IT: Expenditure incurred in ordinary course of business on upgradation, improvement, removal of glitches of existing or already developed software to improve its product is to be treated as revenue expenditure
Tuesday, 25 March 2014
Assessee allowed to determine peak credit after arranging it chronologically to calculate his undisc
IT : Where credits appear in accounts and genuineness of all persons is disbelieved and all credits are held to be assessee's own money, assessee will be entitled to set off and peak credit is to be determined after arranging all credits in chronological order
Indian Banks to pay ST under reverse charge for services received from foreign Banks for import/expo
GST : Section 68 of the Finance Act, 1994 - Payment of Service Tax -Service Tax Payable on Specified Services - Service Tax on Bank Charges Paid by Foreign Banks
No sec. 68 addition when assessee furnishes confirmation of creditors along with docs to prove their
IT : Where name, address, PAN, copy of IT Returns, balance sheet, profit and loss account of all creditors/lenders as well as their confirmation had been furnished, Assessing Officer could not make addition on account of unsecured loan and interest thereon
Entry tax is leviable on purchase price of goods irrespective of selling price of goods in local are
CST & VAT : 'Sale price' of goods by buyer, inside local area, cannot be identified as 'value of goods' for levy of entry tax
Secret commission paid by publishing house to various school to canvass its books is prohibited and
IT: Where Tribunal allowed assessee's claim of payment of secret commission to various schools for promotion of sales of books, in view of fact that Explanation to section 37 introduced by Finance (No. 2) Act, 1998 with retrospective effect from 1-4-1962, prohibited said payments, impugned order was to be set aside and matter was to be remanded back for disposal afresh
ITAT setting aside addition made by AO on estimation basis not to be interfered with, says HC
IT: Since question pertaining to net profit rate on estimation basis is a question of fact, appeal was dismissed at admission stage
Department could challenge classification of services made under self assessment regime
Service Tax : Where assessee has paid service tax on any service under a particular classification under self-assessment regime, said classification cannot be said to have been accepted by department as there is no provision for any such acceptance; therefore, department may challenge such classification as per law
Missing entry of debit notes in ledger rejects plea of damaged goods taken against winding-up petiti
CL: Where no entry for debit note on account of defective material appeared in ledger accounts of respondent, defence that goods supplied by petitioner were defective was sham and was liable at be rejected at threshold
'Infosys' not comparable to small captive service providers; assessee can oppose a comparable chosen
IT/ILT: Infosys Technologies Ltd. being a big company in all respects including range of turnover is not a comparable to small companies which are captive service providers being considerably low turnover
I-T offices to remain open in last three days of Financial Year to facilitate filing of return
IT/ILT : Section 119 of the Income-Tax Act, 1961 - Income-Tax Authorities - Instructions to Subordinate Authorities – Income-Tax Offices Throughout India to Remain Open and Receipts Counters Also to Work During Normal Office Hours on 29, 30 and 31st March, 2014
‘Andhra Pradesh State AIDS Control Society’ notified for sec. 10(46) exemptions
IT : Section 10(46) of the Income-Tax Act, 1961 - Exemptions - Statutory Body/Authority/Board/Commission - Notified Body or Authority - Andhra Pradesh State Aids Control Society
Meaning of term ‘Training Institute’ for purpose of Skill Development Project under Sec. 35CCD redef
IT/Indian Acts & Rules : Income-Tax (Second Amendment) Rules, 2014 - Amendment in Rule 6AAH
‘Ace Derivatives and Commodity Exchange Ltd.’ notified for trading of commodity derivative under sec
IT : Section 43(5), Clause (iii) of Explanation 2 to Clause (E) of Proviso, of the Income-Tax Act, 1961 - Speculative Transaction - Recognized Stock Exchange - Notified Recognized Stock Exchange
For sec. 54EC exemption six months means ‘Six British calendar months’; ITAT Special Bench’s interpr
IT : Time limit of 'six months' in sec 54EC means 'six British Calendar months' in view of the General Clauses Act, 1897
HC quashed ITAT's order which was based on its earlier order without considering merits of case
IT : Where Tribunal allowed assessee's appeal by merely placing reliance upon its earlier order passed in another case and without considering appeal on merits, order so passed by Tribunal was not sustainable in law
Goods deemed to be sold in execution of work contract were not liable to service tax
Service Tax : Goods which were deemed to be sold in execution of works contract shall not enter into purview of levy of Service Tax
Indian Steel Prices To Remain Stable In April
Falling international steel prices, drop in domestic iron ore prices and recent appreciation in rupee that made imports attractive may force steelmakers to either cut steel prices or keep prices unchanged in April.
Steel manufacturers and distributors confirmed that after three consecutive price hikes since January, steel prices are unlikely to rise in April.
A spokesperson from Essar Steel said that "The input cost continues to remain firm. The price levels in India are in line with global prices and in some cases lower than import parity prices. The demand is stable. Hence the prices will continue to remain at present levels."
Mr RK Goyal MD of Kalyani Steels, too agreed that probability of steel prices remaining at current levels in April are high as demand continues to remain subdued. Another steel major having strong presence in southern and western India said that previous price increases were absorbed by the market but now the prices would remain stable.
An analyst said “Steel demand was likely to remain subdued going forward. Even after election if stable government forms at center, it will not immediately translate in to investment. Real effect of new government will start reflecting only after September, thus no major investment is seen in next six months at least.”Steel prices across the globe, barring the US, have remained under pressure because of excess supply.
Source:- steelguru.com
No Leather Shoes Please, Cbse Requests Schools
The environmentalist streak in CBSE seems to have gone a notch higher with the board urging all affiliated schools to discourage the use of leather shoes. The board also feels that leather accessories must be avoided because of the adverse environmental impact it has.
The alternative which the central board suggests are canvas shoes which are commonly used for sporting activities. This is, however, a mere request and not binding on schools.
"There is no dispute that leather comes at a huge environmental and animal welfare cost. The production of leather from animals involves highly toxic chemicals and usage of these can be reduced sizably if leather shoes are not made mandatory in schools," CBSE public relation officer Rama Sharma told TOI.
In a letter the board has urged schools to encourage use of "eco-friendly option of canvas shoes, which are more resistant to wear and tear, more comfortable and relatively inexpensive. Canvas shoes are anyway prescribed for sports purposes and can easily be used for everyday wear eliminating the need for multiple pairs. Considering the concern and to reduce environmental impact caused by school uniforms, this may be considered as a tangible step forward".
While CBSE came up with the idea recently, many schools in Nagpur have been practicing it for quite some time. Centre Point schools had banned leather shoes about four years ago to be in sync with environment friendly practice. Centre Point Group of Schools executive director Mukta Chatterjee said, "Earlier we left the option of type of footwear to parents. Our reasoning for banning leather shoes is that the entire process of tanning and making the final product is very harmful to the environment. Now kids wear the black trainers, which is basically half canvas, and that's the norm for everyone here."
Jain International School principal Anmol Badjatia said, "Our school has been implementing a no-leather shoe policy since day one. Our philosophy is to promote eco-friendly practices in students and protect animals however possible. We use a particular brand of sport shoes and it is extremely comfortable for all."
Even Bhavans group in the city has no-leather shoe policy for the last couple of years but their reason for adopting the rule could not be known, as senior principal A Shastri could not be reached for comment.
Delhi Public School principal Akhilesh Chaturvedi said, "I believe that children must wear only those type of footwear in which they will be comfortable with regards to the geographical location and activity. The comfort of kids comes first before any other criterion."
Source:- timesofindia.indiatimes.com
India’S Unprecedented Appetite For Gold
As the decade-long surge in gold prices moderates, trends ahead may help explain India’s unprecedented appetite for the metal in recent years. To what extent was this driven by the global boom? And how much did domestic factors like inflation contribute? Disentangling the respective roles could offer useful lessons for future economic policies.
The issue is of interest from an Indian perspective, for past inflation episodes haven’t been accompanied by such a large-scale shift towards gold as has happened since 2008. Gold imports grew 42% annually in 2008-12, shrinking 2% in 2012-13 as import duties were raised to narrow the current account deficit. In the same period, global gold prices increased an average 27% annually, in large part fueled by the creation of global liquidity by advanced countries’ central banks. Gold is priced in dollars, so when the dollar’s value gets debased, investors reposition their holdings in favour of gold establishing a positive relationship between quantitative easing and gold prices.
The Indian lust for gold is commonly ascribed to high inflation. Consumer price inflation averaged 10% each year from 2009 to 2011, while real interest rates were negative over 2009-10 from loose monetary policy. Savers shifted to physical assets like gold from financial assets like bank deposits; deposit growth nearly halved from 20.4% in 2008-09 to 11.4% by 2010-11, recovering thereafter as monetary policy settings were adjusted.
Inflation alone however may not account for this extraordinary gold appetite. Given the coincidence with the global boom, portfolio factors possibly played a role. Gold outperformed all other assets in this period, offering savers annual returns in excess of 25% in 2008-11. Bank deposits compare poorly with that, even if real rates are positive as happened in 2012 -- gold demand remained undampened, inviting fiscal restraints. Income growth was strong too—in the four years to 2011-12, Gross Domestic Product growth averaged 7.7% annually, while per capita incomes grew an average 6% each year. Indian gold demand is highly income elastic.
With the US monetary stimulus in reversal mode, its economy recovering firmly and interest rate increases on the horizon, the settings are now reversing for gold. Global gold prices fell 28% in 2013. A changing global macroeconomic framework may thus reflect in India’s gold demand. Moderation to long-term trend levels will help highlight the role of future macroeconomic policies. For example, global liquidity that enters in the form of capital flow surges when combined with exchange rate appreciation, rising incomes and import demand, consumption and asset price boom, as was the case in 2009 and 2010, along with high inflation. Monetary policy alone then cannot curb gold demand; fiscal measures would be more effective instead.
Source:- livemint.com
Wheat Stands Steady Amid Surging Market Crisis
Indian wheat prices remain firm in the global market with no signs of an ease off in the Ukraine-Russia crisis. Delayed harvesting of wheat in Rajasthan and parts of Gujarat owing to cool weather is also attributed to the rise in prices to $285-290 a tonne for May delivery from a low of $265 a tonne in January.
However, in the volatile market industry sources say that private exporters are not keen on further forward contracts and adopt a wait and watch policy. Business conglomerates from ITC, Cargill, Noble, Louis Dreyfus, Glencore, Bagadiya Brothers and Emmsons have been in the market since January.
"If the crisis in Ukraine-Russia continues we may see bulk buyers flocking to India and domestic prices may go up due to sudden demand pull," said Tejinder Narang a grain analyst. Indian wheat prices are currently the cheapest compared to Australian, Russian and French.
Exporters state that wheat was sold on multi-origin basis and specification and Indian wheat could soon see arise in demand. "India wheat will be blended with high priced wheat from European Union for Middle East market. The contract size will fall to 20,000 tonne from 50,000-60,000 tonne as being done earlier due to uncertain global and domestic market," said a global player in wheat trade.
According to some exporters the buyers were ready to buy wheat at even $290 a tonne, but sellers were reluctant in hopes of prices to firm further amid reports of Rajasthan government likely to give bonus to wheat farmers this season. "I have been able to only buy 500 tonne wheat from around Rajkot in Gujarat as supplies have been low," said another global grains and oil seeds company official.
Since January this year, exporters have been doing forward contracts for March-April-May delivery ahead of the wheat crop arrival from Russia, Ukraine, America and Australia. "The market is taking a breather after 3-4 week of rally. We feel that it is a good time for market to sell and not hold as the rally might not stay for long," said BK Anand, head, grain supply chain, Cargill India.
Source:- economictimes.indiatimes.com
Sums paid to NRs for services rendered outside India won't be liable for TDS in absence of their PE
IT/ILT : Where foreign branches of assessee made payment to foreign suppliers for services rendered outside India and said suppliers did not have permanent establishment in India, assessee was not required to deduct TDS on such payments
Sum received from NRE a/c of brother held as unexplained as recipient couldn't explain source of dep
IT: Where assessee received certain amount from NRE account of his brother but he could not give any further details of either source or creditworthiness thereof, authorities below were justified in bringing said amount to tax as unexplained cash credits
Fieo Expects Rbi To Cut Interest Rate To Help Msme Exports
The Reserve Bank of India (RBI) may consider LIBOR plus lending to the micro small and medium enterprise (MSME) export sector besides a rate cut for rupee lending given some moderation in CPI, said exports body Federation of Indian Export Organistions (FIEO) in a statement Monday.
"RBI could consider a rate cut in the policy given that there is a upsurge in credit and a demand by banks to cut CRR to provide credit to industry," said M Rafeeque Ahmed, President, FIEO while commenting on the forthcoming announcement of the monetary policy review on 1st April prior to the annual policy. He stated that as the per the RBI update of 21st march 2014, WPI had settled at 4.7 percent and CPI stood at 8.1 percent, with credit to the commercial sector moderating at 14 percent.
FIEO Chief stated that net foreign exchange assets of banks have grown to 17.3 percent and given that exports have shown a decline of 3.7 percent in USD terms over a year, and rupee is again in a volatile mode, banks could consider providing export credit in foreign currency at LIBOR + rates as against a deregulated regime of export credit in foreign currency announced a couple of years back, added Ahmed. This would help the MSME export sector which is unable to borrow through ECB route easily.
FIEO Chief stated that providing foreign currency loans at competitive rates in a scenario of appreciating rupee/ narrowing CAD due to clamp on gold/ and India's exclusion in respect of many important products from the European Union (EU)'s GSP benefits would imply that mineral products, textiles, motor vehicles, bicycles, chemicals etc, which originate from India, will no longer get preferential treatment attracting higher duties in EU.
This would further impact exports even though markets in advanced countries are showing buoyancy in terms of consumption patterns/volume of world trade increasing by 0.6 percent in January 2014 said Ahmed.
Source:- smetimes.in
Export Subsidy For Sugar Questioned At Wto Meet
The government's pre-election bonanza for the sugar industry has been questioned at the World Trade Organization, making it the second farm subsidy to global face scrutiny in recent months.
Australia, Colombia, Brazil and the European Union, along with others, have raised several questions including the compatibility of the latest set of sops with WTO rules with some urging India to immediately remove what they described as export subsidies that will potentially impact world trade. The issue was raised at a meeting of WTO's agriculture committee on March 21, said a source familiar with the developments.
Paraguay, Thailand, El Salvador, Canada, the US, Pakistan and New Zealand were the other countries that protested India's export subsidy for sugar meant to clear a glut.
At the meeting, WTO members once again questioned India about details of its support programmes for rice and wheat and its stockholding programme for food security. In a questionnaire circulated before the meeting, the US went to the extent of suggesting that the government's subsidy programme was highly inefficient.
Some members also asked India to circulate more up-to-date information on its domestic support. Government officials said the notifications were being prepared and there was no question of breaching the prescribed limits.
The government's trade policies have come under intense scrutiny in recent months.
But the immediate focus was on sugar export subsidies, which hogged limelight at the meeting. Sources said Australia, Colombia, Brazil and the EU went to the extent of seeking the legal basis for the export subsidies announced last month. They also said India has agreed not to subsidize exports.
Indian officials defended the move and said the policy was designed to encourage diversification from white sugar to raw sugar and that no intervention payments had been made yet. The total is not expected to exceed the equivalent of $80 million, they said.
Australia said the Rs 3,300 per tonne incentive payment was the equivalent of 14-16% of the world price. Since India is the third largest exporter of sugar, this threatens to seriously distort trade, Australia said and pointed out that the amount could potentially finance its own exports half way across the Pacific.
Source:- timesofindia.indiatimes.com
Bajaj Auto To Export Made-In-India Ktm Duke 200 And 390 To China
Bajaj Auto is facing slowing down sales in India and is therefore looking at the export market for solace. Like India, China is a huge bike market but Bajaj doesn’t have a presence in that country. Bajaj is planning to make its Chinese debut with KTM Duke motorcycles. From this week, the KTM Duke 390 will be exported to the Chinese market.
Bajaj will follow a top down approach for the Chinese market by first launching the Duke 390 and then following it up with the Duke 200. Both the Duke 200 and 390 are built at Bajaj Auto’s factory in Chakan, an industrial township near Pune. Bajaj Auto will initially export 9000 bikes a month to China.
In a year’s time, Bajaj plans to increase this number by a whopping 10 fold. For Bajaj, which is presently exporting 1 lakh bikes a month to countries around the world, China presents an opportunity to double its exports as the company seeks to export 90,000 KTM bikes each month to China next year.
Bajaj Auto holds a near 50% stake in KTM. While KTM handles the research, design and development of world class sportsbikes, Bajaj Auto brings its manufacturing expertise to the equation. The Pune headquartered Indian two wheeler giant produces bikes for a fraction of a cost when compared to what KTM would need to spend to build bikes in Europe.
These cost savings allows Bajaj to sell KTM bikes at a very competitive price in the former’s home market of India. By using Bajaj Auto’s factory as a low cost manufacturing base, Austrian bike maker KTM is able to earn big profits when it sells the Duke 125, 200 and 390 models in European and other developed countries.
Soon, KTM and Bajaj will launch fully faired bikes based on the Duke platform. The KTM RC 125, RC 200 and the RC 390 will be exported to markets around the world and China could also be a major export destination for these bikes. In India, Bajaj and KTM will sell the RC 200 and RC 390 fully faired sportsbikes.
Source:- indiancarsbikes.in
Collusion among cylinder manufactures held anti-competitive as identical bids were quoted in a tende
Competition Law : Where association of cylinder manufactures quoted identical bid by holding meetings just prior to making bid offer, there was concerted agreement bidders in contravention of section 3
Sec. 80-IA relief can't be curtailed by brought forward losses not pertaining to initial year of rel
IT: Loss prior to initial assessment year of claiming section 80-IA deduction which has already been set-off cannot be brought forward and adjusted into period of ten years from initial assessment year
Rupee Further Strengthens By 27 Paise Against Dollar
The rupee firmed up further by 27 paise to 60.50 against the American currency in the morning trade on Tuesday. This was mainly because of sustained selling of dollars by banks and exporters in view of persistent capital inflows from foreign funds despite higher dollar in overseas market.
The rupee resumed higher at 60.60 per dollar as against Monday’s closing level of 60.77 at the Interbank Foreign Exchange (Forex) Market and advanced further to quote at 60.50 per dollar at 1000 hours.
It moved in a range of 60.50 and 60.60 per dollar during the morning deals.
Banks and exporters continued to sell dollars in view of sustained capital inflows from foreign funds into equity market.
However, the benchmark BSE Sensex eased by 16.45 points, or 0.07 per cent, to 22,039.03 at 1000 hours.
In New York market, the US dollar edged higher against the yen yesterday as traders appeared to shrug off further signs of slowing Chinese growth and tensions over Russia’s annexation of the Crimea region.
Source:-thehindu.com
No denial of refund on pretext of unjust enrichment if purchaser had admitted fact of non-recovery o
Excise & Customs : Where : (a) due efforts were made to find out whether amount of duty had been passed over to purchasers being government-controlled enterprises; and (b) even purchasers had admitted fact that amount of duty had not been recovered from them, and said finding is not challenged/disturbed, refund cannot be denied on ground of unjust enrichment
AO can initiate re-assessment on basis of info found in return even after issue of sec. 143(1) ackno
IT : Normally Assessing Officer is Competent to initiate reassessment; however, on expiry of 4 years, satisfaction is to be recorded by an officer of higher rank
HC accepts winding-up petition as Respondent Co. didn't attempt to pay debt even during pendency of
CL: Failure of respondent-company to repay any sum towards repayment of loan taken from petitioner-bank even during pendency of winding up petition established that respondent was unable to pay its debts
Rental income of godown constructed on an agricultural land couldn't be termed as agriculture income
IT : Where assessee-firm having constructed a godown on agricultural land received from partners as their capital contribution, gave it on rent for tenant's business purpose, rental income arising from said godown building could not be regarded as agricultural income
Entity with higher turnover, intangibles and brand value couldn't be a comparable to contract servic
IT/ILT : Where assessee was only a contract service provider to its AE, companies owning intangibles, substantial brand value and having huge turnover as compared to assessee, could not be considered as comparable to assessee
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