IT: University, a body corporate and established for cause of education, is eligible for registration within meaning of section 12AA
Monday, 18 November 2013
MAT Cos. aren’t prone to concealment penalty if additions made to income computed as per normal prov
IT: Where deemed income assessed under section 115JB becomes basis of assessment as it was higher than income determined under normal provision, concealment made under normal provision having no effect, penalty under section 271(1)(c) could not be levied
AO can invoke Rule 8D only if he isn’t satisfied with assessee’s claim after examination of its book
IT: Assessing Officer has to examine accounts of assessee first and then if he is not satisfied with correctness of claim, only he can invoke rule 8D
IT: Assessing Officer has to examine accounts of assessee first and then if he is not satisfied with
IT: Assessing Officer has to examine accounts of assessee first and then if he is not satisfied with correctness of claim, only he can invoke rule 8D
Application or accumulation of income by a trust to be determined without allowing statutory deducti
IT: While computing income of a trust, deduction under section 24 from income from property held for charitable or religious purposes cannot be allowed
Adanis Challenge Moef Fine For Environmental Violations.
Adani Ports and SEZ has challenged the environment ministry's decision to impose penalties on it for environmental violations, setting the stage for a faceoff between the government and the company, possibly even a legal battle.
In a letter to the ministry dated October 14, a copy of which has been viewed by ET, APSEZ has challenged each of the seven penalties, saying the conditions have been either complied with or are not applicable to the company.
The ministry had derived these penalties from the report of a committee, headed by environmentalist Sunita Narain, set up to probe persistent complaints of environmental violations at the Adani port, power plant and SEZ complex at Mundra in Gujarat. The report, submitted in April, found that APSEZ had committed serious environmental violations.
The issue could impact the Adani Group's plans to build Australia's largest coal mine and port complex. Earlier this month, a Guardian report said the Australian government, in the aftermath of the Narain Committee report, has sought documents related to Adani's Indian violations.
Among other things, the Narain Committee said the company had hidden the true nature of its projects to obtain faster clearances. It had, for instance, delinked the port and SEZ components. It had avoided public hearings "on one pretext or another". It said the company might have even "started work prior to receiving environmental clearance".
In its final recommendations, the committee suggested, among other things, that the environment clearance (EC) for North Port — one of the port expansion projects — be scrapped. It also suggested the company set up an environmental restoration fund with a corpus of Rs 200 crore or 1% of the project cost, whichever is higher.
The ministry then invited responses from the company, after which it imposed a set of penalties, more or less based on the Narain Committee's recommendations. The Adani letter, written by APSEZ head-environment PN Roy Chowdhury, says: "There is no noncompliance or violation of the terms of the (EC)...by us". On the fund, it says: "We, therefore, respectfully request the ministry to reconsider the setup of the environment restoration fund for an amount of Rs 200 crore, which has been subjectively arrived at," adding that it was open to a development fund of "any substantially reduced amount".
In its response, the company asserts that all these representations had been made to the ministry. "No reasons have been disclosed for accepting the recommendations of the committee and also the grounds on which our response has not been accepted," the letter says.
Agrees Supreme Court lawyer Shyam Divan, who has written a book on environmental law and policy in India. "Given that they are subject to a higher appellate authority, all government decisions have to be reasoned. This helps the court or tribunal understand the process through which an order was arrived at," he said. Neither the company nor environment minister Jayanthi Natarajan responded to ET's questionnaires.
According to Ahmedabad-based lawyer Anand Yagnik, who has been arguing cases against APSEZ, the ministry could ask the company to present its case before the Expert Appraisal Committee (EAC), an advisory body of experts that advises the ministry on environmental clearances for projects. Based on what the EAC suggests, he adds, the ministry could take a final call.
One criticism of the Narain Committee report was that the penalties it recommended were small compared to the scale of environmental violations committed. The Environment Protection Act and the Environment Impact Assessment Notification empower the ministry to start criminal prosecution and to cancel environmental clearances if a company violates the conditions under which an EC has been granted.
Source : economictimes.indiatimes.com
To Stop Misuse Of Free Trade Agreements, Finance Ministry Plans Text Review.
The finance ministry is pushing for a review of the model text for free trade agreements (FTAs) after recent misuse of bilateral pacts exposed many loopholes in the pacts India has entered into with its trading partners.
The North Block wants the agreements to provide more teeth to revenue authorities such as powers of automatic suspension of trade in a particular good if gross misuse of the provisions of agreement is discovered. It has asked the commerce department to review the draft.
"The draft text should be tighter and provide for specific provisions to deal with situations when an agreement is misused," said a ministry official familiar with the discussions on the issue. Indian industry has repeatedly raised the issue of negative impact of free trade agreements on the domestic manufacturing sector. "There is no provision for suspension of a class of goods," the official said.
For example, in the absence of such a provision in the India-Thai early harvest scheme, New Delhi had to alert its Customs ports to disallow jewellery imports.
India had disallowed gold jewellery from Thailand under the FTA after revenue authorities raised an alarm over the violation of rules of origin that mandated 20% value addition in Thailand. Gold jewellery was allegedly being imported via Thailand to take advantage of the lower duty available under the bilateral trade agreement with India.
An explicit suspension provision should have been invoked easily after gross misuse of the agreement was detected by revenue authorities, the official said.
Some trade pacts also do not have specific provisions to deal with situations when a partner does not carry out a requested investigation or verification in agreed time frame.
For example, in the case of India-Thailand, the latter is yet to respond to New Delhi's request of verification of rules of origin certificates.
The finance ministry had earlier sought a review of the country's FTA strategy to ensure an optimum deal for the country. India's manufacturing sector grew by 0.1% in 2012-13 raising all round concerns over the sector taking a big hit from rising imports, in particular the capital goods sector.
India imports of capital goods are nearing the $100-billion mark while domestic production continues to disappoint, as evident from the index of industrial production ( IIP) numbers.
The government has consciously attempted to compress imports this year to rein in current account deficit after it rose to alarming levels of 4.8% of GDP in 2012-13.
Commerce & industry minister Anand Sharma has said all FTAs have an inbuilt review mechanism providing an opportunity for mid-course correction.
Source : economictimes.indiatimes.com
Time For Reform Of Indirect Tax On Oil.
The reported likely shortfall in tax collections is the right trigger for some holistic duty rationalisation in the oil sector. The import duty on crude and refined products should be aligned at exactly the same level, the excise duty on all refined products should be unified and oil products have to be brought under the goods and services tax to prevent cascading of taxes — tax being levied on price inclusive of tax levied at a previous stage — and keep the tax credit chain unbroken. Further, marketing of refined products should be opened up so that the cosy public sector oligopoly is broken and competition eliminates padded costs and margins from the pricing.
In India, there is wide currency for the notion that the import duty on a value added product should be higher than that on its inputs. The notion is ill-founded, for all its long reign in India's tax policy. What really counts is the effective rate of protection, which measures the protection accorded to a good taking into account the tariffs on itself and its inputs, besides the value added in its production. And the way it works out is that a duty differential between input and finished goods yields a very high rate of effective protection.
When the import duty is pegged at the same rate for inputs and the finished good, the effective protection is also at the self-same rate. In the case of crude and products, the present practice of keeping import duty on crude at zero, while it is 2.5% on diesel and petrol and 5% on other products, gives refineries huge effective protection.
It also robs the exchequer of legitimate revenue. A sensible reform is to introduce a positive but low import duty on crude and lower the import duty on products to that level. This will bring in welcome revenue, lower the hurdle for independent marketers who wish to import petrol and diesel but have to pay duty on these and compete with refineries that get their crude duty-free.
Diesel prices would go up a little, but not wildly as padded costs would go and competition would check prices. Petrol prices would come down sharply. And so would the fiscal deficit, without savaging Plan spending.
Source : economictimes.indiatimes.com
Msme Ministry To Organise Export Procedure Workshop
The ministry of micro, small and medium enterprises (MSME) will organise a two-day programme (November 23-24) on export documentation and procedure, which will present an overview of opportunities in the business of exporting castings, forgings and engineering components.
The programme will take place in Faridabad, in the National Capital Region, at the MSME Technology Development Centre, according to a bulletin on the website of the Federation of Indian Micro, Small and Medium Enterprises (FISME).
The export business requires special documentation depending upon the type of product to be exported and the destination. Export documents not only give details about the product and its destination port, but are also used for the purpose of taxation and quality control certification, according to the website.
It said that the programme will help exporters understand that export documentation is far more than just shipping paperwork, and includes all the important records of an international transaction. It will explain the need to use the correct trade terminology, clearly define the transfer of interest and liability, select the right method of payment and send the best quotation possible, all of which are are key to effective exporting.
After the sale has been made, proper and timely selection, preparation and distribution of documents are also essential. Documents used in international trade are a reflection of the understanding of the agreement between the seller, the buyer, and third-party service and regulatory agencies, according to FISME.
It added that the programme will help develop the documentation skills of MSME exporters, whose vital role in exports is indicated by the fact they contribute 40 per cent of India's total exports.
Source:- business-standard.com
Vegetable Oils Imports Remain Stable At About Rs 55,000 Cr In 2012-13
NEW DELHI: India's vegetable oils imports remained stable at about Rs 55,000 crore in 2012-13 marketing year ended last month despite five per cent growth in volume as global prices softened, according to industry body SEA.
Vegetable oil import rose by 4.77 per cent at record 10.68 million tonnes during 2012-13 marketing year (November- October) against 10.19 million tonnes (MT) in previous year due to stagnant domestic production and rising consumption.
"We imported veregtable oils worth Rs 55,000 crore in 2012-13 oil year, which is similar to the previous year's level. Global rates were lower by 15 per cent, compensating increase in volume," Solvent Extractors' Association Executive Director B V Mehta told PTI.
India meets more than 50 per cent of their domestic demand through imports. Palm oil is being imported from Malaysia and Indonesia, while soyabean oil from Argentina and Brazil.
Edible oil imports rose to 10.39 MT in 2012-13 from 9.98 MT in the previous year. Imports of non-edible oils increased to 2,93,534 tonnes, from 2,11,098 tonnes, during the period under review.
Besides rising demand and stagnant domestic output, SEA attributed the rise in imports of vegetable oils to inverted duty structure by Indonesia and Malaysia that led to sharp jump in imports of refined palm oil.
Domestic production of vegetable oils was stagnant at 8.09 MT compared to 8.15 MT in previous year.
"Local consumption of edible oils further increased due to increase in per capita consumption (3 per cent) and population growth (1.76 per cent). Also lower price of vegetable oils boosted the consumption," the association had said in a statement last week.
Import of refined palmolein during April to October'13 jumped to over 1.6 million tonne compared to 7,50,000 tonne during the same period of last year.
"Import of edible oil has sharply increased and nearly doubled in six years due to stagnant oilseed production and rising demand. Refined RBD Palmolein tripled in last six years," SEA said.
Source:- economictimes.indiatimes.com
Gold Falls With Silver, Palladium As Global Equities Rise
Gold futures fell the most in a week as a global equity rally cut demand for precious metals as alternative investments. Silver slumped to a three-month low, and palladium capped the biggest drop in six weeks.
The MSCI All-Country World Index of equities rose to the highest since January 2008. Investors awaited details of the last Federal Open Market Committee meeting to be published on Nov. 20. Janet Yellen, the nominee to replace Ben S. Bernanke as Federal Reserve chairman, signaled on Nov. 14 that she would continue record stimulus until the U.S. economy is stronger.
“Money is running toward equities,” Michael Smith, the president of T&K Futures & Options in Port St. Lucie, Florida, said in a telephone interview. “Also, people want more information about what the other Fed officials are thinking about tapering.”
Gold futures for December delivery fell 1.2 percent to settle at $1,272.30 an ounce at 1:56 p.m. on the Comex in New York, the biggest drop for a most-active contract since Nov. 8. The metal has slumped 24 percent this year.
Gold is poised for the first annual decline since 2000. Some investors lost faith in the metal as a store of value amid the equity rally and low U.S. inflation. Economists surveyed by Bloomberg News on Nov. 8 forecast that the Fed probably will delay reductions in bond purchases until March.
The net-long position in gold slumped 37 percent to 55,456 futures and options on the Comex in the week ended Nov. 12, U.S. Commodity Futures Trading Commission data show, the biggest drop since February. Short bets climbed to 54,143, the highest since mid-August.
Source:- bloomberg.com
India: Tea Export Static Since Independence
18-Nov-2013
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:-www.teanewsdirect.com
Rupee Up 31 Paise Against Dollar In Early Trade
Rising for the fourth straight day, the rupee gained 31 paise to 62.10 against the dollar in early trade on Tuesday at the Interbank Foreign Exchange market on increased selling of the U.S. currency by exporters.
Strengthening of euro and yen against the dollar in overseas market and a higher opening in the domestic equity market also supported the rupee, Forex dealers said.
The rupee had gained 70 paise, the most in one and a half months, to close at 62.41 in yesterday’s trade amid a sharp rise in local equities and dollar sales by exporters and banks.
Meanwhile, the BSE benchmark Sensex rose by 69.59 points, or 0.33 per cent, to 20,920.33 in early trade on Tuesday.
Source:- thehindu.com
SC: Winding up proceeding dropped on payment of agreed sum by appellant to respondent-company
CL : Winding up proceedings permitted to be withdrawn on payment of agreed amount by appellant-company to respondent-company
Charging nominal fees for allowing use of invention doesn’t prove profit motive; section 10(23C) reg
IT: Charging a nominal fees by assessee-society from beneficiaries to use coding system and to avail advantages and benefits therein was neither reflective of business aptitude nor indicative of profit oriented intent and thus assessee could not be denied registration under section 10(23C)(iv) on ground that activity of assessee was in nature of trade, commerce or business
Reference to DVO to value investment without rejecting assessee’s books is unjustified rules HC
IT : Without specifically rejecting books of account maintained by assessee, Assessing Officer could not refer matter to DVO for valuation of investment made by assessee in construction of factory building
Sum paid by one advertising agency to another akin to payment to a sub-contractor; sec. 194C attract
IT: Payment made by one advertising agency to other advertising agency for getting work done would be subjected to TDS under section 194C
How much foreign travel exp. is reasonable isn’t a question of law; HC declines to interfere
IT-I : Where in respect of foreign travel expenses incurred by assessee trust on behalf of its settler, Tribunal concluded that 50 per cent of said expenditure was towards business and same was to be allowed as deduction, finding so recorded by Tribunal being a finding of fact, same did not require any interference
Sec. 80P deductions to be denied only to Co-op. banks and not to Co-op. society after insertion of s
IT : Section 80P deductions to be denied only to Co-operative banks and not to Co-operative society after insertion of section 80P(4)
No need to reverse credit if cost of defective capital goods or inputs is recovered from supplier
Cenvat Credit : Where assessee had used input/capital goods and, on finding them defective, had recovered their cost (excluding duty element) from suppliers and had paid duty applicable on clearance of their waste, no reversal could be sought of credit taken in respect of duty paid on such goods
Disallowing an excess depreciation didn’t justify re-assessment if assessee was subjected to MAT pro
IT : Where assessee challenged initiation of reassessment proceedings contending that it was a MAT company under section 115JA/115JB and even after discarding higher rate of depreciation claimed as alleged by revenue, it would have no tax liability higher than what was computed under section 115JA, since said contention had not been raised earlier, matter was to be remanded back to Assessing Officer for disposing of assessee's objection in accordance with law
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