IT: Where in proceedings under section 143(3), assessee on being asked by Assessing Officer filed several replies as well as details and evidences and Assessing Officer after considering same took one of views possible in matter, order of Assessing Officer could not be said to be erroneous insofar prejudicial to interest of revenue
Wednesday 12 February 2014
Sec. 69 additions confirmed by applying 'Peak Credit' theory as assessee was practicing cash recycli
IT : Mere assertion that AOP is in existence cannot be accepted unless and until supported by clinching corroborative evidences
Maintenance charges for let out property are taxable as income from business and not from house prop
IT: Income derived from letting out out-fits, fixtures, furniture, etc., is not chargeable under head 'income from house property'
Tribunal rightly order for pre-deposit as Cenvat credit was fraudulently taken by assessee on raw ma
Cenvat Credit : Where assessee had perpetuated a fraud while availing Cenvat credit on raw material allegedly procured from various sources, though no such material was procured, Tribunal order directing part pre-deposit as a condition of hearing appeal could not be faulted
Capital gain arose from sale of investments made in a co. to promote agro industry
IT : Where assessee-corporation along with private entrepreneurs made investment in shares of companies which were formed with object of promoting agro/horticulture based industry in State, income arising from subsequent sale of those shares was to be taxed as 'capital gain' and not as a 'business income'
HC raps AO for initiating reassessment even prior to transfer of assessee's case to his jurisdiction
IT : Where assessee was residing at Chennai and was filing returns of income with Assessing Officer, Chennai, whereas his proprietorship concern was situated at Suratgarh and Assessing Officer, Suratgarh issued on him a notice under section 147/148 on 3-4-2006 for assessment year 2003-04, since proposal for transfer of jurisdiction over assessee from Chennai to Suratgarh materialized only on 21-8-2007, proceedings initiated by Assessing Officer, Suratgarh prior to this date could not be consider
Order of AO can't labelled as erroneous if passed after considering details and evidences furnished
IT: Where in proceedings under section 143(3), assessee on being asked by Assessing Officer filed several replies as well as details and evidences and Assessing Officer after considering same took one of views possible in matter, order of Assessing Officer could not be said to be erroneous insofar prejudicial to interest of revenue
There Is No Ban On Textile Import In Ghana
The government has not taken any decision to ban the import of textiles into the country, the Minister of Trade and Industry, Mr Haruna Iddrisu, has stated.
“Let me emphasise that there is no government policy which is seeking to ban the imports of textiles into the country; what we are seeking to do as a government is to regulate the entry of all textiles into Ghana through defined and designated routes in order to have improved statistics and control illegal importation,” he said.
The minister was speaking at a national stakeholders forum organised by the Ministry of Trade and Industry on a national crusade against trade in pirated Ghanaian textiles. It is aimed at finding solutions to the eminent crises facing the country’s textile industry.
According to him, the policy of government to discourage imports of all categories of goods and to expand exports generally into the country remained a priority although imports must be done legally “to improve our foreign exchange standing in order to improve the growth of the national economy.”
The issue of trading in pirated textiles by the market women, particularly local designs and trademark, is not only an infringement on intellectual property but is also facilitating the illegal importation of pirated textiles into Ghana.
The issue about textile importation has generated a lot of controversy in recent years because of the impact it is having on the local textile industry.
Today, the production capacity of the local textile producers has drastically gone down beyond what can even sustain their businesses, a situation which compelled them to cry for government intervention.
New dimension
Meanwhile, a worrying phenomenon has arisen in relation to how designs of the local companies find their way outside the country.
It was against this background that the sector minister called for the protection of trademarks and designs of local textile manufacturers.
Mr Iddrisu also gave a hint that some workers of the local textile companies allegedly engaged in unlawfully trading some of the designs to their agents in China and India, something the minister said was as not acceptable. He, therefore, urged them to desist from that unpatriotic practice.
The debate about the influx of pirated textiles necessitated the formation of an anti-piracy tax force to check the menace, which made some inroads until its suspension late last year on the order of the President.
Advice to market women
The minister also advised the market women to desist from contributing to the collapse of the local textile industry.
“Do not engage in the importation of pirated textiles. It is still profitable to engage in legitimate business of imports of textiles. Do our country proud, show some patriotism and demonstrate respect that you will honour the president,” he said.
Sensitisation exercise
Meanwhile, a member of the task force and the vetting committee on the importation of African Textile Designs, Mr Appiah Donyina, said the taskforce would embark on various sensitisation exercises to educate people on the difference between genuine and pirated textiles.
Source:- spyghana.com
Cotton Exports Likely To Be Hit On Chinese Move To Cut Inventories
China’s plan to sell raw cotton cheap in the domestic market to cut down its inventories may hit exports from the country. With massive reserves to offload, allocation of import quota by the country has become uncertain.
China could cut the base selling price of 18,000 yuan/tonne (?1.84 lakh) of cotton by about five per cent to spur purchases, according to trade sources. This may diminish the arbitrage advantage offered by Indian imports. Now, Indian raw cotton is available for Chinese mills are at around 12,301 yuan.
Chirag M Pan, Chief Executive Officer of Rajkot, Gujarat-based Jaydeep Cotton Fibres, which shipped 40,000 tonnes of raw cotton, about 65 per cent of its exports, to China during 2012-13, says exports will come down significantly this year. “Since the Chinese markets are closed for New Year, we are not able to get the indicators on whether more import quotas will be issued. We have been receiving reports about a price cut, but nobody can predict Chinese policy.”
Unwinding inventory
According to the Chinese Government’s cotton news website cncotton.com, as on January 22, about 4.01 lakh tonnes of cotton found their way into the textile mills and garment factories jeopardising Indian exports.
Why China is doing this is not far to seek: A 2011 procurement programme to allay fears of cotton growers and encourage planting boomeranged. It had set a high floor price of 19,800 yuan a tonne (?2.03 lakh), at least 4,000 yuan higher than the prevailing global average, jacking up prices of domestic cotton yarn and making Indian imports attractive.
Last month China said it is unwinding the inventory it built over the last three years, and support growers through a subsidy programme.
The US Department of Agriculture estimates say by March 2014 China will be stuck with more than 58 million tonnes or 60 per cent of the global cotton inventory.
Import quota
DL Sharma, Managing Director, Vardhman Yarns and Textiles Ltd, said, “With such high reserves, I wonder if China will issue more import quotas.” It could cut back on duty-free import quota. The country has a complex “sliding tax” system, where imports above the quota attract duties in the range of 4-40 per cent.
Source:- thehindubusinessline.com
India Approves Financial Incentives For Sugar Exports
India's cabinet on Wednesday decided to give financial incentives for export of raw sugar to domestic mills, a decision that may push up global supplies and reduce near-term prices of the sweetener.
The government would give 3,333 rupees ($54) per ton on exports of raw sugar to compensate domestic millers buying cane from farmers at high state-fixed prices, but the cabinet would review the amount of incentive after a couple of months, a senior government official, who declined to be named, told The Wall Street Journal.
The industry has been saying they need such an incentive to enable them to ship out excess stocks.
Global traders have been closely watching the Indian government's plan to offer cash incentives for exports of raw sugar. India is the world's second-largest producer of sugar after Brazil.
The government will offer the cash incentive on exports of up to 4 million metric tons of raw sugar.
Indian sugar mills are stuck with piles of sugar after a bumper crop as domestic prices have dropped below the cost of production in the past year.
The Indian Sugar Mills Association said in a statement that it welcomed the government's decision in helping them dispose off 4 million tons of surplus sugar.
"This will give some of the much required liquidity to sugar mills," it said, adding that the move help them pay dues to cane growers.
Local sugar prices have fallen about 15% to 26,500 rupees ($426) per ton in the past one year due to a supply glut and mills have been struggling to pay the cane purchase price to the farmers.
Source:- online.wsj.com
Rice Exports From India Climbing To Record On Mideast Demand
Rice shipments from India, the world’s largest producer after China, will probably expand to a record as buyers from Iran to Saudi Arabia boost purchases of aromatic basmati grain used in biryani and pilaf dishes.
Exports are set to increase 7.8 percent to 11 million metric tons in the 12 months through March from a year earlier, said M.P. Jindal, president of the All India Rice Exporters Association. Sales of basmati may jump 14 percent to 4 million tons as cargoes of non-basmati varieties advance 4 percent to 7 million tons, he said in a phone interview.
Shipments are increasing from India as Thailand, once the world’s biggest supplier, is also set to boost exports. The Southeast Asian country has built record stockpiles big enough to meet about a third of global import demand under a buying program that started in 2011. Farmers are demanding the government sell the reserves to pay for their crop.
“India has an edge over other countries because of quality and price competitiveness,” said Faiyaz Hudani, an associate vice president at Kotak Commodity Services Ltd., a Mumbai-based broker. “When the output is high and the pace of growth is stable, there is no cause of concern.”
Rising sales may benefit Indian shippers such as KRBL Ltd. (KRB), LT Foods Ltd. (LTFO) and Kohinoor Foods Ltd. (KFL)
India is targeting production of 106.3 million tons in the year through June, compared with a record 105.3 million tons in 2011-2012, according to the Agriculture Ministry. The harvest would add to global inventories estimated at 109 million tons in 2013-2014 by the London-based International Grains Council.
Thai Stockpiles
The price of Thai 5-percent broken white rice, a benchmark grade, fell 23 percent in 2013, the most in at least five years, and was at $460 a ton yesterday. A slump to $370 by March is possible as grain is offloaded from state granaries, according to Chareon Laothamatas, president of the Thai Rice Exporters Association. Rough-rice futures on the Chicago Board of Trade rose 0.6 percent to $15.625 per 100 pounds yesterday.
Thailand may not be able to find enough buyers for its stockpiles because major importers in Africa and the Philippines increasingly prefer grain from Vietnam and India, according to Darren Cooper, a senior economist at the council.
“Thailand will try to dispose of the stockpiles at whatever price it gets,” said B.V. Krishna Rao, managing director of Pattabhi Agro Foods Pvt., an Indian exporter. Shipments may not be affected by rising Thai sales as the two countries catered to different markets, he said.
Basmati Demand
The U.S. Department of Agriculture expects Thai inventories to reach a record 14.7 million tons this year, compared with 6.1 million in 2010. Shipments will probably be 8.5 million tons, the USDA forecasts.
Basmati rice exports from India are climbing as Iran is building reserves, said Jindal at the exporters association. Sales to Iran jumped to 1.28 million tons in the nine months through December, exceeding the 1.07 million tons for whole of 2012-2013, according to the association. The country is India’s biggest buyer of basmati and imports 1.5 million tons annually.
“The price of basmati was good this year and overseas demand was more throughout the year from all countries including Iran and Saudi Arabia,” Jindal said on Feb. 4. “Exports to Iran are higher as it buys for keeping certain reserves.”
India supplies 65 percent of the overseas basmati rice market, while Pakistan accounts for the rest, according to the state-run Agricultural and Processed Food Products Export Development Authority. Saudi Arabia and Iran are the two major buyers of Indian basmati, while Africa is a major destination for non-basmati varieties.
Source:- bloomberg.com
Learning With The Times: India's Gas Pricing Demystified
Before 1987, ONGC and Oil India Ltd fixed gas prices. But from January-end 1987 the government began regulating prices on a cost-plus basis. The last revision under this so-called administered price mechanism was effective July 2005. When the government began bidding out oil and gas blocks under the New Exploration and Licensing Policy (NELP), it opted for marketdetermined rates for gas.
The producer enjoyed marketing freedom but needed to get the pricing formula approved through 'arm's length pricing'. (This is a transaction where buyers and sellers act independently. They have no relationship with each other. This ensures that both parties are acting in their own selfinterest and are not subject to any pressure or duress from the other party). In 2006 the first controversy began when Reliance Industries invited bids from users and arrived at a price of $4.32 per million metric British thermal units. The matter was referred to an empowered group of ministers headed by Pranab Mukherjee which agreed on a price of $4.20 a unit after suggesting a few changes to RIL's formula, including elements to do away with volatility.
The Cabinet Committee on Economic Affairs approved a new formula based on recommendations of a committee headed by C Rangarajan, chairman of the Economic Advisory Council to the PM. The new policy was based on the price of Indian liquefied natural gas (LNG) imports. Then, the weighted average price at major trading hubs in the UK, the US and Japan was also calculated. Finally, a simple average of the prices of imported LNG and the average international price was calculated. Based on this formula, the current price of domestically-produced gas works out to $6.7 a unit, which will go up to $8.4 a unit from April when the new fi ve-year pricing policy kicks in.
The change was undertaken because the current pricing policy expires at the end of March 2014. The Rangarajan Committee had suggested the new formula arguing that no market-determined arm's length price was available in India and is unlikely to happen for several more years.
Apart from the impact on consumers, many, including some MPs, have alleged corporate influence in policy formulation. Some cabinet ministers questioned the rationale for price revision although officially, the government has maintained that the guidelines will help incentivize investment and check cartelization.
Source:- timesofindia.indiatimes.com
India Average Containerized Scrap Import Prices Rise To $376.25 A Ton In January
India's average containerized scrap import prices rose by 1.2% month-on-month to $376.25 a ton in January this year, as per the latest figures released by the The Steel Index (TSI).
The turn of the year brought a renewed sense of optimism to the Indian market, with momentum increasing throughout January, and relatively strong demand for finished steel products bringing sub-sequent price rises.
A weakening of the Rupee towards the end of the month served to make scrap imports more expensive as buyers found their purchasing power reduced. This meant sourcing domestic scrap where possible became a more favourable option for buyers.
This shift in sentiment and the weakened Rupee began to be reflected in the price of scrap imports, rising US$12/tonne throughout the month from $370 a ton to $382 a ton.
The majority of material was sourced from the Middle East and South Africa, which was largely sold at a significant discount compared to the material sourced from the UK and Europe later in the month. The smaller mills tended to source these lower grades of Middle Eastern origin, or secure domestic material.
Source:- metal.com
Global Cues To Keep Domestic Gold Prices Firm
Gold prices on domestic spot and futures market are set to rule firm, taking cues from the global market.Gold seems to have overcome the technical barrier of $1,275 an ounce, while short-covering is also keeping prices firm. Aiding the yellow metal further is US Fed Reserve chief Janet Yellen’s comment that the central bank would be measured in its steps to pare the stimulus programme.
This could mean that the US Fed may not rush through to end the stimulus programme through which money is pumped into the economy by buying bonds and other assets. The stimulus, aimed at boosting the economy, has already seen two cuts this year by $10 billion each in January and February to $65 billion a month.
The trade could get further cues from the US jobless report and weekly retail sales due later in the day.Gold holdings in SPDR Trust, world’s biggest gold backed exchange-traded fund, remained unchanged at 797.85 tonnes.
But all is not glittering for gold as Goldman Sachs in a report overnight said that prices could drop to $1,050 an ounce by the year-end. Depreciation in emerging-market currencies may hurt jewellery demand, it said.
“The path will be more of a slow grind lower over the course of the year unlike last year as markets will wait for strong economic data to confirm that US economic growth is accelerating and that the US Federal Reserve will continue to reduce the accommodative monetary policy,” Goldman Sachs said in the report.
Analysts say gold needs a compelling reason to discourage investors from resorting to profit-booking. In the Indian context, currency movements will also matter as a weak rupee against the dollar makes imports of gold, crude oil and vegetable oils costlier.
By mid-day in Asia, spot gold ruled at $1,291.78 an ounce and gold futures maturing for delivery in April at $1,291.50.Spot gold on NCDEX in the domestic market ended a tad lower at Rs. 30,080 for 10 gm.Gold futures maturing for delivery in April on MCX and NCDEX are likely to rule firm over Rs. 29,000.
Crude oil prices will rule firm with US stockpiles dropping to eight-month low. Forecast of the cold spell continuing in North America is likely to add fuel to rising prices.
Brent crude for delivery in March ruled at $108.61 a barrel and US crude for delivery the same month at $110.08.With Brazil offering soyabean at competitive prices and China switching to the South American bean from US deals, the oils and oilseed market will come under pressure. Profit-booking is also likely in the futures market.
Soyabean on Chicago Board of Trade for delivery in March ruled at $13.27 a bushel. Crude palm oil on Bursa Malaysia Derivatives Exchange opened higher at 2,648 ringgit or $796 a tonne.
While projections of a higher carryover stocks continue to cast shadow on corn (industrial maize), warm US weather is dragging wheat.CBOT wheat for delivery in March ruled lower in Asia at $5.86 a bushel and corn for the same month at $4.39 a bushel.
Source:- thehindubusinessline.com
Case remanded to analyze additional evidence furnished by assessee to substantiate ALP of transactio
IT/ILT: Matter remanded where assessee had collated supplementary evidence to corroborate arm's length nature of its international transactions in adherence to principles
HC sets aside ex-parte order as date of hearing was not specified to assessee when he was seeking mo
CST & VAT : Where no fixed date of hearing was specified to assessee and assessee had requested for grant of more time, passing of revisional order ex parte was violative of principles of natural justice and was set aside with remand of matter
Provisional liquidator posseses powers of Court; he can invite claims made by or against company: HC
CL : Provisional liquidator has power to invite claims having regard to provisions of section 446(2)(b)
Retainer fee to doctor would attract sec. 192 TDS instead of sec. 194J if terms of contract prove hi
IT : Cumulative effect of agreement with retainer-doctor is decisive as to whether TDS to be deducted under section 192 or under section 194J
AO can't invoke addition under sec. 41(1) merely on basis of time barred liability, rules HC
IT : Where assessee had outstanding creditors for goods and Assessing Officer made addition in income of assessee under section 41(1) on basis that with respect to 14 creditors liability was outstanding for more than three years, Assessing Officer was not justified in his view
Deemed export to be treated at par with physical export for purposes of Rule 5 of CCR
Cenvat Credit : Deemed exports are to be treated at par with physical exports for purpose of rule 5 of CENVAT Credit Rules, 2004 and, accordingly, assessee is eligible for refund thereunder in respect of deemed exports
RBI puts curbs on intra-group transactions by banks; releases guidelines for the purpose
Banking : Guidelines on Management of Intra-Group Transactions and Exposures
Tribunal to consider notional tax effect as well while admitting revenue's appeal, rules HC
IT : While considering amount of tax effect for purpose of preferring appeal by revenue, Tribunal is required to consider notional tax effect as well
CESTAT directs Central Registry to update records within 24 hrs in case change of address of advocat
GST : Names of Advocates/Consultants not Appearing in Cause List of Certain Cases – CESTAT Data to be Updated Within 24 Hours
SEBI advises brokers not to depend on single software vendors to avoid trading disruptions
SEBI : Safeguards to Avoid Trading Disruption in Case of Failure Of Software Vendor
U.K. Sinha’s term extended by two more years as SEBI’s Chief
SEBI : Section 4 of The SEBI Act, 1992, Read with Rule 3 of The SEBI (Terms and Conditions of Service of Chairman and Members) Rules, 1992 - Management of The Board – Extension of Appointment of SEBI Chairman W.E.F. 18-2-2014
New Form for FDI details; RBI mandates mention of foreign residence and Greenfield or brownfield inv
FEMA/ILT : Foreign Direct Investment – Reporting Under FDI Scheme: Amendments in Form FC-GPR
CAT’s clean chit to YRF; its tie-up with single screen owners to exhibit ‘Jab Tak Hai Jan’ was not a
CL : Conditions put by opponents, film producers, on single screen theatre at time of release of one of their film that if they wanted to exhibit that film, they would have to simultaneously agree to exhibit their other film at time of Diwali did not violate provisions of section 3(4) of Competition Act, 2002
No business profits arose from frequent share dealings if resultant profits were taxed as capital ga
IT: Where income from similar transactions of sale and purchase of shares had been accepted as short-term capital gain in earlier as well as in subsequent years, such gain could not be assessed as business income for relevant assessment year
ITAT affirms concealment penalty as assessee surrendered income after detection of sham transaction
IT : Where Assessing Officer had conducted enquiries into matter of sale of shares prior to surrender made by assessee and duly established on record that said share transactions were sham and bogus, he was justified in levying penalty under section 271(1)(c) in respect of addition made for those transactions
HC rejects observations to Tax Board as assessee failed to show contract giving rise to such finding
CST & VAT : When contract/scheme relied upon by Tax Board is not produced by assessee before High Court, then, inspite of fact that Tax Board is final fact finding authority, High Court cannot blindly follow observation of Tax Board, since same had been serious challenged by VAT Department; matter was remitted back accordingly
Investment of sales consideration provides sec. 54F relief even if construction isn't completed with
IT: Where consideration received on transfer of property had been invested by assessee in construction of residential house, merely because construction was not complete in all respects within stipulated period, benefit of section 54F, should not be rejected
Sec. 14A disallowances must be as per set method even if assessee says that no sum is incurred on ex
IT : Disallowance as per section 14A(2) is required to be made, even if assessee claims that it did not incur any expenditure in earning dividend income
HC admits winding up petition as co. was commercially insolvent and it failed to pay its debts
CL: Winding up order of respondent-company was passed on its inability to pay debt though reasonable time was afforded to it to repay same
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