IT/ILT : Section 90 of The Income-Tax Act, 1961 – Double Taxation Agreement – Agreement for Avoidance of Double Taxation and Prevention of Fiscal Evasion With Foreign Countries – Albania
Thursday 16 January 2014
Construction co. liable to pay tax on ‘Annual Letting Value’ of its unsold flats as income from hous
IT: Where building plans were approved after 1-10-1998, deduction under section 80-IB(10) was allowable
Matter remanded to ensure that belated recovery of sales due to natural calamity was causing delay i
CST & VAT : Question whether 'delay in payment of VAT due to natural calamity affecting particular sales zone leading to delay in recovery from buyers' is a reasonable cause for failure to pay tax in time is a finding of fact
Receipts of security deposits from customers for supply of cylinders won’t be taxable as trading rec
IT : Where assessee, a manufacturer and supplier of gas in cylinders, received security deposit from customers, in view of fact that money received as security was never part of sale price and that security money was refundable to customers, it could not be brought to tax as trading receipt
Excise valuation under Rule 10A isn’t applicable if assessee isn’t working on behalf of another pers
Excise & Customs : Where assessee engaged in body building work on duty paid chassis was not, prima facie, acting on behalf of supplier of chassis, Rule 10A of Central Excise Valuation Rules, 2000 was inapplicable
Fee paid by share transfer agents to depositories to access their database won’t attracts sec. 194J
IT : Payment by share transfer agent to Depositories for availing access to database for downloading data electronically, is liable to TDS under section 194J
Cotton Prices Rise As Buying Revives
Revival of buying interest from leading spinners pushed cotton prices higher on Thursday. The ginners who had been reluctant to dispose of their stocks readily obliged buyers at higher price calls.
However, trading remained focused on quality lint as spinners were keen to build upon their stocks to meet expected higher export commitments owing to free-market access to European Union and larger orders booked in Heimtextil fair in Germany, brokers said.
Analysts believe that higher off-take of cotton from spinners earlier this season has now left little stock with ginners.
There are strong indications that this season the country will have to import higher quantity of cotton to meet export contracts of value-added textile sector and also of semi-finished textile goods in the form of higher count yarn to the EU market.
The world cotton markets also remained firm because of strong demand for cotton where New York cotton rose further for all future contracts. Despite having bumper cotton crop, the price of Indian cotton was also showing upward trend on strong domestic demand and higher cotton yarn imports from China.
The Karachi Cotton Association (KCA) raised its spot rates by Rs50 to Rs7,050 per maund, which is the highest in the current season.
Trading on ready counter was fairly brisk and the following major deals were reported to have changed hands: 400 bales, Kazi Ahmed at Rs7,000, 400 bales, Daulatpur, at Rs7,125, 200 bales, Daur at Rs7,200, 200 bales, Pano Akil, at Rs7,200, 400 bales, Faqirwali, at Rs7,000, 400 bales, Khanewal at Rs7,100, 400 bales, Sadiqabad at Rs7,150, 400 bales, M. Pur Dewan, at Rs7,200, 400 bales, Rajanpur at Rs7,200, 2,800 bales, Rahim Yar Khan, at Rs7,200 and 600 bales, Mianwali, at Rs7,200 to Rs7,250.
Source:- dawn.com
Goldman Sachs Sees 2014 As Good Year For Indian Steel Producers
There seems to be a sudden flurry of activity around India’s steel business.First came the decision of a marginal increase by some steel majors in the price of their steel products. Now, this market is turning even more bullish after it was reported that India could end up being a net exporter of steel in FY14 and FY15 as higher capacity additions and low demand forced many Indian steel majors to look at the overseas markets.
A slowdown in exports from China was expected to aid Indian exports, and has buoyed the punters even more.Due to environmental concerns, many analysts expect China to cut steel capacity by 8 percent by FY17. China is estimated to have exported 52 million tons of steel in 2013, but this was expected to decline by 11 million tons by FY15, to the delight of Indian steel producers.
Some brokerage houses had even discontinued actively tracking industrial and cyclical stocks as demand weakened.A report in the Business Standard stated that in the opinion of Credit Suisse, “the cyclical defensives price-to-book gap in India was the biggest in the region. While not all cyclicals were showing promise in equal measure, analysts were indeed betting big on steel stocks,” said this report.
One example of revived interest in the Indian steel story was that of Goldman Sachs. The investment bank re-initiated coverage of three steel stocks — Tata Steel, JSW Steel and Steel Authority of India — in December itself on the belief that India would benefit from the improved global steel outlook. Rising demand from Europe and China, according to Goldman Sachs, means an increase in global steel consumption by 4.7 percent to 1.5 billion tons in 2014.
Indian steel majors like JSW Steel, Essar Steel and Steel Authority of India, perhaps, saw this upswing coming, and aggressively increased their exports. Another steel leader, Tata Steel, though, chose to focus on the domestic market, say analysts.
Even though underlying demand in India remains weak, a weaker rupee compared to the dollar and some supply constraints may help domestic steel prices.
Source:- agmetalminer.com
Indian Iron Ore Exports Fell 52Pct In 2013
Business Standard reported that continuing a downward trend for a fifth year in a row, India's iron ore exports declined 52.5% to 14.1 million tonne for the calendar year 2013.
This includes 820,000 tonne of iron ore pellets. In CY 2012, exports were 29.7 million tonne. The export in 2013 was a tenth of the peak seen in 2009. India is now the 10th largest exporter, from fourth the previous year in the world.
The decline in 2013 was mainly due to the absence of Goa as compared to the previous year. Mining and transportation Goa was suspended there in the second half of 2012, on a direction of the Supreme Court. The continuing ban on export from Karnataka added to the drop.
According to Delhi based OreTeam Exim Private Limited, which tracks the industry "From 2014, the situation might improve but not dramatically. With more caps and bans on production and exports India might never regain its Number 3 ranking in the global export market."
Mr Prakash Duvvuri, head of research of OreTeam said that “CY 2013 also saw India's ranking going below 10th on the global list of exporters of iron ore to China. Till 2011, India was behind only Australia and Brazil, both exporting 90 to 95% of their surplus to the China. In 2012, we slipped to fourth position, behind South Africa. In 2013, India pushed out of the top 10; Iran, Indonesia, Malaysia and Canada were among those which overtook us in the export market. However, we expect Goan iron ore to rejoin the export race in 2014, giving some lift to the volumes."
He said that “On the other hand, the Indian ore pellet export market is likely to remain flat in 2014. Essar, JSPL, Ardent, Stemcor and GPIL are concentrating equally on the export and domestic market. This will ensure some of the pellet volumes are diverted to China and Japan.”
He added that "India's steel consumption and demand growth is unlikely to witness sharp growth to absorb the raw material completely within the country, also one of the prime factors to note in 2014. With a modest growth expected in the steel sector, keeping in view the change of guard at the Centre, it is highly unlikely that any major decisions would break ground in at least in the first half of CY2014. On the Chinese and Japanese front, the demand for Indian iron ore and ore pellets will remain till our exporters have the capability to provide them the material.
Source:- steelguru.com
India Might Export More Wheat In Light Of Record Output
India is likely to soon permit more wheat exports as the world’s second-biggest producer of the grain looks set to harvest a record crop this year, government sources said, swelling stockpiles in an oversupplied world market.
Any extra supply from India, though, could dampen Chicago prices which have fallen around 9% in the past month due to rising global supply. Leading producer Ukraine has already raised its 2013 grains output forecast to a record.
India is extremely cautious about allowing exports of wheat, a staple for its 1.2 billion population, and lifted a four-year-old ban on shipments in 2011 by allowing only private traders to sell on the world market.
But a succession of bumper crops and poor storage conditions that have led to substantial wastage have prompted a rethink on exports.Since last fiscal year India has exported nearly 4.5 million tonnes of wheat from state warehouses, and state-backed traders are now selling another 2 million tonnes via tenders.
In all likelihood, the crop is going to be an all-time high so more exports are almost certain now,” said an Indian government source directly involved in the decision-making process. “But we are yet to take a call on the quantity to be shipped out.
Source:- livemint.com
India Fails To Decide On Incentives For Raw Sugar Exports
India has failed to approve a scheme to promote raw sugar output for export as ministers remained split on Thursday over how best to help mills, trade and government officials said.
Despite sitting on huge stocks of refined, or white, sugar, a global glut has made it difficult for mills in India - the world's second-biggest sugar producer - to export that variety. Indian mills traditionally sell little raw sugar abroad.A rise in sugar refining capacity in Asia and Africa has now given India an opportunity to export raws.But a group of ministers, at a meeting on Thursday, ended without agreement on any of three likely incentives to boost output and exports.
The government is considering giving cash to mills that produce and export raw sugar, paying for transporting sugar to ports from mills, and waiving excise or production tax."Most likely, the government will decide on one of these measures. Any help from the government will be a drag on its resources. Therefore the delay," said a government source directly involved in the policymaking.
Trade and industry officials believe the government would have to dole out around 1,500-2,400 rupees per tonne to help mills produce raw sugar for export if it agrees on any of the incentives.
Some trade and government officials believe the finance ministry is wary of subsidising mills.The exact financial burden has not been finalised, Food Minister K.V. Thomas told reporters after the ministers' meeting.The cabinet, scheduled to meet next week, is likely to take a decision.
A quick decision will help mills to plan and process raws in the next two months when cane crushing starts tapering off, said Abinash Verma, director general of the Indian Sugar Mills Association, a producers' body.Mills also say higher government-set prices have pushed up production costs, forcing them to seek help. The government last month provided nearly a billion dollars in interest-free loans to mills to help them clear cane growers' dues.
Source:- in.reuters.com
Rubber Imports By India Climbing To Record As Supply Shrinks
Natural rubber imports by India, the world’s third-biggest consumer, will surge to a record this year after monsoon rains cut production and as tiremakers increased purchases because of a decline in global costs.
Shipments will probably climb 38 percent to 300,000 metric tons in the 12 months through March from 217,364 tons a year earlier, said Rajiv Budhraja, director general of the Automotive Tyre Manufacturers Association. Imports jumped 53 percent to 264,576 tons from April to December from a year earlier, according to data from the state-run Rubber Board.
Purchases are rising for a fifth straight year as futures traded in Tokyo declined 16 percent in the past 12 months. Tire companies accelerated imports after prices dropped in producing countries such as Thailand, prompting the government to increase the tax on shipments last month to protect domestic growers.
“Imports are here to stay,” said Budhraja, who is a member of the Rubber Board. “The actual output is expected to be lower than the reported figure and this can be seen by the tightness in supply in the domestic market even though consumption hasn’t grown much.”
Production fell 10 percent to 627,000 tons in the nine months through December as consumption slid 2 percent to 728,080 tons, board data show. Heavy rains from July to September cut latex output, said Budhraja. The board predicted in May a 5.2 percent increase in output to 960,000 tons in the year through March and a 17 percent decline in imports to 180,000 tons.
Declining Prices
“In the next two quarters, tire companies will be able to maintain healthy margins because rubber prices have been declining,” said Surjit Singh Arora, an analyst with Prabhudas Lilladher Pvt. in Mumbai. “If the domestic rubber growers decide to hoard supplies as prices are falling and the cost of production is rising, then tire companies may once again buy more from overseas.”
The benchmark RSS-4 rubber in India fell 5.5 percent to 154 rupees ($2.50) a kilogram in the past year, according to the board. Futures in Tokyo traded at 253 yen a kilogram ($2,424 a ton) today. Prices in India averaged $2.8 per kilogram in the nine months through December versus $2.51 in Tokyo, according to data compiled by Bloomberg.
A slowdown in automobile sales in India may weaken demand for tires, said Arora. Passenger vehicle sales are set for the first annual drop in more than a decade, the Society of Indian Automobile Manufacturers said in September. The automobile market, which consumes 65 percent of the rubber, doubled in size from 2008 to 2011, according to Bloomberg Industries data.
Auto Slowdown
“In the next six to eight months, I do not see a meaningful recovery in the auto sector and the situation will continue to be grim,” said Arora. “The slowdown in demand will keep rubber prices subdued.”
The government should consider keeping a buffer reserve of at least 15 days to 20 days of supplies to avoid a shortage, Budhraja said. India buys rubber mainly from Thailand, Malaysia and Indonesia, and is the largest consumer of natural rubber after China and the U.S., according to the Association of Natural Rubber Producing Countries.
Despite the depressed demand scenario, the supply-demand gap continues,” said Budhraja. “Tire companies are importing because there is not enough supply to meet their requirement. If there was positive growth in the auto sector, then there would have been a situation of acute shortage.
Sourcea:- bloomberg.com
Indian Rupee Ends Little Changed At 61.53 Vs Us Dollar In Dull Session
In dull trade today, the Indian rupee erased initial losses and closed little changed at 61.53 against the US dollar, up one paisa, amid alternating bouts of demand and supply.
The Indian rupee opened weak at 61.65 a dollar from the previous close of 61.54 and declined to a low of 61.71 on early demand for the US currency from importers.
It later recovered and touched a high of 61.51 on capital inflows and weakness in the dollar overseas and ended 61.53, a gain of one paisa.
The benchmark 30-share S&P BSE Sensex closed 24 points lower. Overseas investors bought shares worth a net USD 125.44 million yesterday, as per Sebi data.
There were no major cues from overseas as the dollar index was down 0.04 per cent ahead of US jobless claims data later in the day.
"Rupee ended flat, taking cues from local equities which ended near yesterday's close," said Pramit Brahmbhatt, CEO of Alpari Financial Services (India).
Forward dollar premiums dropped further on persistent receipts by exporters.
The benchmark six-month forward dollar premium payable in June dipped to 224-226 paise from 229-231 paise previously.
Far-forward contracts maturing in December tumbled to 457-1/2 to 459-1/2 paise from 463-1/2 to 465-1/2 paise.
The RBI fixed the reference rate for the dollar at 61.5325 and for the euro at 83.8395.
The rupee rose to 100.48 against the pound from 101.11 and improved to 83.72 per euro from 83.85. It ended at 58.73 per 100 Japanese yen from 59.03.
Source:- financialexpress.com
Taxability under the Act becomes irrelevant if income earned by NR isn’t taxable in India as per DTA
IT/ILT : Where non-resident legal service provider had no PE in India and he stayed in India only for 22 days, in view of DTAA between India and Portugal, his income was not taxable in India
No custom duty if confiscated goods were illegally sold by dept. and sale proceeds were paid to asse
Excise & Customs : Where confiscated goods are illegally sold and only sale proceeds thereof are paid to assessee, assessee cannot be asked to pay customs duty, which could be levied only on goods and not on sale proceeds
Courts can’t interfere with powers of SEBI to issue notice seeking safeguarding of interest of inves
SEBI : Notice and direction issued by SEBI to safeguard interest of investors cannot be interfered by Court
Segmental results can’t be considered for selection of comparables if direct comparables are availab
IT/ILT: In course of determination of arm's length price, when direct comparables are available then segmental result of companies engaged in other business should not be taken as comparable
Every info and material furnished by assessee before SetCom to be sent to CIT to enable him to issue
IT/INDIAN ACTS & RULES : Income-Tax (First Amendment) Rules, 2014 – Amendment in Rule 44CA
CG notifies Contributory Health Service Scheme of Department of Space for deductions under Sec. 80D
IT : Section 80D of The Income-Tax Act, 1961 - Health Insurance Premia - Deduction in Respect of.- Notified Health Service Scheme
Sec. 3(3) of Competition Act presumes agreement is anti-competitive; onus on opposite party to prove
Competition Act: In case of agreements as listed in section 3(3), once it is established that such an agreement exists, it will be presumed that agreement has an appreciable adverse effect on competition; onus to rebut this presumption would lie upon opposite party
No penalty if a definite finding was recorded by lower authorities that assessee wasn’t guilty of du
CST & VAT : Where a definite finding is recorded by lower authorities that assessee : (a) was registered under entry tax laws and (b) was paying tax and (c) had produced proof of payment of tax before Assessing Officer and (d) was not guilty of evasion, there was no question of levy of penalty on assessee
No capital gains if firm continues to posses cap asset but rein transferred to new partners by retir
IT: Where retiring partner took cash towards value of his share in partnership firm and there was no distribution of capital assets among partners, there was no transfer of capital asset and, therefore, no profits or gains chargeable to tax under section 45(4) arose in hands of assessee-firm
HC slams revenue for initiating reassessment at instance of audit party without recording his own re
IT: Where Assessing Officer allowed research & development expenses incurred by assessee in respect of in house research as revenue expenditure and subsequently, had initiated reassessment proceedings solely at instance of audit party by recording reasons for which he had no conviction, same was a colourable exercise of jurisdiction by Assessing Officer and could not be sustained
Entity leased out its assets to others to carry on its tourism business, lease income earned held as
IT: Where assessee was engaged in business of developing tourism activities at tourism destinations and it had let out some of guest houses, motels and hotels owned by it to others on basis of lease agreements to run tourism activities, lease rental received by assessee was in nature of business income
Welding electrodes and plastic pallets used in relation to final product are eligible for credit
Cenvat Credit : Welding Electrodes, plastic pallets and plastic crates used in relation to manufacture of final products, are eligible for credit as input
Concealment penalty upheld as co-operative bank was claiming sec. 80P relief even after revocation o
IT : Where assessee co-operative bank did not discontinue its business even after cancellation of its licence for banking activities and proceeded to claim deduction under section 80P, imposition of penalty was justified
Direction given by BIFR to State Govt. to consider sales-tax exemption wasn’t binding on it, rules H
CST & VAT : Where a scheme passed by BIFR only directed State Government to 'consider' extension of exemption and there was no positive order to provide any exemption as a matter of right, such direction could not be held binding on State Government so as to grant extension of exemption
RBI sets-up additional provisioning norms for banks exposure to unhedge Forex of their clients
BANKING : Capital and Provisioning Requirements for Exposures to Entities With Unhedged Foreign Currency Exposure
Matter remanded as comparables chosen by TPO were functionally different and had huge turnover
IT/ILT : Where in course of transfer pricing proceedings, TPO made certain adjustment to assessee's ALP, in view of fact that some of comparables selected by TPO were functionally different whereas some others were having huge turnover as compared to that of assessee, impugned adjustment was to be set aside and matter was to be remanded back for disposal afresh
SSI units are entitled to deemed credit in respect of clearances liable to duty
Excise & Customs : Expression 'units availing of SSI-exemption' means units eligible for SSI-exemption in current year on account of turnover of last year not exceeding prescribed limit and who have availed such exemption in current year
Company Court has no jurisdiction to entertain appeal against order passed by DRT; comes with realm
CL/Debt Recovery : Company Court has no jurisdiction to sit in appeal over order passed by DRT; appeal would lie only before DRAT
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