IT : If assessee sells business as a going concern, consideration cannot be regarded as non-compete fee; same would be capital receipt
Monday, 3 March 2014
Estimation of profit is a question of fact which can’t be interfered with by the High Court
IT : Review of order estimating net profit is not maintainable being a mere question of fact
Condition as to registration and testing of electronic goods with BIS prior to their imports is cons
Excise & Customs : Electronics and Information Technology Goods (Requirement for Compulsory Registration) Order, 2012 providing for registration and testing of electronics/IT-goods with Bureau of Indian Standards (BIS) prior to their import is constitutional
Charitable trust can’t avail Sec. 24(a) relief
IT : In case of assessee, a charitable trust, claiming exemption under section 11(1)(a), it is only expenditure actually incurred to earn rental income, i.e., repairs, municipal taxes etc. which has to be allowed as deduction, however, assessee's claim for standard deduction under section 24(a) cannot be allowed
Polishing of machine castings to be deemed as manufacture for purpose of sec. 10B relief
IT: Where assessee having purchased machine castings from outside parties, polished them and thereupon sold same in market, in view of fact that in said process a new product came out, activity carried out by assessee was to be regarded as manufacturing activity
Period of holding of a flat reckoned from date of allotment letter as such letter extinguished all r
IT : Period of holding of a flat reckoned from date of allotment letter as such letter extinguished all rights of seller
CCI approves of ‘Jet-Etihad’ deal as it would have marginal impact on changing their market share
CL : Where pursuant to combination in respect of acquisition of equity shares of Jet by Etihad Airways change in market share was marginal for combined entity, proposed combination was not likely to have appreciable adverse effect on competition in India and, therefore, same was to be approved
No Cenvat credit on damaged inputs lying in stock fully backed by insurance cover
Cenvat Credit : Where inputs lying in godown had been damaged by rain and assessee had received insurance compensation thereagainst, credit taken on said inputs was reversible along with interest and penalty for suppression of said facts
No hypothetical TP adjustment to be made when correct amount can be ascertained
IT/ILT : Once correct amount can be ascertained, then there is no requirement of drawing any hypothetical inference for making any huge adjustment/addition
Bir Stainless Steel World Mirror February 2014
The following article is based on the latest Stainless Steel & Special Alloys World Mirror produced by the BIR world recycling organisation for the benefit of its members.
Global demand for stainless steel climbed more than 4.5% last year and is expected to record approximately the same increase in 2014. However, 2013 has been dubbed 'a very challenging year' for the stainless steel industry in which some 'significant casualties' were seen. Talk of expansion was largely drowned out by the need for contraction and cost-cutting.
China produced more than half of the world's stainless steel in 2013 and yet imported little scrap, opting instead to source its nickel units via nickel pig iron. Elsewhere in Asia, currency fluctuations have provided relative stability in US dollar pricing for stainless steel scrap. Stainless steel plants in Taiwan and South Korea have focused their buying activity on local scrap, thus underpinning domestic prices; in the former of these two countries, stainless steel output jumped 25% from the third to the fourth quarters of last year.
In India, meanwhile, scrap purchasers have been concentrating principally on nearby spot material at a time when domestic stainless steel producers have suffered the adverse effects of more halting economic growth, a slowdown in infrastructure projects, political uncertainty and weaker export markets.
Despite a duty reduction in accordance with World Trade Organization membership, scrap suppliers in Russia have opted to sell large tonnages on the domestic market and are likely to retain this preference so long as international prices continue to trail those prevailing within Russia - despite frequent payment delays for scrap delivered to home producers. Meanwhile, Kazakhstan has introduced a three-month ban on scrap exports to all destinations, including Russia.
In the Middle East, yards are holding on to their scrap stocks in expectation of an improvement in the nickel price. Meanwhile, the decision to award Expo 2020 to Dubai is expected to trigger a surge in demand for the 430, 304 and 316 grades of stainless steel.
Across in the USA, difficult winter weather conditions has had a deep impact on the stainless steel scrap market in the early part of the year by hampering rail, barge and truck flows to and from processors. This widespread disruption coincides with an improving business outlook for US stainless mills, although conditions are still 'far from robust'. Mills are not struggling to source the scrap they need and so have been able to maintain relatively low inventories.
The stainless steel market in Europe is still dogged by overcapacity, low prices for finished products and an absence of margin. Pressure on raw material prices is therefore expected to remain intense throughout this year.
The closure of the Krefeld works coupled with the decline in austenitic production at Bochum has led to an excess of available scrap in Germany and overcapacity at scrap yards, prompting one expert to describe the country as practically the scrap procurement 'basin' for the whole of Europe.
Meanwhile, ThyssenKrupp's decision to return to the stainless steel sector by re-acquiring AST's property has led to forecasts of good domestic demand for scrap in Italy over the next few months. With arisings generally lower than the average, dealers have been declining to sell their scrap at current price levels.
In the UK, scrap flows are reported to be reasonable relative to market demand, although demolition activity is more muted than normal. In 2013, domestic stainless steel production failed to reach predicted levels and ended up roughly equivalent to the 2012 figure; the forecast for 2014 is currently for another repeat performance.
Source:- recyclinginternational.com
HC admits belated appeal of revenue against registration allowed by ITAT as it involved public inter
IT: Where revenue filed an appeal against order granting registration under section 12A after expiry of prescribed time period, in view of fact that issue in dispute involved public interest, application seeking condonation of delay was to be allowed and matter was to be remanded back for disposal afresh on merits
Polishing of machine castings to be deemed as manufacture for purpose of sec. 108 relief
IT: Where assessee having purchased machine castings from outside parties, polished them and thereupon sold same in market, in view of fact that in said process a new product came out, activity carried out by assessee was to be regarded as manufacturing activity
Reliance Industries Can’T Be Blamed For Dip In Output From Kg-D6 Block Bp
BP does not expect any company to drill in Indian deep-sea basins at the current gas price, and endorses Reliance Industries' view that it neither hoarded gas, nor can it be blamed for the sharp decline in natural gas output from the KG-D6 block.
Sashi Mukundan, who heads BP's Indian operations, remains upbeat about the global major's multi-billion investment in Reliance Industries' oil and gas blocks even though the Mukesh Ambani-controlled company has faced various regulatory hurdles and in the recent past has had to deal with relentless public attacks from Arvind Kejriwal's Aam Aadmi Party.
During his brief stint as the chief minister of Delhi, Kejriwal had ordered the state's anticorruption bureau to file an FIR against Ambani.
BP plans to invest $10 billion in the next five years and wants a trusting relationship with authorities. "We need to move things forward. We have to find a solution and move on. We must work under an umbrella of trust, like we are on the same side and not adversaries," Mukundan told ET.
Reliance Industries can’t be blamed for dip in output from KG-D6 block: BP
The spate of troubles for KG-D6 has not led to second thoughts, said Mukundan. "No. We are looking at India in the long-term perspective. In India, things take time but they are finally done," he said. Mukundan said the current price of gas makes investment in challenging, high-risk deepwater regions unviable.
This would hinder gas output and encourage import of costly liquefied natural gas, Mukundan said. "No company would invest in deep water at the current price level. If gas is not produced, then LNG imports will rise. Already 30% of India's gas demand is met from LNG. For BP, it doesn't really matter whether we sell gas from deepwater in India or bring gas from some other part of the world as LNG. The country has to take a decision," he said. BP feels Reliance's response to the barrage of allegations against the company is backed by technical and geological data as well as global experiences in producing oil and gas from deepsea fields.
RILBSE 0.53 % has been blamed and penalised by the government for the sharp fall in gas production from KG-D6 and is being made to wait nervously for the final go-ahead to charge higher gas prices next month and is facing a regular barrage of attacks.
Commenting on the decline in output, Mukundan said it is not fair to blame RIL for the fall in production because across the world, estimated output stipulated in the field-development plan (FDP) often turns out to be different from the actual outcome.
Asked if the production-sharing contract (PSC) envisaged estimated production as an enforceable commitment, as interpreted by the former oil minister Jaipal Reddy and India's oil and gas regulator, Mukundan said he disagreed with this reading. "The answer is no. There's nothing in the PSC that says field development plan is a commitment. Show me one place where it says actual production should be equal to field-development plan. (But) the good news is that there are cases where actual production may be even better than the FDP."
RIL is waiting for the oil ministry to finalise the mechanism for bank guarantees it has to furnish to be eligible to charge the new gas price of around $8.40 from April 1. It has to furnish guarantees that will be encashed if it is proven that the company hoarded gas, or deliberately suppressed output as the Director General of Hydrocarbons suspects.
Source:- economictimes.indiatimes.com
India's Jan-Feb Coffee Exports Up 15% On Firm Global Prices
The country's total coffee exports rose over 15% to 62,956 tonnes during the January-February period of this year on firm global prices, according to the Coffee Board.
Coffee shipments from India -- the world's fifth biggest exporter -- stood at 54,679 tonnes in the corresponding period of last year.
"Coffee exports have risen on account of improved price trend in the international market," a senior Coffee Board official told PTI.
In value terms also, coffee exports increased to Rs 937.13 crore in the first two months of this year, against Rs 824.35 crore in the year-ago period.
Maximum exports were to Italy (17,205 tonnes), followed by Germany (7,513 tonnes), Belgium (3,709 tonnes), Jordan (3,189 tonnes), Turkey (3,053 tonnes) and Russia (2,576 tonnes) in the same period, as per the Board's latest data.
According to experts, global coffee prices rose to the highest level in February, fuelled by fears over falling production in top producer Brazil.
On February 20, Arabica jumped to 177.50 US cents per pound, the highest level since October 2012 while Robusta touched a ten-month peak of $2,019, they added.
Of total coffee exports from India, the shipments of Arabica rose by 35.11% to 19,856 tonnes from 14,696 tonnes in the year-ago period, while Robusta exports improved marginally by 7.2% to 27,382 tonnes from 25,542 tonnes.
Instant coffee shipments more than doubled to 10,902 tonnes during the January-February period of 2014, from 3,918 tonnes in the year-ago period, the data showed.
However, re-exports declined to 4,754 tonnes from 10,495 tonnes in the corresponding period.
Top five exporters were Amalgamated Bean Coffee Trading Company Ltd, CCL Products India Ltd, Allanasons, ITC and Olam Agro India during the January-February period of this year.
The board has pegged the total output at 3,11,500 tonnes for 2013-14 crop year (October-September), down by 2.1% from 3,18,200 tonnes produced in 2012-13.
Source:- business-standard.com
Government Tightens Checks To Curb Gold Smuggling
Government agencies have started to make physical checks of gold stocks held by wholesalers to ensure inventories match the amount imported by banks and state-run traders, an industry association said, as the country steps up efforts to halt smuggling.
The move could aggravate shortages in the physical market as authorities seize gold without a valid provenance, boosting premiums, which rallied to a record of $160 an ounce on London prices late last year.
"Government agencies are raiding and seizing gold at various places and asking to reconcile the (gold bar) number with the imported gold," said India Bullion and Jewellers Association (IBJA) general secretary Surendra Mehta.
Gold was being seized if numbers do not match up, said Mr Mehta, whose 1,200 bullion dealers and jewellery retailers plan to close their shops on March 10 in protest at the spot checks and import curbs.
Officials from India's Customs department were not immediately available to comment.To tackle a widening trade deficit, India - the world's second-biggest gold consumer behind China - has put in place measures to dissuade gold buying, including a 10 per cent import tax.
Imports have fallen sharply, leading to shortages and triggering smuggling. India imported about 750 tonnes of gold in 2013, while up to another 200 tonnes was believed to have been smuggled into the country, according to the World Gold Council.
The bulk of official imports are channelled through either state-owned or private foreign banks and government-backed trading companies, which in turn sell the metal to local jewellery makers.
Mr Mehta said legally imported gold bought by retailers from middlemen was being caught up in the checks."My 125 kilograms (4,400 ounces) of gold has been stuck at Ahmedabad airport unnecessarily for a month now," Prithviraj Kothari, owner of Riddhisiddhi Bullions Ltd, a leading jeweller, told Reuters.
Customs officials have said only a fraction of illegal shipments have come to light.India's finance ministry and the central bank have acknowledged that smuggling has increased considerably but have said they would not ease the import restrictions until they have a better grip on the trade deficit.
Source:- profit.ndtv.com
India To Curb Palm Imports As Spread With Soyoil Narrows -Traders
India's palm oil imports are set to drop 6 percent in the year to October 2014, with buyers opting for rival soybean oil as the price spread between the two narrows, traders said on Monday.
Lower overseas purchases by the world's top importer of vegetable oils could cap benchmark palm prices that jumped to a 17-month high earlier in the day, adding to February's gains - the biggest monthly rise since October 2013.
Crude palm oil is being offered at $940 to $945 a tonne, including cost, insurance and freight (CIF), in India, at par with the price of degummed soybean oil, traders said on the sidelines of an industry conference in Kuala Lumpur.
Palm oil usually trades at a discount of $100 to $150 a tonne to soybean oil but last month's almost 10 percent rally in Malaysian futures - currently trading below the day's peak of 2,860 ringgit ($870) per tonne - has tightened the spread.
"There has been dryness in Indonesia and Malaysia which is fuelling the rally in palm oil prices," said Sandeep Bajoria, chief executive of Mumbai-based brokerage Sunvin Group.
"India will be importing less palm oil this year."
India's palm oil imports are likely to drop to 7.8 million tonnes in 2013/14, from 8.3 million tonnes a year ago, traders told Reuters at the conference.
The country's overall edible oil purchases this year are forecast to climb almost 9 percent to 11.3 million tonnes from 10.4 million tonnes a year ago, traders said.
"If you look at the demand, we are growing by about 3-4 percent every year, plus we are adding about 20 million people," said B.V. Mehta, executive director of Solvent Extractors' Association of India.
A hailstorm that hit several rapeseed-growing districts in India last week could reduce its rapeseed output, increasing the country's dependence on soybean oil imports.
It is too early to estimate the damage caused by adverse weather, but losses could be anywhere between 200,000-700,000 tonnes, traders said.
"It is difficult to judge right now. It will take us a while to assess damage to crops ... we will only know after a few days," said Govindbhai Patel, a veteran trader from India's western city of Rajkot.
Competitive prices of soft oils such as soyoil and sunflower oil could see India buying more of these commodities. India could bring in 3.5 million tonnes of soft oils, up from 2.1 million tonnes last year, traders said. ($1 = 3.2765 Malaysian ringgit) (Reporting by Naveen Thukral and Anuradha Raghu; Editing by Himani Sarkar)
Source:- in.reuters.com
HC sets aside Tribunal’s order as it was based on various judicial precedents without considering ca
Excise & Customs : Tribunal cannot pass an order merely by placing reliance upon various precedents without any discussion on merits of case
Declaration of additional income in pursuance of survey calls for concealment penalty, rules HC
IT: Where in pursuance of survey, assessee filed its revised return declaring higher taxable income, since it was undisputed that at time of filing original return assessee was aware of concealment, it was to be concluded that there was no compliance with provisions of section 139(5) and, therefore, revised return being non-est, impugned penalty order passed under section 271(1)(c) did not require any interference
Rupee Loses Most Among Asian Currencies, Weakens To 61.93 Per Dollar
The Indian rupee weakened, losing the most among major Asian currencies in intra-day trading, as the US dollar rallied against the euro after Russia declared war on Ukraine.
Softness in the domestic equity markets also weighed on the local currency.At 2.05pm, rupee was trading at 61.9325 a dollar, down 0.28% from its previous close of 61.7575. The second-biggest loser in Asia was the Korean won, which fell 0.24% against the dollar.
The rupee had strengthened 0.37% on Friday. The domestic currency on Monday opened at 61.955 a dollar and fell to 61.955 in the afternoon trade.
The dollar index, which measures the US currency’s strength against major global currencies, was trading at 79.841, up 0.18% from the previous close of 79.691.
India’s benchmark equity index, S&P BSE Sensex, was trading at 20,946.69 points, down 0.81%.The yield on India’s 10-year benchmark bond was trading at 8.91%, compared with its previous close of 8.86%. Bond yields and prices move in opposite directions.
Source:- livemint.com
CLB order special investigation into co’s records as it failed to explain discrepancies in share tra
CL : There being no answer to defects, discrepancies, inconsistencies and irregularities pointed out in transfer of shares, whereby respondents gained control of respondent company, such transfer called for specific investigation into records of company
Seized project report showing estimated figures won't prove undisclosed investment; HC deleted addit
IT : Project report shows estimated figures; it does not itself prove that undisclosed investment was made by assessee
Internal comparable to be preferred over external one except if transactions between AE and non- AEs
IT/ILT: In course of determining ALP, preference should be given to internal uncontrolled comparables over external uncontrolled comparables, however, if nature of transaction with AE is different from that with non-AE or data in respect of two segments is either not workable or not reliable, then assistance from such internally comparable uncontrolled transactions should be avoided
Set-off from purchase tax couldn’t be denied merely if assessee was exempted from payment of entry t
CST & VAT : Exemption/Set-off from purchase tax granted under Sales Tax Act cannot be decreased/denied merely because assessee is exempted from Entry Tax under Entry Tax Act or entry tax has been paid at lower rate
Partner shall not be shifted into shoes of sub-contractor if contract awarded to firm is shared by i
IT : Where assessee-firm was formed by two partners for purpose of carrying business of works contract and it got contracts from various Governments and distributed work among two partners and executed work, assessee-firm could not be considered as contractor and its partners as sub contractors of firm to cast liability under section 194C(2) on it
HC admits winding-up petition against developer on its failure to refund booking amount of flat
CL: Where booking amount had been paid by petitioner for purchase of residential flat, which respondent was not in a position to deliver, withholding of said payment by respondent was not justified and on failure of respondent-company to pay said amount along with interest, winding up petition would stand to be admitted
Internal comparable to be preferred over external one except when transactions between AE and non -
IT/ILT: In course of determining ALP, preference should be given to internal uncontrolled comparables over external uncontrolled comparables, however, if nature of transaction with AE is different from that with non-AE or data in respect of two segments is either not workable or not reliable, then assistance from such internally comparable uncontrolled transactions should be avoided
No review due to non-consideration of plea of financial hardship if this ground was not raised in ap
Excise & Customs : Where plea of financial hardship was neither taken before Tribunal nor before High Court and not even argued before High Court, as reflected by memo of appeal and order of High Court, assessee could not seek review of order of High Court on ground of non-consideration of financial hardship
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