IT: Where assessee-company received dividend on UTI and shares and investment in same was made in earlier years and interest free funds available with assessee were much larger as compared to investment, disallowance of assessee's claim for interest expenditure by applying section 14A was wrong
Tuesday 11 March 2014
HC cuts double-whammy powers of revenue; deletes penalty as assessee withdraw valid relief relying o
IT: Where assessee was, in fact, eligible for deduction, mere conceding to revenue's submission for non-eligibility and payment of tax, would not make assessee liable to penalty
Pre-deposit to be waived if survey is ongoing to grant exemption under sec. 11C of Excise Act
Excise & Customs : Whenever a survey is floated for issuing/examining notification under section 11C of Central Excise Act, pre-deposit must be waived
HC slaps penalty as assessee failed to offer reasonable cause for accepting loan in form of cash
IT: Where reasonable cause for receiving loan or deposit in cash was not proved by assessee, levy of penalty under section 271D was to be upheld
No transfer of case for co-ordinating investigation without giving reasons and personal hearing to a
IT: Commissioner cannot transfer a case from one place to another on ground of co-ordinate investigation without giving notice, personal hearing and assigning reasons
Credit denied as assessee couldn't prove use of input in manufacturing capital goods eventually used
Cenvat Credit : Where assessee had claimed credit on ground that inputs were used in manufacture of capital goods used in factory but had failed to satisfy department in the matter, no credit could be allowed and said claim of wrong credit could attract penalty
Repetitive notice by an opposite party disregarding CLB's restraining order amounts to contempt of C
CL: Notice issued by opposite parties in non-compliance to earlier order passed by CLB restraining them from issuing further notices for removal of director would amount to contempt of Court
No TDS from sum paid to foreign agent for securing order; FA 2010 amendment to sec. 9(1)(vii) not ap
IT/ILT : Where assessee appointed foreign agents for securing export orders, Explanation added to section 9(1)(vii) by Finance Act, 2010 with effect from 1-6-1976 was not applicable in view of fact that agents had their offices situated in foreign country and they did not provide any managerial services to assessee
Speedy Cargo Movement Can Boost Exports
The infrastructural support especially cargo movement by trains and high cost of finance hinder growth of exports of submersible pumps from Pithampur. If these issues are addressed, the industry would record a growth of 12 to 14 percent in coming three years from the current 10 to 12 percent.” These views were expressed by Managing Director of Shakti Pumps ( I) Ltd, Dinesh Patidar, a pioneer of water pumping equipment manufacturer.
He says cargo movement generally takes around 8 days for shipment and this should be reduced by any means. The other challenges on export front are higher cost of finance, supportive tax structure and cost of overseas market development.He expressed confidence that despite all odds they would make steady progress in finding new markets abroad.
Shakti is among the few pioneers in the world produces 100% stainless steel submersible pumps and motors. Today, Shakti is rubbing shoulders with best in the business in the world with its state- of- the art technology and innovation.
Talking about other challenges, Patidar says: ‘ It is very difficult to educate rural customer, who are semi- literate, for a branded product and its features like energy efficiency and performance.
In order to achieve this task, we have hired in brand ambassador like Amitabh Bachchan for promotion of our product, he said.
About potential of water pumping equipment, the MD of BSE- listed Company says: “ While India has huge potential and prospects for pump business, we have technological advantages with high energy efficiency.We are upbeat about future pump business in India while our export business has touched an all time high, this year.
Talking about Indian and MP market, the second generation businessman Patidar says ‘ As you know water technology and water industry have grown tremendously and customers’ preferences are gradually being shifted to branded products.
This has great significance to Indian pump market which has so far been ruled by cheaper local products that consume higher energy. This shifting is a welcome sign. “ We have been on a robust growth path over the years and anticipate great future for pumps in India and overseas.
Our USP is superior quality and energy efficiency with better discharge. Our stainless steel submersible pumps are capable of saving energy up to 40%. Talking about the expansion plan of the company Patidar says ‘ we are foraying into different business verticals like industrial and solar pumps. Our product portfolio largely comprises of full range of agricultural pumps, submersible open well pumps, SRN pumps, Vertical Multistage Pumps, Pressure booster pumps for Industrial and Commercial applications, fire fighting and sewage pumps etc. Newly developed solar pumps are well accepted by customers nationally and internationally.Overall the current pump business prospects in India are quite good.
Patidar Says aall began as a small venture by my late father Shri Manoharlal Patidar- an ordinary man. Seeing a bright future in pump industry, he had invested everything to set up a small factory at Pithampur, near Indore. Later I joined to help him in the venture and realized the great potential of pumps in Indian and export markets and thus synergised all my resources to tap it. In the year 1995, we went to public and got listed at BSE. Referring about Shakti Pumps, Patidar says: ‘ We export our products to 100+ countries. As testimony of this, we had been conferred with best ‘ SEZ Exporter Award’ and 2nd Runner- Up Award for Manufacturer Exporter category in 2012 by Export Credit Guarantee Corporate ( ECGC). Being based in MP, we are proud to be the leader in exports in pump business and one of the major contributors of precious foreign exchange in the country.
Source:- freepressjournal.in
Exports Fall In February, May Miss Annual Target
Merchandise exports fell for the first time in eight months in February, signalling the country may miss its annual overseas sales target for the second straight year, data released on Tuesday showed.
Several months of rising exports have helped India bring down its current account deficit to a manageable level, and despite the weaker data in February, it is likely to beat last fiscal year's total of $300 billion in merchandise exports.
In the first 11 months of the 2013/14 fiscal year that ends on March 31, India's exports were $282.8 billion, up 4.79 percent from the same period a year ago, data released on the trade ministry website showed. But it is unlikely to export enough in March to reach the trade ministry's $325 billion target
"The momentum of export growth has been lost when we were about to reach the final goal-post," said Anupam Shah, chairman of the Engineering Exporters' body, EEPC India. "At this rate, there is no way we can achieve the target of $325 billion in the current fiscal year."
In February, merchandise exports fell 3.67 percent from a year earlier to $25.69 billion, compared with 3.8 percent growth in January.
Analysts say exports, which contribute nearly 16 percent to the gross domestic product, have slowed in part because of a stronger rupee.
The trade deficit, however, continued to fall in February, driven by a decline in the oil import bill and curbs on gold, the country's second-most expensive overseas purchase after oil. Overall imports fell 17.09 percent year-on-year to $33.82 billion, the data showed.
Falling imports will further ease pressure on the country's current account balance.
The current account deficit narrowed to $4.2 billion, or 0.9 percent of gross domestic product in December quarter, from 6.5 percent, or $31.9 billion, a year earlier.The trade deficit for the first 11 months of the fiscal year declined by more than $51 billion from a year ago to $128 billion.
Source:- in.reuters.com
India’S Trade Deficit Narrows To $8.1 Billion; Exports Shrink
Indian exports contracted marginally in February for the first time in seven months, though a steep fall in imports, especially non-oil imports, helped narrow the trade deficit.
According to data released by the commerce ministry on Tuesday, while exports contracted 3.7% to $25.6 billion as against $26.6 billion in the year-ago period, imports were down 17% to $33.8 billion from $40.7 billion.This helped in narrowing the trade deficit by 42% to $8.1 billion.
The government is hoping to control the current account deficit to less than $40 billion this fiscal year, mainly on the back of a sharp reduction in gold imports due to the high customs duty of 10%.In February, while oil imports were down 3% at 13.7 billion, non-oil imports fell 25% to $20.1 billion.
Source:- livemint.com
Export-Import Bank Of India To Start Project Development Firm With African Development Bank
The Export-Import Bank of India (EXIM) is planning to set up a project development company with the African Development Bank (AfDB) to encourage public-private partnership (PPP) projects in Africa, Yaduvendra Mathur, chairman and managing director of the export finance institution, said .
"We have been working very closely with AfDB and our team has just come back from Tunisia to explore possibilities of setting up a project development company with AfDB. This company will be targeted at bankable projects in Africa.
"We are into getting projects developed for Africa so that Indian companies can participate. AfDB is in dialogue with us and we have been pushing them for the last one year and hopefully this will happen quickly. This is basically for PPP projects. This project development company is to encourage public-private-partnership in Africa," Mathur said in an interview.
Mathur was in New Delhi to attend the three-day long 10th CII-EXIM Bank Conclave on India Africa Project Partnership.
Till date the bank has in place 136 Lines of Credit (LOCs) with credit commitments of around $6.5 billion for financing exports from India to cover around 48 countries in Africa. These LOCs are earmarked for developmental projects like railway rehabilitation, setting up of textile, cement, tractor assembly, agro and food processing, rural electrification and transmission and irrigation.
Overall the EXIM Bank has lent 187 Lines of Credit totalling about $12 billion across the world, he said.
Bilateral trade between India and Africa has shot up from $25 billion in 2006-07 to around $70 billion in 2012-13. However, the Indian government has targeted it to touch $200 billion by 2020.
"African continent is one of most important partners for the country and 11 fastest growing economies in the world are in Africa. We are looking at infrastructure development in Africa, the big project exports. We are encouraging entire private sector in India to get into these sectors," Mathur said.
"We have a big advisory service. If any company evinces interest to invest in that country, we provide them with advice. We do a lot of handholding of Indian companies who are going there."
Talking about lending for various projects in the continent, Mathur said, "Buyers' credit under the National Insurance Export Account that was launched by the Indian government in 2011 has already fetched project proposals of nearly $5 billion.
"Forty five project proposals are in the pipeline. Four projects have already started under this new scheme. Through this scheme the foreign company will get loan from us," Mathur said.
He mentioned that the EXIM Bank is working with a number of African regional banks and institutions to facilitate credit available for projects. The financial institutions with which it is working are Economic Community Of West African States (ECOWAS), Western African Development Bank, AfrEXIM Bank and African Development Bank.
Source:- dnaindia.com
Tobinco Successfully Re-Exports Substandard Drugs To India
The Health Ministry has disclosed that local pharmaceutical company, Tobinco Pharmaceuticals has re-exported the substandard drugs which was seized to its manufacturers.
The pharmaceutical company last year was involved in a media war with the Food and Drugs Authority (FDA) over the importation of substandard and unregistered drugs which was later seized by the FDA.
Speaking to Citi News however, Deputy Health Minister, Dr Alfred Tia Sugri stated that all outstanding issues with Tobinco Pharmaceuticals have now been resolved.
He explained that “all the bad drugs that were at the warehouse have all been destroyed. The condoms which were substandard have been sent back to India, the Malaria drugs have been sent back to India.”
Dr. Sugri served notice that henceforth, any medicine importer who “brings in any container of drugs into the Tema Harbour without having registered the drugs in Ghana with the FDA will have the drugs sent back.”
According to him, it is the duty of the FDA and the Health Ministry to safeguard the lives of Ghanaians and also protect the local pharmaceutical companies.
Source:- citifmonline.com
India’S Iron Ore Exports Fall 28% To 12.57 Mt In Apr-Feb
Country’s iron ore exports witnessed a 27.56 per cent slump at 12.57 million tonnes (MT) during the April-February period of the current fiscal due to continuation of the export duty, mineral industries body FIMI said today.
India, once the third largest exporter of iron ore, had exported 17.35 MT of the mineral in the corresponding period of the last fiscal, data released by Federation of Indian Mineral Industries (FIMI) showed.
“This is a disturbing trend as exports have declined continuously in last few years due to imposition of export duty. We will continue to persuade the government to withdraw the export duty on iron ore as well as on iron ore pellets,” FIMI Secretary General R K Sharma said.
He added that this fiscal’s iron ore exports are expected to come down by over 20 per cent to about 13.5-14 MT from 18.37 MT in 2012-13.
Paradip (4.6 MT), Vizag (4.46 MT) and Haldia (1.81 MT) are the major ports accounting for the bulk of mineral exports, according to FIMI data.
Indian iron ore exports have been hurt badly in last few years due to mining bans in Goa and Karnataka, leading to a drastic fall in domestic production. Besides, an increase in export duty to 30 per cent on both types of iron ore, lumps and fines, in December 2012, also impacted the sector.
However, China continues to be the biggest export market for Indian iron ore, though the quantity has declined by over 31 per cent to 10.44 MT in April-February. Japan is the second biggest market, where 1.65 MT ore has been shipped during the same period, the data said.
Presently, low grade iron ore (or fine) are being exported from Odisha, Jharkhand, Rajasthan and Madhya Pradesh as mining is still banned in Goa, while export of the mineral is not permitted from Karnataka at present.
In the last two months, the Goa government auctioned over a million tonne of iron ore, which was already mined before the imposition of ban.
Quality of the auctioned ore of Goa is of low grade and most the auctioned material is expected to be exported in the near future. This may lead to slight increase in iron ore exports as well.
The industry is estimating that India’s total iron ore production in the present fiscal will be around 140 MT, almost the same as last year.
Source:- thehindu.com
Lessee has ‘right to use’ if responsibilities casted on him to safeguard earthmoving equipment; no s
Service Tax : Where hirer of an earthmoving equipment is responsible for misuse/ abuse, safe custody, liability to settle disputes with third parties and compensation for damages, said transaction, prima facie, amounts to transfer of right to use and deemed sale and not liable to service tax under supply of tangible goods for use services
Depreciation can't be a source of explained investment unless equivalent cash is utilized by assesse
IT : Where assessee claimed that amount of depreciation allowance was a source of income for investment made in assets found during course of search, whereas Assessing Officer opined that said amount must have been used in course of carrying on assessee's truck plying business, in absence of any conclusive material on record, credit was to be allowed to extent of 40 per cent of claim made by assessee
German Recovery On Track As Imports, Exports Rise In January
Economic recovery in Germany appears to be on track as demand for German-made goods increased both at home and abroad, official trade data showed on Tuesday.
The Eugen Maersk container ship (right) and the Majestic Maersk (left) in dock at the JadeWeserPort in Wilhemlshaven, Germany on October 4, 2013.
After adjustment for seasonal blips, Germany exported goods worth 94.5 billion euros ($131 billion) in January, an increase of 2.2 percent from the level inDecember, the federal statistics office Destatis said.
And imports -- a yardstick of domestic demand -- rose even more strongly, climbing 4.2 percent to 77.3 billion euros.
Because imports rose more strongly than exports, the trade surplus -- the balance between imports and exports -- narrowed.
Germany's booming trade surplus has been the target of a great deal of international criticism in recent months, with critics arguing that its economic prowess comes at the expense of the eurozone's weaker members.
The critics argue that Germany needs to boost domestic demand and so help its EU partners by spurring export-driven growth in their economies rather than continue to rely mostly on its own exports for growth.
But the latest trade data, with the strong increase in imports, appear to suggest such criticisms are misplaced.
While German exports to its eurozone partners rose by 3.2 percent year-on-year in January, exports to countries outside Europe jumped by 9.1 percent.
And imports from the euro area climbed by 4.0 percent, while imports from outside Europe contracted by 1.9 percent.
"The euro area economy continued to stabilise at the start of the year," said BayernLB economist Stefan Kipar.
"Today's data were better than expected, not just because exports rose more strongly than expected, but also because exports to the eurozone were positive," Kipar said.
"The sharp rise in imports is similarly positive because it points to a pick-up in domestic demand and takes ammunition away from the heated debate about the German current account surplus," the expert said.
Natixis economist Johannes Gareis said the trade data were "in line with our expectations of a strengthening global recovery, while German imports growth remains robust due to Germany's healthy domestic economy."
Gareis noted that the dynamic of imports in January was driven mainly by German demand for goods from its eurozone neighbours.
"In this respect, the data offer some relief for the German growth locomotive to do more to rebalance the euro area," Gareis said.
Last week, the EU Commission in Brussels said that Germany's huge current account surplus is a source of economic imbalance in Europe.
"Nobody wants to criticise Germany for having a strong external demand and competitiveness," the EU's Commissioner for Economic and Monetary Affairs Olli Rehn said on the presentation of a new report.
"I want see every EU member states be as competitive as Germany," he said.
But "at the same time, Germany -- and to some extent the rest of Europe -- would benefit from stronger domestic investment and reinforced domestic demand in Germany," Rehn said.
Source:- bangkokpost.com
Gold, Silver Imports Dip 71.4% To $1.63 Billion In February
Gold and silver imports declined 71.4 per cent to $1.63 billion in February mainly due to restrictions imposed by the government on inbound shipments of the yellow metal to narrow the current account deficit.
Imports of gold and silver in February 2013 stood at $5.24 billion. In January this year, they were $1.72 billion.Imports of the precious metals during April-February declined 41.47 per cent to $30.7 billion from $52.4 billion a year earlier.
Lower imports helped to narrow the trade deficit to $8.13 billion in February from $14.1 billion.India's current account deficit (CAD), which is the excess of foreign exchange outflows over inflows, touched a historic high of 4.8 per cent of GDP in 2012-13, mainly due to rising imports of petroleum products and gold.
A high CAD puts pressure on the rupee, which in turn makes imports expensive and fuels inflation.According to a finance ministry official, the CAD is expected to fall by almost 50 per cent to $45 billion in the current financial year.
The Reserve Bank had last month projected CAD at less than $50 billion, or 2.5 per cent of GDP, down from $88.2 billion, or 4.8 per cent of GDP, in 2012-13.
The government had increased customs duty on gold to 10 per cent and banned import of gold coins and medallions, while the RBI linked imports of the metal to exports.
India is the largest importer of gold, which is mainly utilised to meet the demand of the jewellery industry. Imports stood at about 830 tonnes in 2012-13.
Source:- timesofindia.indiatimes.com
Income of Malaysian branch of Indian Co. not taxable in India if it was taxable in Malaysia on exist
IT/ILT : Following order passed by assessee's own case relating to earlier assessment years, it was to be concluded that Malaysian branch of assessee was having permanent establishment in Malaysia and, thus, income arising therefrom was not taxable in India in view of DTAA between India and Malaysia
Mere confirmation of parties was not enough to prove legitimacy of bogus brokerage; HC upheld disall
IT : Where evidence on record disclosed that amount paid were not brokerage, merely because payment was confirmed by parties, it would not enable assessee to claim deduction
FinMin notifies 8.7% interest rate wef 01-04-2014 on special deposit Scheme under non-Govt. PF contr
IT : Special Deposit Scheme for Non-Government Provident, Superannuation and Gratuity Funds - Notified Rate of Interest on Deposits Made under said Scheme W.E.F. 1-4-2014 Until Further Orders
HC directs mortgagee to repay sum paid by third person on behalf of its debtor to receive back title
CL: Where pursuant to settlement 'D' paid a sum to mortgagee-company on behalf of debtor-company, mortgagee was directed to return sum paid by 'D' if it wanted to retain title deeds of mortgaged properties
Seized doc indicating capitation fee not enough to cancel trust's registration without proof of its
IT : Where in course of search carried out at assessee's premises, certain documents were found indicating some receipt of cash against admission of students in various courses run by assessee trust, in view of fact that presumption under section 292C was rebutted by denial of assessee as no evidence of actual receipt of donation or capitation fees was found in search, registration granted under section 12AA could not be cancelled on basis of seized documents
Issue not raised earlier before CESTAT can't be raised first time before High Court either
Excise & Customs : In appeal under section 35G, appellant is permitted to raise only such ground, which was raised and decided by CESTAT; therefore, where a question was not raised and decided by CESTAT, it cannot be considered by Court and no review petition can be filed on ground that said question was not so considered
Filing of return before wrong AO won't be deemed as default in filing of return to invite reassessme
IT : Where Assessing Officer reopened assessment on ground that assessee did not file its return of income, in view of fact that assessee had filed its return but through inadvertance return was filed before wrong Assessing Officer, Tribunal was justified in setting aside impugned reassessment proceedings
Addition made by TPO set aside as difference in operating profit margin was within tolerance limit
IT/ILT : Where TPO having found that assessee's operating profit margin was 5.74 per cent as below arithmetic mean margin of comparables of 6.97 per cent, made certain addition to assessee's ALP, since difference in operating margin was within range of plus/minus 5 per cent, no adjustment was required to be made
Preponment of hearing won't invalidates valid transfer order if assessee has given time to file his
IT : Where date of hearing relating to transfer of assessee's case was preponed but still assessee was given a reasonable opportunity to putforth its submissions, impugned order passed by Commissioner under section 127 did not require any interference
Rectification application admissible only against mistake apparent in final order and not in miscell
Service Tax : Only mistakes apparent in 'final orders' are amenable to rectification; mistakes apparent in miscellaneous order allowing restoration of appeal cannot be rectified under section 86 of Finance Act, 1994 read with section 35C of Central Excise Act, 1944
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