 2013, demand stood at 2,896t, 26% higher than the same year-to-date figure in 2012.
The global demand for jewellery was 487 tonne in Q3 2013, compared with 462 tonne in the same period last year, an increase of 5%. Demand was particularly strong in China, where the figure reached 164 tonne, a rise of 29% compared with the same period last year. Robust growth in the jewellery sector was also seen in the Middle East, Turkey and significantly across South East Asia. After eight years of decline, the US jewellery market had its third consecutive quarter of growth with a shift to higher carat items - signalling the re-emergence of aspiration and luxury as key drivers of gold jewellery in US. The global bar and coin demand also showed a year-on-year increase, reaching 304 tonne, a rise of 6% compared to the same period last year.
Source:- economictimes.indiatimes.com
October Inflation Hits 8-Month High As Onion Prices Soar 278%
Spiralling prices of onion and other vegetables pushed the wholesale price inflation (WPI) to an eight-month high of 7 per cent in October. Food prices remained elevated, though the rate of increase dropped marginally to 18.19 per cent as compared with 18.4 per cent in September, data showed.
Retail prices of onions have quadrupled in some cities over the past three months, serving as a powerful reminder of the impact on consumers. Onion prices jumped by an annual 278.21 per cent in October as compared with a 78.38 per cent rise in vegetable prices.
Protein rich items like egg, meat and fish became costlier by 17.47 per cent against 13.37 per cent in September.
Rising food prices had also been reflected by data on Tuesday showing consumer price inflation accelerated more than expected in October, to 10.09 per cent from September's annual pace of 9.84 per cent.
Two days ago, Reserve Bank governor Raghuram Rajan described India's food inflation as "worryingly high". Still, Dr Rajan sought to address concerns about inflation at Wednesday's news briefing, and analysts have interpreted the remarks as signalling reluctance to raise India's key lending rate - the repo rate - which currently stands at 7.75 per cent. (Also read: Why the RBI may raise rates in December)
The Reserve Bank of India has already hiked the key repo rate by 25 basis points (0.25 per cent) twice since Dr Rajan took over as the governor in September.
Source:- profit.ndtv.com
Rupee Appreciates Further By 19 Paise To 63.11 Against Dollar
The rupee appreciated another 19 paise to 63.11 against the dollar today as local stocks made a strong recovery and exporters sold the US currency.
The rupee, which rose to a high of 62.95, gained for the second day after RBI Governor Raghuram Rajan sought to reassure investors, saying there is no fundamental reason for the currency to fall again. He also pegged the CAD at a lower level than estimated earlier.
Capital inflows continued to aid the rupee's rise, although a strong dollar overseas capped the gains.
The rupee resumed higher at 63.15 a dollar from the previous close of 63.30 at the interbank foreign exchange market and improved to a high of 62.95 as local stocks rose.
Further gains were stalled by concerns about a possible rate hike after data showed wholesale price inflation at 7 per cent in October compared with 6.46 per cent in September.
The rupee dropped to a low of 63.34 and closed at 63.11, a rise of 19 paise or 0.30 per cent. Yesterday, it had gained 41 paise. The local currency fell for the fifth straight week, losing 64 paise.
The 30-share benchmark Sensex snapped a seven-day losing streak and advanced 205.02 points or 1.02 per cent. Foreign institutional investors bought shares worth Rs 299.70 crore yesterday, according to provisional stock exchange data.
The dollar index was up 0.46 per cent against major global rivals.
"WPI data was released, which dented sentiment. Going ahead...Janet Yellen will be closely tracked as she is expected to comment on the ongoing tapering talks," said Abhishek Goenka, Founder & CEO, India Forex Advisors.
The RBI said it would inject Rs 8,000 crore by purchasing bonds on Monday to improve liquidity in the system.
Rajan said the estimate for the current account deficit this year is $ 56 billion, less than 3 per cent of GDP and $ 32 billion lower than last year.
He also said most of the dollar demand from OMCs is back in the market and the central bank will not rush to close a special window for their forex needs.
Source:- economictimes.indiatimes.com
Winding up petition dismissed as substantive issues raised disputes over liability of parties
CL: Presence of several substantive issues touching upon liability of parties leads to dismissal of winding up petition
Fee from usage of software which facilitates shipping business isn’t FTS; no tax under India-Denmark
IT/ILT : Where assessee, a Denmark based company, recovered certain cost from its Indian agent towards useage of software which was directly connected with its shipping operations, same had to be treated as covered under article 9(1) of India-Denmark DTAA and, thus, it could not be taxed in India
No denial of sec. 80G relief in absence of any evidence showing violation of statutory conditions, r
IT: Where any violation to section 80G could not be established, exemption under section 80G could not be denied
IT officers don’t have unfettered powers to prolong search without issuing panchnama
IT: Department does not have unfettered powers to prolong search without justification and issue panchanamas to extend period of passing of assessment order
No review petition if case was remanded by HC to get clarifications on certain matters
IT: No review petition if case was remanded by HC to get clarifications on certain matters
AO can’t initiate afresh block assessment proceedings without recording his satisfaction prior to se
IT: Where Assessing Officer had not granted opportunity to assessee and had not recorded satisfaction prior to initiation of assessment proceedings under section 158BD, he would not be permitted to initiate fresh block assessment proceedings
CIT couldn’t decline penalty waiver in relevant year when he allowed relief in earlier years on simi
IT: Commissioner could not decline waiver of penalty when on similar facts in earlier years it had granted said relief
Confiscation of exportable goods by custom authorities is a loss of stock-in-trade and a business lo
IT: Confiscation of goods exported by assessee must be treated as a loss of stock-in-trade
Recipient of GTA service may claim abatement even if non-availment of credit not endorsed on consign
ST : A recipient of goods transport agency's services may claim abatement of 75 per cent even if consignment notes issued by goods transport agency are not endorsed as to non-availment of credit by goods transport agency
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