IT : Debatable issue of allowance of prior period expenses cannot be settled by way of prima facie adjustment under section 143(1)(a)
Wednesday 22 January 2014
Liability on freight charges would accrue in current year even on enhancement of such charges with r
IT : For enhancement of contracted freight charges retrospectively, liability arises in current year only
Rubber Trade Deficit Improves In 2013 First Half
The rubber industry continued to show improvement in its trade deficit through the first half of 2013.The trade shortfall through June of last year dipped 2.9 percent to $5.48 billion, compared with an increase of 8.8 percent for the trade deficit of the entire country, according to data from the U.S. Commerce Department.
Exports for the six-month period actually declined 1.5 percent for rubber products, but imports dropped 2.2 percent. Overall, the rate of imports still doubled that of exports for the sector, $10.8 billion to $5.31 billion, respectively.
The six-month shortfall for tires and related products—the biggest category—showed a 3.4-percent decline, with exports down 2.9 percent and imports off 3.2 percent. The deficit for passenger tires actually rose 5.3 percent, but the truck and bus tire shortfall fell 12.1 percent.
In other rubber product categories, the belting deficit dropped 32.8 percent for the first half of 2013, the shortfall for hose rose 20.7 percent, and the pharmaceutical goods surplus decreased by 23.8 percent.
The supply side showed a trade surplus of $241.6 million on the six months, compared with a surplus of just $10.6 million in the first half of 2012. The main difference was that the deficit for natural rubber trade dropped twice as much as did the surplus for synthetic rubber trade.
Source:- rubbernews.com
Adjudicating authority to supply docs along with show cause notice in case of charges of clandestine
Excise & Customs : Adjudicating authority must append all relevant documents with show-cause notice, and if not appended, must provide copies thereof to assessee within reasonable time, before proceeding to adjudicate show-cause notice
HC makes sec. 68 addition on non-verification of share applicants even if their returns were furnish
IT: Where in order to ascertain genuineness of assessee's claim relating to receipt of share application money, Assessing Officer sent notices to share applicants which returned unserved, however, assessee still managed to secure documents such as their income tax returns as well as bank account particulars, in such circumstances, Assessing Officer was justified in drawing adverse inference and adding amount in question to assessee's taxable income under section 68
Stanchart Calls Time On Wheat Rout As Algeria Buys
Standard Chartered called time on the slide in wheat prices, saying that "pipeline demand is improving", even as Algeria and Iraq bought some 850,000 tonnes between them, and amid talk of renewed Chinese interest too.
StanChart cut by $1 a bushel its forecast for wheat prices this year, noting the 14% drop in Chicago futures since the end of November, a slide it attributed to a strengthening dollar, making the grain more expensive to buyers in other currencies, besides some substitution with cheaper corn.
"Feed demand for wheat faces stiff competition from corn, as well as barley, on account of a large harvest," StanChart analyst Abah Ofon said.
However, there remained enough buyers to believe that Chicago wheat futures might average $5.75 a bushel in the current quarter, above the level the March contract was trading at on Wednesday, before staging a recovery to end 2014 at about $6.00 a bushel.
"We believe end users will view the current season's abundance of wheat as an opportunity to stock up, thereby limiting price declines," Mr Ofon said.
He flagged in particular dynamics in India where, while many investors have focused on expectations of a record harvest this year, StanChart noted expectations of a rise to 90m tonnes in demand, from an average of 82m tonnes over the previous three seasons.
"This increase reflects greater government participation in order to ease supply-chain bottlenecks in its public distribution system and as an attempt to keep inflation in check," Mr Ofon said."This will have implications for the global wheat market."
Rising consumption, "coupled with pressures on yield, acreage and inventories suggest that India's exportable surpluses could be pressured, supporting global prices in 2014".Furthermore, the level of stocks in major exporting countries, such as Australia, Russia and the US, remains relatively low, compared with demand.
"For major exporters, this year's stocks-to-use ratio is markedly lower than the three-year average, which will be price supportive," Mr Ofon said.Indeed, such a picture contrasts with the level of demand from importers.
"Although global consumption should increase by more than 5m tonnes [in 2013-14], this is dwarfed by a likely 20m-tonne increase in export volumes, suggesting strong trade momentum."
While wheat prices "will remain under pressure" in 2014, they should "find a floor" in the current quarter, Mr Ofon said.The comments came as traders reported that Algeria's state grains agency, OAIC, had bought 500,000 tonnes of wheat, and potentially more, at $285-288 a tonne including cost and freight.
Ideas of a larger order have been supported by talk that the delivery period spanned both April and May, rather than just the May period initially expected.
The purchase, probably of French grain, comes as other buyers are also seeking to purchase with the market, as measured by Chicago futures prices, at its weakest level since summer 2010.
Separately, Iraq bought 200,000 tonnes of hard wheat from Australia, 100,000 tonnes from Canada and 50,000 tonnes from the US, for prices believed to be between $334.78-349 a tonne, on a cost and freight free out (ciffo) basis.
Egypt, the world's top importer, has bought nearly 900,000 tonnes of wheat this month at tender, while China is also rumoured to be investigating purchases.
Brian Henry at Benson Quinn Commodities noted "talk that China is interested in securing another 200,000 tonnes of wheat with ideas that they will look to the US and/or Australia to find supply."
Source:- agrimoney.com
TPO ought to have first analysed internal comparable before external one for making TP adjustment, r
IT/ILT : Where TPO held that guarantee commission paid by AEs to assessee had to be benchmarked with external comparables, in view of fact that, internal CUP was available in case of assessee itself in form of guarantee charges, charged by bank from assessee, same ought to had been first analyzed and examined
Deeming fiction of sec. 50C is applicable on seller and not on buyer of property, rules HC
IT : Deeming fiction created by section 50C which substitutes consideration received on sale of a capital asset by stamp duty valuation, is applicable only in case of a seller and not buyer of property
India Sets Textile Exports Target At Us$60 Billion For 2014
At the inauguration of Tex-Trends India 2014 on Monday, Mr. KS Rao, India’s Union Textiles Minister, announced that the government has set the target for textile exports in the 2014-15 financial year at US$60 billion. The Tex-Trends India 2014 textile show is a three-day event in New Delhi, and represents a joint initiative between India’s Ministry of Textiles and Ministry of Commerce & Industries.
“Next year, the textiles exports target will be US$60 billion, having seen the potential and concentrating on skill development in the country, focus on textile sector by the government and also the necessity of the advanced nations to depend entirely on Asia, especially China and India,” said Mr. Rao.
Though the target of US$60 billion would be an ambitious 30 percent jump from the current financial year’s target of US$43 billion, Mr. Rao expressed that it would not be difficult to reach that target by March 2015. Simply addressing issues of procedural clearances is expected to result in an 8 percent increase, and Mr. Rao assured that all procedural hurdles for exports would be cleared during his term.
According to figures released by the RBI, textile exports reached nearly US$14.9 billion in the first half of the current financial year 2013-2014. Ready-made garment exports accounted for almost half of that figure, at US$7.1 billion. Apparel exports experienced sustained growth of 15 percent over the last nine months from April to December 2013. Cumulative export data for the same period reveal an increase of 16.3 percent over the same period in the previous financial year, reaching US$10.56 billion.
India’s textile industry is one of the leading textile industries in the world, exporting to over 100 countries. It contributes a significant 17 percent to India’s overall export earnings and employs over 35 million people directly, making it the second largest source of employment after agriculture.
Source:- india-briefing.com
Coal Imports Up 21 Percent In 2013 - Research Firm
India's coal imports rose 21 percent to 152 million tonnes last year as power producers bought more due to low prices and a domestic shortage, research firm OreTeam said, adding that shipments could rise to 170 million tonnes this year.
Bureaucratic, environmental and legal delays in adding new mines and expanding existing ones have made India the No. 3 importer of coal, behind China and Japan, even though it sits on what BP Plc (BP.L) ranks as the world's fifth-largest reserves.
Most of the imports come from Indonesia, South Africa, Australia and Canada. India shipped in a total of 126 million tonnes of power-generating thermal coal, steelmaking coking coal and processed coking coal, or metallurgical coal, in 2012.
"Rising thermal coal demand is the major reason behind India's surging imports," said Prakash Duvvuri, head of research at OreTeam, which collects data from its representatives at ports, mining regions and companies.
The imports were also helped by weak prices. Benchmark thermal coal prices hit their lowest levels in almost four years in September, dropping below $77 a tonne mainly due to oversupply in Australia, Indonesia and the United States.
In the United states, the shale oil and gas revolution has made more coal available.Prices have recovered from September's deep trough, but are still not much higher than $82 a tonne.
India's thermal coal imports are expected to continue to rise in coming years as it races to increase its per-capita power consumption of about 778 kilowatt-hour (kWh), equivalent to about 30 percent of the global average of 2,600 kWh.
The country's power generation is expected to rise 7 percent to 975 billion kWh this fiscal year ending March 31, with most of that powered by coal. The federal government has also approved many power projects that would add to the demand.
Though the government does not regularly release data on coal imports, the Coal Ministry has said domestic output could fall short of demand by 155 million tonnes this fiscal year.That could lead to a 13 percent rise in imports for the year ending March 31 from 137.56 million tonnes in the year earlier.
More than 80 percent of India's coal production comes from state-run Coal India Ltd (CIL) (COAL.NS), which has fallen short of its production target for at least the past six years due to difficulties in obtaining environmental approvals, lack of railway access and other issues.
Its April-December output of 319.2 million tonnes was 4 percent less than its target for the period.CIL, the world's largest coal mining company, estimates a shortage of 350 million tonnes for 2016-17.Indonesia would likely be the biggest beneficiary of that shortfall; it already accounts for more than 50 percent of India's coal imports.
Goldman Sachs said on Tuesday that global demand for thermal coal will rise 2.75 percent a year between 2014 and 2017, driven by Japan, South Korea and emerging markets such as India.
Source:- in.reuters.com
Pakistan Halts Gold Imports Again To Stem Smuggling Into India
Pakistan has temporarily banned gold imports for the second time in six months as it tries to stem smuggling into India, which has clamped down on its own bullion buying to rescue state finances.
India's import duty stands at a record 10% and tight restrictions on supplies have virtually dried up legal imports into what used to be the world's biggest bullion buyer, spurring a surge in smuggling and recycling to meet persistent demand.
"Credible reports have indicated that in the wake of steep increase in duty on import of gold in a neighbouring country there has been a surge in its smuggling activity," Pakistan's finance minister said, according to a statement on the ministry website (here).
It said the ban would be for 30 days and exports, mostly jewellery, would not be restricted. Pakistan last banned imports for a month in August, 2013.
Official imports into India shrank almost 90% in the six months to November as restrictions tightened. Between April and September — the latest data available — customs officials seizures of illegal gold nearly doubled compared to all of 2012.
The World Gold Council puts the amount smuggled into India at up to 200 tonne in calendar 2013.
Pakistan usually imports tiny amounts in comparison with its much larger neighbour, although imports surged last year and purchases in July — the last month before the previous ban — amounted to $514 million.
Pakistan said the ban would also check speculation on its currency.
Gold is India's most expensive non-essential import and helped to swell its current account deficit to a record last fiscal year.
But restrictions have worked and the deficit is now expected to be about $50 billion in the current fiscal year, down $20 billion from earlier estimates.
That has prompted the government to consider relaxing curbs, according to government sources speaking earlier this month.
With India's wedding and festival season in full swing, demand remains strong, keeping premiums near record highs at around $130 per ounce. That has encouraged recycling of existing jewellery to meet demand and also boosted smuggling.
New Delhi's latest attempt to check illegal imports focuses on the biggest buyers, with jewellers now required to give details of any purchase of gold bars or jewellery worth over Rs 500,000 by the end of the month.
Source:-financialexpress.com
TPO ought to have first analysed internal comparable before external once for making TP adjustment,
IT/ILT : Where TPO held that guarantee commission paid by AEs to assessee had to be benchmarked with external comparables, in view of fact that, internal CUP was available in case of assessee itself in form of guarantee charges, charged by bank from assessee, same ought to had been first analyzed and examined
Even excessive delay in filing of appeal may be condoned if there are sufficient causes
GST : Where assessee's factory had been sealed/taken over by State Industrial Development Corporation towards its dues and assessee had left India and assessment proceedings were initiated only thereafter, delay of 11 years caused in filing appeal on account of consequent lack of awareness should be condoned on payment of costs
Lopsided contract not providing for mutual penalty for non-performance is unfair and abuse of domina
Competition Law: A condition in contract which gives liberty to one party to breach contract at peril of other party, prima facie is an unfair condition and would amount to abuse of dominant position by opposite party which was in a dominant position
Speed post isn’t a valid mode of serving order under Central Excise Act, rules HC
Service of notice, etc. : Method of serving order by Speed Post is not one contemplated by section 37C of Central Excise Act, 1944, which requires communication of order by registered post with acknowledgement due
Bottling of LPG gas into cylinders tantamounts to manufacture for sec. 80-IB relief
IT: Process of bottling of gas into gas cylinders, which requires a very specialized process with an independent plant with machinery, amounts to production of 'gas cylinders' for purpose of claiming deduction under section 80-IB
Tribunal can't take a contrary view without disagreeing with reasons of order passed by Commissioner
Service Tax : Unless reasons recorded by Commissioner (Appeals) are reversed by Appellate Tribunal, it is not open to Appellate Tribunal to take a contrary view
Conditional relief that assessee won't seek adjournment, had to continue as ITAT granted adjournment
IT/ILT : Where stay order was granted by ITAT on condition that no adjournment would be sought by assessee, mere citing of pendency of a similar case by assessees, before ITAT, would not amount to violation of above condition and revenue could not appropriate any part of tax deposited so far
HC admits winding-up petition against Co. after finding its undertaking not bonafide and as an after
CL: Where undertaking executed by respondent and unequivocal endorsement made upon balance confirmation letters established that dispute regarding debt payable by respondent-company to appellant was neither bona fide nor substantial, winding up petition against respondent-company was to be admitted
Notice to file return of block period in less than 15 days is valid if it isn’t detrimental to asses
IT: Proceedings in pursuance to notice issued under section 158BD giving less than 15 clear days time to assessee to file return for block period would be void ab initio only in a case where prejudice is shown to have been caused to assessee or where notice has not been served at all to assessee
SEBI toughens IT governance framework of depositories; asks them to formulate IT strategy panel
SEBI : (Information Technology) IT Governance for Depositories
Exp. incurred by assessee on tenancy rights during acquisition of running business was in nature of
IT : Where assessee purchased a running hotel business and vendor had to secure lease rights of premises from owner, expenditure incurred towards such tenancy right should be allowable as revenue expenditure
Since assessee failed to point out any defect in ITAT's order, rectification application dismissed
IT/ILT : Where assessee filed an application under section 254(2) seeking rectification of Tribunal's order confirming transfer pricing adjustment taking a plea that Tribunal failed to consider various grounds such as brand value of comparables, related party transactions, tolerance range etc., in view of fact that said issues had been considered in detail and there was no obvious or patent error in Tribunal's order, instant application was to be dismissed
Cenvat credit available for fuel used by one unit to generate power for consumption by two manufactu
Cenvat Credit : Fuel used for generation of electricity, a part of which is also supplied to another unit of same manufacturer, is eligible for credit as input; assessee is not required to have two separate power facilities for two different units
CLB while operating as executive Court is bound by all limitations which an executing Court is subje
CL: Where under family settlement company was to give petitioner a portion of land and acting on same company suitably arranged for consolidated plot and also incurred additional cost in purchasing strip of land to give petitioner right to access, same could not be rejected by petitioner once they agreed to demarcation
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