IT : Where it was apparent from material on record that lenders had granted loan to assessee through account payee cheques and they had got sufficient balance in their account before issuing those cheques, loan amount could not be added to assesse's taxable income under section 68 merely on ground that lenders were engaged in providing accommodation entries also
Sunday 16 February 2014
Sale of inherited agricultural land after converting it into plots would be taxable as capital gains
IT: Capital gain arises on sale of plots if assessee had no intention to carry on real estate business
Even PSUs to comply with pre-deposit requirement; HC order pre-deposit by Hindustan Petroleum
Central Excise : Provisions of section 35F are equally applicable to statutory authority and government departments, because when legislation has not made any distinction, courts cannot make such distinction by judicial order
Even if Ginni isn’t jewellery yet if taken as jewellery by revenue in seizure it can’t later on hold
IT : Where assessee's explanation that jewellery found at time of search belonged to his mother and wife had been accepted by revenue authorities, even though gold sovereigns (ginnis) might not be an item of jewellery, still assessee's explanation would apply to those sovereigns as well and, thus, addition in respect of same was to be deleted
Market Is Not Looking At Budget 2014 But Next Government For Gains
The Finance Minister P Chidambaram will present the interim budget for 2014-15 today. The markets have a fair idea of what is to be expected in the budget. Economic growth at 4.9% for fiscal 2013-14, fiscal deficit at 4.65% of GDP and current account deficit at below 3% of GDP. The interim budget by itself will not cause any movements in markets.
The question is, what will the markets do post the budget leading into the 2014 general elections. The widespread belief amongst market participants is that India will see the NDA led by the BJP come into power this year and there is a lot of hope that the new government will take the economy out of the woods. It is a different matter that it's going to take a lot to get the economy out of the woods going by the performance of the economy in fiscal 2013-14. However markets like to live on hope and as that hope gains ground, there will be a tendency to buy into that hope.
The Sensex and Nifty could go back to record highs on expectations of NDA led government at the center while bond yields are likely to stay ranged given worries of borrowing for next year and fiscal year end liquidity conditions. AFP
The Sensex and Nifty are trading at levels of 20,500 and 6070 respectively, having come off by 2% to 3% from highs seen in January 2014. Ten year benchmark government bond yields are trading at levels of 8.82%, up 30bps from lows seen in January 2014. The Rupee is up by about 1.5% from lows against the USD since end January 2014. The Sensex and Nifty could go back to record highs on expectations of NDA led government at the center while bond yields are likely to stay ranged given worries of borrowing for next year and fiscal year end liquidity conditions. The Rupee is likely to strengthen given fall in current account .
The CSO (Central Statistical Office) estimates that the Indian economy will grow by 5.2% in the second half of fiscal 2013-14. The economy has grown by 4.6% in the first half and full year 2013-14 growth estimate is 4.9%. GDP growth for the first two quarters of fiscal 2013-14 was 4.4% and 4.8%. GDP growth for fiscal 2012-13 was 4.5%.
CSO estimates that Agriculture and Allied Activities that has a 14% weight in total GDP will lead GDP growth. This segment is expected to grow at 4.6% for full year 2013-14 against a growth rate of 1.4% seen in 2012-13. Apart from Agriculture and Allied Activities, the Financing, Real Estate, Insurance and Business Services segment that has a weight of 19% in total GDP, with a growth of 11.2% for 2013-14 against a growth of 10.9% in 2012-13, will contribute to the GDP growth of 4.9% expected for fiscal 2013-14.
Manufacturing with a 14.6% weight in GDP is expected to contract in 2013-14 while Trade, Hotels, Transport and Communication with a 27% weight in GDP is expected to grow at 3.5% in 2013-14 against 5.1% growth seen in 2012-13.
It is possible for agriculture to push up growth for the second half of 2013-14 given good monsoons. Foodgrains production is expected to grow at 2.3% in 2013-14 as compared to a decline of 0.8% seen in 2012-13. However agriculture in India is monsoon dependent and an agriculture led GDP growth is subject to high volatility.
The first nine months of fiscal 2013-14 did not showing any promise for the economy. Passenger vehicle sales were down 5.7% while commercial vehicle sales were down 18.4% in the April-December 2013 period on a year on year basis. January 2014 saw passenger vehicle and commercial vehicle sales down 7% and 21% respectively year on year.
The IIP (Index of Industrial Production) growth for the April-December 2013 period was a negative 0.1% while the manufacturing growth was a negative 0.6%. Consumer durables have shown a negative growth of 12.9% indication weakness in consumer demand.
Tax collection growth for the April-December 2013 period is below budgeted levels with direct tax collections growing at 12.5% against budgeted growth rate of 17.5% and indirect taxes growing at 6.2% against budgeted growth rate of 20.3%. Slowing economy has hit tax collections. The government is forced to cut plan expenditure by 20% to keep fiscal deficit within budgeted levels of 4.8% of GDP and this cut in plan expenditure will lead to further pressure on economic growth.
Trade deficit is the only bright spot on the horizon with deficit down 27% in the April-January 2014 period. Fall in gold and silver imports by 38% in this period has helped bring down trade deficit. Lower trade deficit is helping pull down current account deficit by 40% for fiscal 2013-14.
CPI (Consumer Price Index) inflation for the month of January 2014 printed at 8.79%, the first below 9% print over the last one year. Falling prices of vegetables has lowered CPI. RBI is unlikely to ease its policy stance despite CPI coming off from highs of 11.24% seen in November 2013 as it is focused on lowering long term inflation expectations.
Source:- firstpost.com
The ‘Silent Epidemic’ Of Chemical Toxins Hurting Our Children Add To ...
Two of the world’s top toxicology experts are calling on governments around the globe to crack down hard on the widespread use of industrial chemicals which they say are hurting the development of children’s brains.
“Countries need to transform their chemical risk-assessment procedures in order to protect children from everyday toxins that may be causing a global ‘silent epidemic’ of brain development disorders,” says a new study published Friday in the medical journal The Lancet Neurology.
The report’s authors, Dr. Philippe Grandjean, a professor at the Harvard School of Public Health in Boston, and Dr. Philip Landrigan, of Mount Sinai School of Medicine in New York, say the number of recognized chemical causes of neurodevelopmental disorders, such as autism, attention deficit disorder, dyslexia and cerebral palsy, has doubled from six to 12 in the past seven years. During the same time period, they say the list of unregulated chemicals found in everyday items such as toys, furniture and clothing, and known to damage the human brain, has expanded from 202 to 214.
In a phone interview from Copenhagen late last week, Grandjean said the European Union has been proactive in banning and regulating certain chemicals that are known to harm children’s and adults’ health, but that the United States and Canada lag far behind. “Until manufacturers are legally required to prove that all existing and new industrial chemicals are non-toxic before hitting the marketplace – similar to the EU’s reformed chemical law REACH – we are facing a pandemic of neurodevelopmental toxicity,” warns Grandjean, who adds that children’s brains are often impacted in the womb by toxins that pregnant mothers are exposed to. (REACH stands for Registration, Evaluation, Authorization and Restriction of Chemicals.)
Maggie MacDonald, toxic program manager at Toronto-based Environmental Defence, says the study is particularly troubling because of:: “How prevalent these chemicals are in our environment, our homes and our bodies. Babies are being exposed to pollutants before they are even born,” says MacDonald, whose organization did a recent study testing umbilical-cord blood of newborns and found lead, methylmercury, pesticides, PCBs and PFCs (chemicals found in non-stick coatings), among other toxins. “This is a very serious problem that needs to be dealt with urgently, for the sake of children everywhere.”
Dr. Barry Blakley, a toxicology professor at the University of Saskatchewan, agrees that industrial chemicals’ effects on the brain need to be regulated in a far more stringent way. “The fetus is uniquely susceptible to developmental disorders … that can lead to immune and behavioural disorders, as well as reproductive dysfunction later in life,” Blakley said. “Often the effects are associated with low-level chemical exposure during pregnancy.”
The study says governments could save billions of dollars by getting tough on chemical testing and regulation. Grandjean says in the United States alone, childhood lead poisoning costs an estimated $50-billion (U.S.) a year, while methylmercury toxicity alone costs $5-billion. He suspects those figures are only the tip of the iceberg. “The vast majority of the more than 80,000 industrial chemicals in widespread use in the U.S. have never been tested for their toxic effects on the developing fetus or child. The real impact on children’s health is just beginning to be uncovered,” says the report.
The authors want to see an international regulatory agency established to co-ordinate, and push for, new measures that would require chemical producers (just like pharmaceuticals) to prove that their products are low-risk. “Our big concern is that children worldwide are being exposed to toxins that harm their intelligence, cause disruptive behaviour and hurt society at large,” says Grandjean, who has studied toxicology with Landrigan for more than 30 years.
Source:- theglobeandmail.com
Jaggery Cake Hogs Limelight At National Sugar Fest
The second day of the National Sugar Fest currently underway on the campus of Indian Institute of Sugarcane Research witnessed jaggery in different forms. From jaggery cubes and candies to puddings, a major portion of Sunday was devoted to jaggery - one of key ingredients of the Indian kitchens.
The highlight of the day was launching of cake made using jaggery by a Brazilian and Chinese participant at the meet. Giving further information about the day's development, senior scientist AK Sah, said, "An exhibition showcasing the value added products from jaggery was organised at the jaggery unit of the Institute. A cake made using jaggery was launched, which was cut by Dr Raeffelo from Brazil and Yang RuiLi from China.
All the products like jaggery cube, candy, pudding etc. were displayed in the exhibition." Jaggery incharge SI Anwar explained the process of jaggery manufacturing and innovative food products made from jaggery to the visiting delegates.
Apart from this, many colourful programmes like cane chewing, rangoli, kite flying, run for health, extempore, open quiz were organised. About 30 ladies (girls and house wives) participated in the rangoli competition and all of them made beautiful rangoli based on theme of sugar crops. About 50 participants enjoyed the sweet taste of cane chewing and tried their best to win the prize by chewing as many numbers of cane sets within the stipulated time. As many as 125 children participated in run for health competition.Foundation day of IISR was also organised on Sunday in which more than 400 farmers visited the institute and saw the technologies displayed by different agricultural agencies and research Institutes like IISR, CISH, NBFGR, KVKs, etc.
Sivajirao Deshmukh, director general, VSI, Pune delivered the foundation day lecture on 'Indian Sugar Industry: R&D priorities for 21st century'. Dr N Gopalkrishanan, ADG, ICAR, New Delhi on this occasion congratulated IISR director and scientists for their achievements during last 62 years.
The three-day long National SugarFest-2014 and International Conclave on Sugar Crops were inaugurated by SK Dutta, DDG (Crop Sciences), ICAR, New Delhi. The spectacular beginning with presentation by ladies staff of the institute set the humorous tone of international conclave and sugar fest. Welcoming the chief guest and delegates, Dr S Solomon, director, IISR remarked that sugar mills must be essentially converted into sugarcane processing complex to produce sugar, ethanol, baggase, electric-cogeneration (green energy), bio-fertiliser, bio-plastics etc.
There is a need to intensify research efforts for technological advancement in the areas of green energy production from sugar crops like sugarcane, sugarbeet, palm, sweet corn etc. Solomon said that this conclave will provide networking opportunity to researchers, processors, industrialists, entrepreneurs, growers and other stakeholders for green energy production.
Chief guest Dr SK Dutta remarked that India and Brazil jointly contribute more that 60% of the world sugarcane and sugar production. During last few decades Brazil has emerged as number one country in ethanol and bio-energy sources. India can utilize Brazilian experiences and technology for harnessing the un-tapped bio-energy potential of sugar crops specially sugarcane. The varietal development programme must utilise new tool of researches for developing cane varieties having high amount of bio-mass and sugar.
In India, public and private sector should work together for popularisation of sugarbeet cultivation and its processing. Raffaella Rossetto, scientist from Brazil presented Brazilian programme of Ethanol production. She said that 40% energy requirement of Brazil comes from renewable sources and sugarcane contributes 19%.In 1925 first car was introduced in Brazil which runs on ethanol and gasoline. In 2012 about 80% or more cars in Brazil runs on blended petrol with 40% ethanol. Brazil is planning to introduce world's first transgenic cane variety to enhance cane productivity by 25% with added advantage of borers and drought tolerant.
Presently, Brazil is producing 25 billion litres of ethanol and exporting about 3.5 billion litres.In the international conclave 24 foreign delegates from Brazil, Australia, Spain, Vietnam, Sri Lanka, Uganda and about 150 Indian delegates are participating.IISR is also disseminating information on sugarcane production and processing technologies through exhibitions, business meets, topical lectures and demonstrations. Out of rainbow activities planned for sugar fest, school band in full uniform, fancy dress for kids, balloon blowing, flower arrangement and mehndi for ladies was organised today in which children, students and ladies participated with all enthusiasm despite continuous light shower.
Source: -timesofindia.indiatimes.com
No sequencing of gold imports for EOUs and star trading houses if advance authorization issued befor
FEMA/ILT : Clarifications on Import of Gold/Gold Dore by Nominated Banks/Agencies/Entities
Hopes, And Homes, Crumbling On Tea Plantations
For a century and a half, Madhu Munda’s forebears toiled on the same tea plantation that she lives and works on now. Belonging to central Indian tribes brought to Assam by the British in the mid-19th century, they and millions of other plantation workers survived as little more than indentured servants, even as the British Raj gave way to Indian democracy.
So when Amalgamated Plantations took over the plantation in 2008, Ms. Munda and her fellow workers had high hopes for change. The company’s investors said they planned to transform this sprawling tea estate into a model for sustainable and responsible labour policy through an employee shareholding programme. The International Finance Corporation (IFC), a branch of the World Bank partly funded by the U.S. government, lent the new company legitimacy with a sizable investment. In approving funding, the IFC stated that Amalgamated promised to “create opportunities for people to escape poverty and improve their lives.”
But that early optimism has evaporated. Despite pledges of better working and living conditions, Ms. Munda, 45, finds herself living a life not dissimilar to that of her grandparents. Her family shares a cramped and crumbling house with three other families. The well outside is filled with murky water, and a nearby latrine is rank and overflowing. Ms. Munda says she has been emptying a bucket filled with the water that leaks through her roof for 15 monsoon seasons.
In interviews at two of the company’s plantations, workers said their overseers treated them harshly and denied them basic benefits. Ms. Munda said that to qualify for a paid sick day, workers had to report to the plantation clinic three times a day to prove their illness. Raju Mantra, the son of two plantation workers, said that protective equipment was withheld from workers.
“When big people come to visit, they give it to us,” he said of equipment such as gloves and masks to protect from pesticides, “but then they put it back in storage, saying that if we wear it every day, it will wear out.”
On Monday last, the Human Rights Institute at Columbia Law School released a 110-page report on Amalgamated’s operations, which employ more than 30,000 people on 24 plantations in Assam and West Bengal.
The report paints a grim portrait of life on the tea plantation: dilapidated and crowded housing, hazardous water and sanitation conditions, the denial of basic benefits such as health care for workers’ dependents, widespread disregard for occupational safety measures, and pitifully low wages.
Amalgamated denies any wrongdoing. The company claims it was not given enough time to fully review the Columbia report before its release. But it issued a statement saying that the report was “incorrect and misleading in some parts,” and said that some issues such as wages, were dictated by an industry-wide recession that necessitated conservative spending.
Amalgamated’s oceanic plantations of undulating green tea bushes employ thousands of workers each. The plantations used to be owned by the Tata group, that, along with the IFC, created Amalgamated during a restructuring process in the late 2000s. Now, Amalgamated provides tea leaves primarily to Tata Global Beverages, whose Tetley and other brands of tea are widely consumed across the world.
On Tuesday, the IFC’s internal compliance and accountability office announced that it would be conducting a full investigation into the “I.F.C.'s environmental and social performance in relation to its investment in A.P.P.L.,” the abbreviation for Amalga- mated.
In an email response to questions, Amalgamated’s spokesman said the allegations made by workers on the company’s plantations were untrue. The company said it adhered strictly to the Plantations Labour Act, a law that requires plantation owners to supplement wages, which can be set below State minimums, by providing tea workers with housing, schools, health care and other basic needs.
Tea worker’s rights groups say the Plantations Labour Act has perpetuated the feudal system created by British companies when they first developed the plantations. Today’s plantation workers descend almost exclusively from tribal populations transplanted in the colonial era, having inherited jobs from their parents.
The poverty that besieges tribal populations throughout India more harshly circumscribes mobility for those on Assam’s plantations. Many here said they would like to continue going to school or seek care at hospitals outside their plantations, but transportation is too costly for those who earn so little. Plantation workers like Ms. Munda can make Rs.89 ($1.43) a day picking tea leaves or performing other tasks, provided they meet their productivity quotas.
Mr. Mantra said that to get by, most tea workers ate simple meals of rice sprinkled with salt most days, splurging for eggs or fish only on paydays.
Source:- thehindu.com
Assessee need not to avoid other businesses to avail of exemption on compulsory acquisition of agric
IT : Merely because assessee was staying away from agricultural land or was pursuing some other business would not be sufficient to hold that land was not used for agricultural purposes, thus, exemption claimed by assessee under section 10(37) on enhanced compensation received on compulsory acquisition of agricultural land could not be denied
RBI seeks to entice long term foreign investors, cuts limit for investment in commercial papers
FEMA/ILT : Foreign Investment in India by SEBI Registered FII, QFI and Long Term Investors in Corporate Debt
Wheat Markets Mostly Higher
Wheat markets were mostly higher with spring wheat in Minneapolis leading the way. Extreme cold temps and snow are hampering grain movement, particularly across the Northern Plains and Canadian Prairies, where spring wheat is grown.
Kansas City also found support on continued concerns about winter kill this year after several cold snaps on poorly covered wheat plants. Chicago struggled to hold its gains, finding some spillover pressure from the corn market.
Corn appears to be stalling after a one-month rally as farmers have been active sellers on this run. Soybeans were slightly higher after a week of choppy trading in which the market saw small cancellations from China but was bracing for more. Brazil’s harvest is well underway for what is projected to be a record harvest that will compete heavily against the United States.
Beans remain well supported, however, by huge demand for soymeal. The lingering cold temperatures are increasing the demand for livestock feed, and meal is the primary feed for hogs and poultry.
The cattle market is rebounding after a few weeks of retreating from their all-time highs. Cash fed prices continued to weaken last week, however, as consumer demand stayed weak in the face of record high beef prices and quickly declining disposable income after paying high heating bills. Packers have cut back kill hours trying to prop up beef prices, but the sluggish demand has continued to weigh on the beef cut-outs. Feeder cattle are seeing strong buying in the country, with most weight classes well bid.
Crude oil pushed higher, but natural gas retreated after its swift move higher of the last week. The lingering cold temps are continuing to support the energy complex. Precious metals have managed to string together a couple weeks of higher prices with silver prices finding solid support at the early winter lows. The Dow surged higher after its early February sharp break, finding strong buying after congress agreed to raise the debt limit without threats of default.
Source:- sidneyherald.com
Gold Price Signals China Credit Bubble Bursting As Investors Seek Safety
China’s “unfolding credit crunch” is having an unforeseen and dramatic impact on gold prices as investors urgently stock up on the precious metal as a form of financial protection against a sharp correction in the world’s second largest economy.
This is the main reason why gold prices have unexpectedly shot up more than 10pc to breach $1,300 (£776) an ounce for the first time since November against the prevailing forecasts for weaker demand made by many industry experts at the beginning of the year, according to Adrian Ash, head of research at gold trading platform BullionVault.com.
Gold traded on the Shanghai Gold Exchange has also reached a three-month high.
Rebounding is part of the reason for the rise, said Ash, adding: “Gold lost 30pc and silver nearly 40pc last year. The world economy will struggle to deliver all the good news priced in by that crash. But China’s unfolding credit-crunch looks central right now.”
Uncertainty is growing over China’s ability to sustain the rapid rates of economic growth it has seen over the past decade amid concern over high-levels of debt among its provincial governments. These concerns have helped to drive sharp falls across emerging markets since the beginning of the year.
Source:- telegraph.co.uk
Rupee Weakens To Above 62 Per Us Dollar
The rupee was trading lower at 62.06 from its close of 61.9250/9350 on Friday ahead of the interim budget presentation due to start at 11 a.m.
Dealers largely expect Finance Minister P. Chidambaram to stick to his fiscal deficit aim of 4.8 per cent . But they will also look at market borrowing numbers for FY15.
"Big expenditure numbers will be negative for the rupee," says a dealer with a state-run bank.
Traders will also watch domestic stock and debt markets for clues on the direction of foreign fund flows.
Most Asian share markets edged higher on Monday in a nod to the resilience of Wall Street, but Japanese stocks struggled with both a stronger yen and a surprisingly weak reading on economic growth.
Source:- profit.ndtv.com
ITAT won't deal with issues not raised before it; ITAT denied to answer question of 'royalty' not ra
IT/ILT: Where Tribunal remanded matter back to Assessing Officer for deciding question of existence or otherwise of PE of assessee in India so as to determine taxability of payment under distribution assessment as 'business profits' since revenue did not raise a ground before Tribunal regarding treatment of payment in question as royalty or FTS, there could have been no point in rendering any decision on said issue and, thus, impugned remand order did not require any rectification
SC: Hospitals working primarily on chargeable basis aren’t charitable, no exemption on building tax
CST & VAT : Application of income derived from a building for charitable purposes does not amount to building being 'principally used' for charitable purpose; therefore, where hospital building was run predominantly on chargeable basis, it could not be regarded as principally used for charitable purpose
HC dismissed oppression plea as petitioner failed to provide substantive evidence against co.
CL : Grievances made by petitioner in petitions under section 397/398 not being supported with any substantive material, his case of oppression and mismanagement in affairs of company was rejected
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