IT/ILT : Incorrect allocation of cost could not be a reason for rejecting cost plus method
Sunday, 17 November 2013
ITAT may grant a consequential relief to a party even if it didn’t prefer an appeal on impugned issu
IT: When an appeal is preferred before Tribunal by any of parties, whole appeal is before Tribunal and it has to decide case irrespective of fact as to whether it would amount to granting relief to other party who did not prefer appeal
Back to basics - ITAT reiterates ‘share premium’ is capital receipt and can’t be taxed as residual i
IT : Where assessee-company was incorporated on 3-4-2008 and during previous year ending on 31-3-2009 it had collected share premium on allotment of shares of face value of Rs. 10 each at a premium of Rs. 490 per share, premium in question could not be taxed under section 56(1) as assessee's income from other sources
Sez Board To Give Licences For Defence Goods Production
Special Economic Zone (SEZ) units producing defence related items will no longer have to go to the Department of Industrial Policy & Promotion (DIPP) for an industrial licence.
The Board of Approval (BoA) for SEZs, which approves proposals for setting up these zones and takes decisions on matters related to their operation, will now also issue industrial licences for producing defence related goods.
“The move is aimed at speedier approval of such projects and is also another step towards single-window clearance promised to SEZs,” a Government official told Business Line.
The BoA is headed by the Commerce Secretary and includes senior officials from key ministries including Finance, Revenue, Home, Urban Development and Micro, Small & Medium Enterprises.
This move could be seen as another effort by the Government to make life easier for investors in SEZs in the absence of any assurance from the Finance Ministry that the minimum alternate tax (MAT) and the dividend distribution tax (DDT) imposed on the supposed “tax-free enclaves” three years ago would be withdrawn.
The Commerce Ministry recently slashed the minimum area requirement for setting up SEZs in an attempt to revive interest in the zones. Investments in SEZs have reduced to a trickle over the last two years due to imposition of taxes and the overall dull investment climate in the country.
Interestingly, the SEZ Act of 2005 gives the BoA the authority to issue industrial licences, but it had not been exercising it for the last seven years since the rules were approved. It was only in last meeting of the Board earlier this month that it took up for the first time the responsibility of issuing industrial licences to three pending proposals for producing defence items.
“Although the SEZ Act allowed it, the old system of issuing industrial licence by the DIPP was being followed as defence is a sensitive area. However, the BoA will be equally careful and follow all rules before issuing a licence,” the official added.
When a SEZ unit has to go to other departments for clearance, the entire coordination takes a long time, points out Hitender Mehta, Co-Chairman Assocham’s Group on SEZs. “Even after a licence is issued and the file lands up with the BoA, it could be a while before it is taken up because there is often a considerable time gap between two meetings,” Mehta said.
3 proposals
The three proposals that have been taken up by the BoA for issuing licences include Pipavav Defence and Offshore Engg Co’s application for manufacture and development of C4I systems, electro-optical systems, underwater systems and avionics, Syrma Technology’s application for producing defence products such as radio and satellite communication equipment and Data Patterns’s application for design, development and manufacture of radar, sonar and electronic warfare systems.
Source:- thehindubusinessline.com
Coir Exports Likely To Grow By 20% To 1200 Cr
17-Nov-2013
The country’s coir exports are likely to grow by 20 per cent to Rs 1,200 crore in the current fiscal on account of growing demand from western markets like the US and Europe.
Last fiscal, these exports stood at Rs 1,000 crore.
“Coir exports are growing at a healthy rate and may touch Rs 1,200 crore mark in 2013-14 due to rising demand in western markets like the US ad Europe,” Micro, Small and Medium Enterprises (MSME) Secretary Madhav Lal said.
He was speaking to reporters after inaugurating the Coir Board pavilion at India International Trade Fair (IITF) at Pragati Maidan here.
The US and Europe account for about 72 per cent of the country’s total coir exports.
Besides, exporters are getting a good response from emerging markets like Africa and the UAE, he added.
The Coir Board, which is a statutory body and was set up in Coir Board works towards the promotion and development of coir sector in India as a whole, is celebrating its 60 years.
During April-October 2013, these exports stood at over Rs 700 crore.
Products made out of coir include mats, carpets, matting tiles, yarn, bags, decorative items, jackets, umbrellas, coir jewellery.
Meanwhile, the Secretary inaugurated the MSME Expo organised by the Office of Development Commissioner MSME.
More than 66 exhibitors are showcasing a wide variety of products, including decorative, home furnishings, textiles, among others.
Source:- thehindubusinessline.com
Wheat Imports Soar On Low Global Prices
17-Nov-2013
Wheat imports doubled in the first four months of the current fiscal year from a year ago on the back of lower prices in the international market.
Between July and October, some 10.17 lakh tonnes of wheat arrived, in contrast to 4.99 lakh tonnes during the same period of fiscal 2012-13, according to data from the food ministry. Over the last one year, prices of wheat have been on the downturn globally due to increased production.
The ‘Soft Red Winter’ variety slumped to $257.7 per tonne in the third quarter of the year from $297 in the first quarter, while the ‘Hard Red Winter’ dropped to $305 a tonne from $321, according to World Bank Commo-dities Price Data.
The sliding prices encouraged all to import in higher quantities, said Mohammed Saiful Alam, chairman of the Chittagong-based S Alam Group, which imported 2 lakh tonnes of wheat since July.
Asif Iqbal, executive director of Meghna Group of Industries, said higher imports had caused a supply overflow in the market, forcing importers to sell at lower prices to pay off bank loans and other liabilities.
The retail prices, however, did not fall in line with the prices at which the importers had sold to the traders, who are releasing the grain slowly to the market to keep the prices high, Alam said.
Asked, Wazed Ali, owner of Lakhya Flour Industry at Narayanganj, said: “Don’t traders stock in godowns if the market demand is lower than the supply?”
The wholesale price of flour currently stands at Tk 27 per kg, in contrast to Tk 35-40 in January.
Ali said wheat imports would not rise further as importers who have incurred losses earlier have stopped importing.
Badrul Hasan, director of procurement of Directorate General of Food, expects this fiscal year’s wheat imports to be around 30 lakh tonnes, up from 18.61 lakh tonnes in fiscal 2012-13.
Of the total wheat imports, the private sector accounts for 67.5 percent and the government the rest.
Source:- thedailystar.net
Sugar Export Norm Relaxed Amid Domestic Surplus
With surplus domestic sugar production, the government has relaxed a condition for exports of the sweetener by doubling the limit on overseas shipments that sellers can register.
“One of the conditions was the upper limit of 25,000 tonnes per application for registration. This limit is now enhanced to 50,000 tonnes. Accordingly, an exporter can seek registration of up to 50,000 tonnes of sugar,” the Directorate General of Foreign Trade said in a circular.
Welcoming the decision, the Indian Sugar Mills Association (ISMA) said this would help in exports of raw sugar, which is generally shipped in bulk.
ISMA Director General, Abinash Verma, however, demanded that the system of making export registration should be abolished to help boost shipments.
The association has been demanding easier norms to export sugar due to surplus domestic production. It has targeted exports of 3-4 million tonnes of sugar in the 2013-14 marketing year (October-September) as against about 3,25,000 tonnes in the previous year.
Sugar production in India, the world’s second largest producer and biggest consumer, is projected at 25 million tonnes in 2013-14 against the annual domestic demand of 23 million tonnes.
Source:- thehindubusinessline.com
Tea Export Static Since Independence
Though tea production in India has increased manifold since Independence, its export has remained static since that time and the increased production is used to cater to the ever growing domestic consumption. However, the Tea Board has identified the potential international market and efforts are on to increase export.
Talking to The Assam Tribune, Chairman of the Tea Board MGVK Bhanu said that in 1947, the country produced 252 million kilograms of tea and 201 million kilograms were exported, while only 51 million kilograms were consumed inside India. In 1970, tea production increased to 419 million kilograms and the export was 202 million kilograms. In 2012, the country’s tea production increased to 1126 million kilograms and the export was only 205 million kilograms and the rest was consumed domestically.
Bhanu said that there has been a significant increase in production, productivity and domestic consumption of tea since Independence. There has been a phenomenal increase – 1747 per cent – in domestic consumption since Independence, and almost the entire increased production is used in catering to the burgeoning domestic consumption, while the export market remained more or less static.
Giving an account of the steps taken by the Tea Board to increase export, Bhanu said concerted efforts are being made covering five focus countries – Russia, Kazakhstan, Iran, Egypt and the United States of America. He revealed that all these markets have been nurtured except Egypt, which witnessed political and domestic disturbances.
The Tea Board Chairman said that a strong delegation of the Board was sent to Iran, which resulted in exports to that country. He said that Iran, with its preference for orthodox tea, particularly Assam tea, presents a great opportunity to increase export, both in terms of volume and value. India also put up a strong presence at the recently held North American Tea Conference. The speciality and quality segment has been growing in the USA and there is opportunity for growth in the segment in the days to come, he added.
According to records available with the Tea Board, the CIS countries import the highest quantity of tea from India, while, the exports to Iran, Egypt and the UAE also recorded marginal increase in the last couple of years. In 2011-12, India exported 58.59 million kilograms of tea to the CIS countries and the volume increased to 61.25 million kilograms in 2012-13. Similarly, the export to the UAE increased from 18.05 million kilograms to 21.51 million kilograms, export to Iran increased from 11.05 million kilograms to 18.73 million kilograms and to Egypt from 6.57 million kilograms to 9.66 million kilograms and to Germany from 7.18 million kilograms to 7.97 million kilograms.
Bhanu said that India also imports small quantities of tea not only from Kenya and Sri Lanka but also from other countries, mainly for re-export and blending and value addition.
Meanwhile, the area under tea cultivation in India increased from 337300 hectares at the time of Independence to 580000 hectares last year.
Source:- assamtribune.com
Ex-director having not participated in winding up proceedings can’t request to implead it in revival
CL : Ex-director who had not participated in winding up proceedings of company had no locus standi to file application for his impleadment in revival proceedings seeking validation of purchase of shares of company-in-liquidation
Oil Import Needs Return To Haunt Weak Rupee
Barely a month after the rupee hit a two-month high and showed signs of stabilising after its brutal fall this year, the currency is at risk from a re-emergence of heavy demand for dollars from oil importing firms.
As the rupee hit a nine-week low against the dollar on Wednesday, extending its drop over four trading sessions to 2 percent, the overriding fear in Indian markets was the return of dollar buying by oil companies, coupled with concerns the Reserve Bank of India (RBI) will soon wind down a special dollar facility for these firms.
The US dollar's rally this week on fresh expectations of the Federal Reserve scaling back its stimulus have also been factors pressuring the rupee, as well as Indonesia's rupiah and other emerging markets exposed to foreign capital flows.
But the re-emergence of dollar buying by oil importers has unnerved analysts, reminding them of the fragility of the rupee and its vulnerability to a wide current account deficit.
The three state-run oil marketing firms require an estimated $350 million a day, accounting for the bulk of dollar demand in India's markets.
The RBI had provided these companies with a special dollar swap window to borrow dollars as part of a package of measures to defend the rupee as it plunged to a record low in late August.
The swap window is expected to close at the end of November as the central bank gradually reverses its drastic rupee-defence policies. Traders fear that some of the early 3-month swaps these companies had entered into with the central bank would fall due in December, requiring them to buy dollars from the market.
"Oil companies are buying forward dollars particularly in near-month tenors to repay the central bank for the dollar swap window," said a dealer with a state-run bank who declined to be named as he was not authorised to speak to the media.
"We are seeing some demand in the 3-month tenor but I wouldn't say it is too big," said a forex dealer with another state-run bank.
The rupee weakened to 63.90 per dollar on Wednesday, before recovering some ground on suspected central bank intervention. It is still some distance away from the August record low of 68.85. But, having lost 13.4 per cent of its value against the dollar since the start of this year, the rupee's slide this week has analysts worried.
The currency hit a two-month high in October, stabilising after a series of measures by the RBI and government to attract foreign currency inflows, deter speculators and discourage the import of gold.
Deutsche Bank said in a report this week November would bring more nervousness to the rupee market. Among factors that would contribute to the jitters would be worry that the slight improvement seen in India's yawning current account deficit cannot be sustained.
The unwillingness of foreign investors to keep funding vulnerable countries and the unwind of the RBI's swap facilities would also undermine the rupee, they wrote, noting expected levels of rupee volatility, or vols, had already risen.
"We close out our tactical long in rupee and turn neutral. The RBI-facilitated, low-volatility spot regime is coming to an end with the reintroduction of oil demand to the market," Deutsche said.
Oil demand
Although the swap window for oil importers has not officially been closed, the country's economic affairs secretary Arvind Mayaram last week confirmed what rupee traders had heard, that state-run oil companies were back to buying about 30 per cent to 40 per cent of their dollar needs from the market.
Newly appointed RBI Governor Raghuram Rajan has been rolling back some of the exceptional rupee defence measures the central bank took in mid-July, including hefty increase in its emergency funding rate. Analysts expect the oil swap window would also soon be wound down.
The expectation that they would need far more dollar funding to repay the RBI when the swaps expire has pushed the rupee down in forward markets. Traders at state-run banks said the sharp rise in dollar-rupee future premium was partly due to these oil companies hedging their swap repayment obligations.
The forward market was pricing the rupee at 64.26 per dollar by the end of December, nearly one percent weaker than levels on Wednesday.
But the pressure on the rupee would ultimately be a function of how much oil the country needs in the months ahead and how much of the dollar needs have been hedged pre-emptively.
HPCL, one of the state-run oil marketing companies which had borrowed dollars via the RBI's swap window said it has hedged its dollar obligations.
"Our current requirement is minimal because our repayment obligations have been secured some time ago because of hedging for these months," said HPCL Head of Finance K V Rao.
"Our inventory position is also very good, so we may not go for large amount of imported crude which requires immediate payment."
Source:- deccanherald.com
Tomato Rate High Due To Dependence On Import
The tomatoes price continued to remain high at the level of Rs120-150 per kg in retail market and if dependence on import is ended through permanent halt on vegetables import from India, the growers will be encouraged to cultivate maximum crop.
So, the government should immediately impose a ban on import of tomato to encourage local productions as the present hefty increase in the prices of the commodity was only because of our dependence on neighboring country.
While showing a grave concern over steep rise in tomato prices in just a few days, the former SVP of LCCI Abdul Basit said that it was very unfortunate that while allowing import of tomato or other crops, the authorities did not bother to calculate its fallout on local farming community. And now when the local farmers have stopped sowing tomato crop due to heavy import, it is quite natural that the consumer is bound to buy at the prices being quoted by the Indian grower.
Abdul Basit said that the Supreme Court of Pakistan should also initiate suo moto proceedings to the matter that has deprived a common man from commodity like tomato that can be even grown even in vase or at rooftop.
He said that industrial bodies had been calling for long-time now that the government should ban all the commodities that can be produced locally but the authorities inaction has pushed us to a situation that would take at least a year to return to normal provided a ban is clamped right now.
Source:- nation.com.pk
Indian Rupee Opens Higher At 62.85/Dollar, Up 26 Paise
Indian rupee breached the 63-mark in early trade on Monday to open at 62.85 per dollar, up 26 paise from Thursday's closing of 63.11 per dollar.
Agam Gupta of Standard Chartered feels dollar-rupee should open lower at 62.90-62.95/USD.
"There has been some dollar weakness since India market close on Thursday. This will cause the sentiment to be slightly rupee positive," he adds. According to him, the range for the day is seen between 62.75-63.25/USD.
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