IT: Where revenue raised a question as to whether assessee could file revised computation for making additional claim for deduction other than filing a revised return of income, in interest of justice, assessee was to be directed to file a revised return of income raising additional claim along with an application for condonation of delay under section 119(2)(b)
Thursday, 20 March 2014
Notice won’t be presumed to be served if it was sent on wrong address and received by an unauthorize
IT : Where Assessing Officer issued notice seeking to reopen assessment on wrong address and person alleged to be an employee of assessee was not authorized to receive notice, presumption of service of notice under section 292BB would not be attracted and, therefore, impugned additions made in reassessment proceedings deserved to be set aside
Specific provision prevails over general provision when conflict arises in entries providing exempti
CST & VAT : Where Entry 1E provided 25 per cent exemption to 'large cement units' and another entry provided 75 per cent exemption to 'all prestigious units', then, for an assessee being a cement unit satisfying both entries, specific provision viz. Entry 1E would prevail and assessee would be entitled to only 25 per cent exemption
Mere transfer of an amount from subsidy account to partner’s capital account wouldn’t make it liable
IT : Merely because assessee changed nature of treatment of subsidy received in year 1995 from subsidy account to partner's capital account for accounting purpose, it would not permit revenue to examine taxability of such receipt in assessment year 2004-05 by reassessment proceedings
Failure to produce docs in respect of grounds of appeal entails CIT(A) to pass ex-parte order
IT : Where assessee inspite of large number of adjournments granted by Commissioner (Appeals) did not produce any document in respect of grounds of appeal, nor made written or oral submissions, Commissioner (Appeals) was justified in proceeding ex parte against assessee
One year time-limit isn't applicable for claiming refund of duty paid under protest
Excise & Customs : Where duty has been paid under protest and said fact is not challenged, time-limit of 1 year for claiming refund will not be applicable
Odisha Mining Corp. wasn't abusing its dominance in chrome ore market as it charges fair prices from
Competition Law: Odisha mining Corporation Ltd. enjoyed dominant position in chrome ore market
Statutes allows only one TP method, CPM once adopted can't be switched to TNMM subsequently
IT/ILT : Cost plus method (CPM) is most appropriate method in case of contract manufacturers but that would be subject to satisfaction of parameters laid down in Rules 10C
Issue as to whether works contract could be vivisected to tax services prior to 1-6-2007, referred t
Service Tax : Issue whether a works contract would be vivisected and part of it subjected to service tax even prior to introduction of works contract services w.e.f. 1-6-2007, stands referred to larger bench of 5-members of Tribunal
Advertising agency isn’t taxable on its advertisement receipts till it appears before public; ITAT r
IT : Where assessee-company, who was in publication of advertisement in directory, did not recognise advance as business receipts till directories were complete, published and put to public circulation, its stand was in consonance of AS-9
New objection Form ‘DVAT 38’ notified; contains details on rectification of 2A/2B mis-match after as
GST/Indian Acts & Rules : Delhi Value Added Tax (Amendment) Rules, 2014 - Amendment in Rule 67 and Form DVAT 38, Form DVAT-16, Form DVAT-17 and DVAT-31 and Omission of Form DVAT-51
Delhi Govt. notifies new forms for reconciliation returns and cancellation and amendment of CST regi
GST/Indian Acts & Rules : Central Sales Tax (Delhi) (Amendment) Rules, 2014 - Amendment in Rule 4 & CST Form-1 and Insertion of Rule 10A, Form-9, Form-10 & Form-11
Anyone Can Export Onions Again After Four Decades
For close to four decades, export of onion could take place only through the agencies designated by the government. Now anyone can export onions, as the Central government freed export of the bulb by removing this condition last week.
Onion export was canalised in 1974. National Agricultural Cooperative Marketing Federation (Nafed) was the only canalising agency till 1999. Subsequently, 12 State Trading Enterprises (STEs) along with Nafed were designated as the canalising agencies for export of onion. The exporter had to pay 1% commission to these agencies in order to get the no-objection certificate for exports.
As the country is expecting an all-time-high onion crop in 2014-15, the government about to face the electorate, removed the minimum export price (MEP) restrictions, which were imposed during winter season as retail prices touched Rs 100/kg.
Last week, the director general of foreign trade (DGFT) issued a notification to free onion exports. There was a strong demand from growers and exporter to remove canalisation as it did not serve any purpose.
"The canalising agencies did not use the money collected from the exporters to better the condition of farmers," claimed Ajit Shah, president, Onion Exporters Association.
The 13 canalising agencies include NAFED, Maharashtra State Agricultural Marketing Board (MSAMB), Spices Trading Corporation, AP State Trading Corporation. "Only five to six of the STEs were actually functioning," said Nafed Director HB Holkar.
MSAMB, which was a leading agency issuing no objection certificates to onion exporters has welcomed the decision. "Freeing up of onion exports will help boost onion exports. We never looked at the commission charged for the certificates as a source of revenue for us," said MSAMB Managing Director Milind Akre.
Exports would be crucial to avoid a crash in onion prices as the rabi harvest gathers pace from April. The current unseasonal rainfall, though has damaged the standing onion crop, will not affect the overall onion availability due to record area under the rabi crop. Despite the arrival of rain-damaged crop in the market, domestic prices have remained firm at Rs 6/kg to Rs 8/kg as the good quality bulb is getting a good price.
Source:- economictimes.indiatimes.com
ITAT upheld TP adjustment as assessee wasn't charging fee for providing guarantee to bank for its su
IT/ILT : Where assessee paid guarantee fee to bank for providing working capital facilities to its wholly owned subsidiary, transfer pricing adjustment with regard to evaluation of such services on basis of comparables given by assessee was rightly made
Sum paid to eliminate competition entailing advantage for specified time was capital in nature, says
IT : Prior to introduction of section 35DDA, payment in relation to VRS to employees working at a plant which was on selling block is allowable as revenue expenditure
RBI permits Assets Reconstruction Cos. to use funds raised from QIBs for restructuring their financi
NBFCs/SARFAESI : Restructuring Support Finance- Participation by Investors
Corporates On Their Toes As Rupee Appreciation Hits Exports
Since it hit a low of 68.83 against the dollar in August, the rupee has appreciated about 11 per cent to 61.21 a dollar, hitting a large number of exporters hard. However, the recent appreciation has not deterred companies such as electric goods maker Havells from ramping up their base in India.
About a year and a half ago, the company set up a manufacturing plant for 16-inch table, pedestal and wall fans in India. The plant, in Uttarakhand, was set up because Chinese manufacturers had increased prices, citing rising labour costs. Besides, the yuan (the Chinese currency) and the rupee have been moving in opposite directions against the dollar, giving an obvious advantage to Indian exporters. While the yuan has appreciated 9.35 per cent since March 31, 2009, to 6.2/dollar, the rupee has depreciated 20.6 per cent to 61.21/dollar during this period.
“The advantage certainly gets marginalised when the rupee is stronger…If it comes close to 55-56 against the dollar, the advantage will be neutralised,” said Sunil Sikka, president, Havells India.
In 2007, Havells acquired Frankfurt-headquartered Sylvania for $300 million to cater to developed markets in Europe. After the financial crisis of 2008, the company shut two of its five manufacturing plants in Europe and set up a joint-venture manufacturing plant in China to supply light-emitting diode products to Sylvania.
About a year ago, the company set up a manufacturing plant for lighting fixtures in Neemrana (Rajasthan) to supply to Sylvania. Earlier, the company sourced lighting fixtures from Costa Rica and France. Now, India is the new sourcing hub for the company’s European operations.
The garments sector, too, isn’t perturbed by the recent appreciation in the rupee. The sector has been gearing up to avail of the advantages of cheap labour and a favourable currency compared to China. Raymond, best known for selling branded textile for men’s suits, plans to increase exports fourfold in the next five years, as the domestic market faces a relative slowdown. According to the company’s estimates, India exports $40 billion (about Rs 2 lakh crore) of textiles a year. In 2012-13, Raymond’s export revenue was about Rs 250 crore. The company plans to invest about Rs 1,000 crore through the next five years, primarily to augment capacities.
“Some amount of the appreciation was already factored in,” says M Shivkumar, chief financial officer, Raymond. “We also expect softening of interest rates as inflation comes down; that will cover the loss due to the rupee’s appreciation,” he said.
However, these success stories could be limited. In February, India’s merchandise exports fell 3.67 per cent to $25.68 billion, against $26.68 billion in the year-ago period. This dashed hopes the $325-billion export target for this financial year would be met, as the outlook for export growth was weak, given the rupee’s recent gains against the dollar.
“Indian exporters have a cost disadvantage of 14-15 per cent against their Chinese counterparts,” says Sanay Budhia, chairman, national committee on import and exports, Confederation of Indian Industries.
About a year ago, the government withdrew the duty entitlement pass book (DEPB) scheme. DEPB was expected to neutralise the impact of import duty on inputs. “India cannot remain complacent, as importers are also looking at countries such as Vietnam and The Philippines to beat rising costs in China,” Budhia said.
Still, China has an advantage in that it manufactures low-engineering, high-volume products due to economies of scale. But India has an obvious advantage in exporting smaller-volume products that require engineering inputs. Traditionally, India’s forging and automobile component sector has come under this segment and benefited from the export market.
Source:- business-standard.com
Assets Reconstruction Cos. allowed to acquire NPA via auction from their sponsor banks
NBFCs/SARFAESI : Buyback of Assets from SC/RCS by The Defaulters and Acquisition of Assets by SC/RCS from Sponsor Banks
SEBI eases KYC norms for investors; intermediaries should verify client’s info from KRA system
SEBI/Indian Acts & Rules : SEBI {KYC (Know Your Client) Registration Agency} (Amendment) Regulations, 2014 - Amendment in Regulation 16
Penalty under FEMA waived off as it could have caused undue hardship to appellant
FEMA : For waiver of pre-deposit of penalty in an appeal before Tribunal, appellant has to establish a prima facie case and also that deposit of penalty would cause undue hardship to appellant
India Should Stop Exporting Sugar: Hsbc Survey
India should stop exporting sugar as in the long term, production is likely to match domestic demand and its output cost is already higher compared to other countries, an HSBC survey has said.
Titled ‘Global Agricultural Commodities’, the survey has said that Brazil is the lowest cost producer of sugar at $17 per pound and the cost in India is almost 40% higher than that. As a result, Brazilian exports of sugar have soared in the last two decades.
“In the long term, India should stop exporting. In our long term projections, we believe India’s internal sugar consumption will be equal to its production capacity,” the survey said. Historically, sugar production in India had been the determining factor for global sugar prices, which is not the case now, it said.
The survey added: “When prices go up, farmers would plant sugarcane and India would switch from a net importer to a net exporter. A collapse in sugar prices, caused by the switch to exports, would pressure the margins of millers and eventually delay payments to farmers. The farmers in turn would switch to other crops forcing India to switch back to being an importer of sugar.”
It pointed out that there will be a further fall the sugar production in the country, as several mills have been operating with very low to negative margins, and the levels of arrears to farmers is reaching historic highs.
Source:- livemint.com
India May Suspend Wheat Exports Mid-Way
India might suspend exports of wheat even without achieving thescheduled target of 2 million tonnes due to fears of crop damage from therecent hailstorms across the country.
"The decision is underway. While the Ministry of Food has alreadytaken final decision in this regards, it will communicate to the public sectorgrain procurement agency the Food Corporation of India (FCI) soon," an informed source said.
India has already accepted bids for 1.40 million tonnes of wheat exports so far this year out of the 2 million tonnes target set by the FoodMinistry in August last year. The target was set to be achieved by June 2014 to earn Rs 3,400 crore from wheat exports at an average price of $300 a tonne, similar to last year's realisation. India's wheat export was recorded at over 4million tonnes last year.
But, because of price fall in global markets, the tenders including PEC and MMTC received poor response. Consequently, importers negotiated bidprice upto $260 a tonne for some lots. FCI is a facilitator of wheat supply tothese public sector grain trading agencies.
Sources said that proper assessment of the crop damage is yet to bedone. Hence, the government decided to suspend wheat exports temporarily. Incase of insignificant crop damage, exports can be opened to meet the target, he added. Wheat, a 100 per cent rabi crop, is sown in India between October and December for harvesting between March and May.
Before hailstorms, Karnal (Punjab) -based Wheat Research Instituteforecast India's wheat output at 95.6 million tonnes this year compared to 92.46 million tonnes in the previous year. Wheat prices in global markets jumped by $27 to trade currently at $273 a tonne due to fears of supply disruptions from Ukraine, one of the world's largest suppliers on the country's stand-off with Russia.
Source:- business-standard.com
Rupee Drops Most In A Week As Fed Signals Rate Increase
India’s rupee fell the most in a week after the US cut stimulus further and signalled interest rates will be raised, potentially damping fund flows into emerging markets.
The Federal Reserve reduced its bond-buying programme by $10 billion on Wednesday to $55 billion. The purchases will finish by year-end with a borrowing-cost increase to follow in around six months, chair Janet Yellen indicated. The rupee’s losses will probably be limited because its 12.6% rebound from a record low in August, the best performance among 24 developing-nation currencies, is helping attract overseas investors, according to FirstRand Ltd.
“If the Fed announcement had come six months ago the rupee’s drop would have been much steeper,” said Paresh Nayar, head of currency and money markets at FirstRand in Mumbai. Sentiment has turned. The Fed statement was discounted to a large extent and we even saw some inflows today.
The rupee weakened 0.3% to 61.165 per dollar as of 10:41 am in Mumbai, the biggest drop since 12 March, according to prices from local banks compiled by Bloomberg. It fell as low as 61.385 earlier. Nayar sees the currency trading mostly between 61 and 61.40 on Thursday.
The Federal Open Market Committee said yesterday it will no longer link borrowing costs to a specific unemployment rate, and will consider a broad range of indicators on the labour market, inflation and financial markets instead. Separately, the Fed released forecasts showing more officials predicting the benchmark rate, now close to zero, will rise at least to 1% at the end of 2015 and 2.25% by the end of the following year, higher than previously forecast.
Capital inflows
The rupee declined less today than the currencies of Indonesia, Thailand, South Korea and Malaysia. The rupiah slid 1% and the baht 0.7%, while the won and the ringgit lost 0.5% each. Global funds bought a net $1.6 billion of Indian stocks and $6.2 billion of rupee-denominated debt this year, exchange data show, as inflation eases and the government forecasts narrower deficits.
The current-account shortfall will be kept below $40 billion in the year through 31 March, finance minister P. Chidambaram said in a 7 March briefing in New Delhi, compared with a record $88 billion in the previous 12 months. The budget gap will narrow to 4.6% of gross domestic product, the least since 2007-2008, from 4.9%, he estimated in February.
One-month implied volatility in the rupee, a gauge of expected moves in the exchange rate used to price options, rose 35 basis points, or 0.35 percentage point, today to 9.14%. The measure has dropped 106 basis points in 2014.
The rupee’s three-month offshore non-deliverable forwards fell 0.4% to 62.40 per dollar. Forwards are agreements to buy or sell assets at a set price and date. Non-deliverable contracts are settled in dollars.
Source;-livemint.com
HC reduces pre-deposit requirements as freight forwarders aren't prima facie liable to service tax
Service Tax : Freight forwarders are not, prima facie, liable to service tax and even otherwise, case is arguable one; therefore, pre-deposit was reduced
HC hadn't to interfere if ITAT allowed assessee to furnish additional evidence before AO in support
IT : Where Tribunal while remanding matter back relating to disposal of assessee's claim for deduction of staff welfare expenditure and administrative expenditure, allowed assessee to lead additional evidence and further directed Assessing Officer to consider entire evidence brought on record, said order of Tribunal being justified did not require any interferencec
Plea of irreparable loss can’t be sole consideration while dealing with request for stay of demand,
IT : The question of irreparable loss not the only consideration while dealing with application for stay of demand . If this were so, every assessee with the means of deposit would be denied a right to seek stay of demand irrespective of the merits of his case. This is insupportable either on principle or on authority
SC raps HC for affirming ITAT's order on taxability under sec. 9 without considering question of law
IT/ILT : Where regarding question of taxability procurement service, under section 9 High Court had merely quoted judgment of Tribunal in extenso without deciding substantial questions of law raised, matter was to be readjudicated
In a prima facie case of oppression CLB granted ad interim relief to protect stakeholder against irr
CL: Where petitioner had succeeded in making out prima facie case of oppression and mismanagement, irreparable loss should be caused if ad interim reliefs were not granted to safeguard interest of stakeholders
Sec. 80-IB deduction allowable to card box manufacturer on income arising from sale of scrap
IT : Assessee, engaged in manufacturing card boxes, was entitled to deduction under section 80-IB in respect of income arising from sale of scrap
'IPOL Cylinder Oil 1200' is not lubricating oil; not liable to Karnataka Entry Tax
CST & VAT : 'IPOL Cylinder Oil 1200' is base oil and not lubricating oil and cannot, therefore, be charged to Karnataka Entry Tax; classification of said goods as 'lubricating oil' under Central Excise not relevant for entry tax purposes
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