Concealment penalty upheld as claim of depreciation on computer was not genuine: HC

IT : Where assessee's claim for depreciation on computers was neither bona fide nor substantiated with evidence on record, imposition of concealment and leased to ALTOS penalty was warranted

AO can't make additions on estimations without rejecting books of account or directing special audit

IT: Where audited books of account were not rejected or matter was not referred to special audit, Assessing Officer was not entitled to compute average interest on advances and to add difference between such average interest and interest actually charged

Where assessee sought for personal hearing, mere reference to written submissions not suffice; matte

CST & VAT : Where assessee has sought for personal hearing, then, mere reference to written submissions, documents and reply furnished by assessee would not suffice; in such cases, grant of personal hearing is mandatory

HC directs revenue to stay recovery as assessee agreed not to press for refund till disposal of appe

IT: Revenue was directed to lift attachment in respect of bank accounts forthwith and not to take any percipitative action with regard to outstanding dues as assessee agreed that it would not press for refund for which it was eligible for assessment years 2012-13 and 2013-14 till disposal of appeal before Commissioner (Appeals)

Genuine sale advances weren't unexplained cash credits merely if cash balance wasn't found on respec

IT : Where Assessing Officer made a lump sum addition in income of assessee on ground that it had accounted sale advances on various dates, but it did not have sufficient cash and Commissioner (Appeals) admitting additional evidence allowed appeal of assessee, Tribunal was justified in remanding matter to Assessing Officer to appreciate entire issue afresh

Parking services provided at airport were liable to ST either under Airport services or renting serv

Service Tax : Parking Services provided at airport or at any other place are not liable to service tax before or after 1-6-2007 under 'Airport Services' and/or 'Renting of Immovable Property Services'

Definition of NPA is neither unfair nor in violation of Articles 14 and 19 of Constitution: Delhi Hi

SARFAESI : Section 2(1)(o) is neither unreasonable nor violative of articles 14 and 19(1)(g) of Constitution

CUP method is more appropriate than TNMM if details of internal and external CUP are available

IT/ILT: Where assessee has both details for internal CUP as well as external CUP, CUP method should have been adopted as most appropriate method for comparing purchase price of raw materials of ferro-alloys acquired by assessee from AE

Yarn Producers Seek Govt Help To Avert Crisis

After several years of good business despite growing energy shortages, Punjab’s yarn producers could be headed for another crisis that may force many to close down factories to avert losses.

A confluence of domestic and regional developments is said to have obliged many spinners to stop purchasing cotton and production until the market stabilises, causing ginners’ unsold stock to pile up.

Major regional developments claimed to have made domestic yarn production ‘unviable’ include slowdown in Chinese demand for Pakistani yarn and 5pc rebate allowed by India on its yarn exports since January.

Domestic factors affecting yarn production in Punjab include rising electricity prices (currently standing at $0.18 per unit), unavailability of cheaper gas for captive power generation and strong revaluation of the rupee.

“Yarn market has fallen like ninepins in the recent weeks,” a yarn merchant at Faisalabad’s Sooter Mandi told Dawn. He said Punjab’s spinning had flourished in last few years despite energy crunch on the back of a strong Chinese demand.

“But now the Chinese demand is tapering off. On top of that India with surplus cotton of 10m bales has entered the market with a big bang. India’s yarn isn’t only replacing Pakistan in China but also flooding our market because of 10-20pc price differential in various categories,” the merchant, who spoke on condition of anonymity, claimed.

“Power loom owners prefer Indian yarn despite its poor quality because of its low price,” he argued.

“I don’t have the exact numbers because India is sending yarn mostly from the sea route. But some in the market say at least 1m bales would have made their way into Pakistan’s market by the end of the present fiscal,” he reluctantly said.

A Lahore-based spinner contended that yarn imports from India could rise to 1.5-2m bales this year. “India has given rebate to damage our textile industry, which was feeling buoyed after getting GSP+ status from the EU.”

“We could have somehow survived competition from India but the recent rupee appreciation against the dollar and increasing electricity prices have broken our back,” said the spinner, who said at least 100 spinning factories in Punjab faced closure once their current cotton stocks are exhausted over the next few days.

He said the spinners wouldn’t survive Indian competition unless the government allowed them rebate to offset the effect of the currency appreciation, imposed 5pc duty on yarn imports, brought down electricity prices and provided gas for captive power five days a week.

The ginners approached the commerce minister last week to request him to force spinners to lift their stocks. “Since it’s not possible to force the spinners, the minister has promised to look into the possibility of pulling in the TCP to procure their unsold stocks,” an apparel exporter, who claimed he was present in the meeting between the ginners and the minister, said.The value-added textile exporters are opposing restrictions on Indian yarn.

Source:- dawn.com

Indirect Tax Collection Up 5.6 Pc At Rs 4.41 Lakh Crore In Apr-Feb

Indirect tax collections grew by 5.6 per cent to Rs 4,41,826 crore in the April-February period of this financial year amid a slowing economy.

Total collection of indirect taxes - excise, customs and service tax - in February rose by 5 per cent to Rs 43,794 crore, against Rs 41,714 crore in the same month last financial year, official sources said.

Service tax collection grew 15.4 per cent to Rs 12,181 crore in the last month, against Rs 10,556 crore in the year-ago period.

Customs mop-up stood at Rs 15,109 crore, while Central Excise collection was at Rs 16,504 crore in the month.

Total collection of indirect taxes stood at Rs 4,18,286 crore during April-February 2012-13.

Excise collection dropped by 3.8 per cent to Rs 1,49,711 crore during April-February FY14, against Rs 1,55,570 crore in the same period last financial year, reflecting a slump in manufacturing activity, the sources said.

Service tax collection, which has become a new focus area for revenue department, grew by 18.2 per cent to Rs 1,34,171 crore in April-February FY14, against Rs 1,13,505 crore in the same period last financial year.Customs duty contributed Rs 1,49,211 crore during the period, sources said.The Government has set a revised indirect tax collection target of Rs 5.19 lakh crore for 2013-14.

Source:- businesstoday.intoday.in

HC denied sec. 12A registration to 'Guru Harkishan Medical Trust' as it was created contrary to law

IT : If the creation of a trust is illegal and contrary to law , no registration can be granted to it under section 12A especially when a civil court has held that establishment of trust is illegal and contrary to law. There is mandate to question or re-appreciate the civil court's decision in income-tax appeals filed before HC under section 260A of the Act. The HC while dealing with IT appeals under section 260A shall regard civil court decision as final subject to any further appellate interfe

High Court permits re-export as importer abandoned goods due to increase in duty; matter remanded

Excise & Customs : Where importer had abandoned goods owing to increase/levy of anti-dumping duty and there was no allegation of misdeclaration/undervaluation, goods were allowed to be re-exported back to foreign exporter

Payment to villagers not having any bank account during holidays shielded from sec. 40A(3) disallowa

IT: Where persons to whom cash payments exceeding rupees 20,000 were made were villagers and they did not have bank accounts and payment had to be made to them immediately to secure lands on holidays and Sundays, said payments could not be disallowed under section 40A(3)

Sugar Production In India Seen Jumping As Subsidy Boosts Exports

Sugar output in India, the world’s largest producer after Brazil, is set to climb for the first time in three years as a subsidy for raw exports and abundant dam water spur farmers to increase planting.

“Production may gain 5% to 25 million tonnes in the harvesting season starting 1 October,” said M.G. Joshi, managing director of the National Federation of Cooperative Sugar Factories Ltd, which account for 48% of the national output. The area under the crop will increase in Uttar Pradesh and Maharashtra, the biggest growers, he said.

Prospects for higher Indian output may halt a rally in raw-sugar futures in New York and extend a global glut into a fifth year. A bigger Indian harvest will boost exports of subsidized raw sweetener, bridging any potential decline in supplies from Brazil due to dry weather.

“Farmers are opting for cane even if they are getting lower prices this year as there is assured demand and return for the crop,” said Sanjeev Babar, managing director of Maharashtra State Cooperative Sugar Factories Federation, which represents 173 mills. Reservoirs are full and good rainfall last year has improved moisture in soil.

India announced a cash subsidy for exports of as much as 4 million tonnes over two years and interest-free loans to mills to allow them pay arrears to farmers. Producers including Bajaj Hindusthan Ltd and Shree Renuka Sugars Ltd are betting on exports to prevent stockpiles expanding from a five-year high.

Competitive crop

“Farmers will stick with cane as no other crop is as competitive,” according to Avdhesh Mishra, president of the Cane Committees’ Association, a grouping of farmers. “Even if payments are delayed, farmers know that mills will clear the dues,” he said by phone from Gorakhpur in Uttar Pradesh on Wednesday.

Cane production in Maharashtra will probably jump 26% to 85 million tonnes in 2014-2015, Babar said. Sugar output may climb 17% to 9 million tonnes if the monsoon is normal, he said. Farmers planted the crop on 565,000 hectares as of 19 March, compared with 482,000 hectares a year earlier, agriculture ministry data showed. The area in Uttar Pradesh was little changed at 1.22 million hectares, the data show.

“There is a turnaround in domestic sentiments after the government decided to subsidize exports of raw sugar and a downward revision in output this year,” said Sudha Acharya, a senior analyst with Kotak Commodity Services Ltd in Mumbai. “The increased demand for summer also pushed up prices. Besides, the global rally in prices due to weather woes in Brazil helped Indian sentiments.”

Futures in New York rallied 14% in February, the biggest monthly advance since June 2011. The contract for May delivery rose 2.3% to 17.36 cents on ICE Futures US on Wednesday. Futures in Mumbai climbed to Rs.3,077 per 100kg on Wednesday, the highest since August.Monsoon rainfall was the highest since 2007 last year, boosting water levels in the nation’s reservoirs, the India Meteorological Department estimates. Water levels are 24 percent above last year, according to water resources ministry data.

Source:- livemint.com

India’S Spice Exports Surge 41% During April-Dec 2013

Riding on the excellent export performance of mint, chilli and seed spices, India’s spice exports has registered a 41 per cent growth in terms of rupee value during April-December 2013.

The period witnessed a total export of 57,1680 tonnes of spices and spice products valued ?9,433 crore as against 44,9926 tonnes valued at ?6,696 crore during April-December 2012. An increase of 27 per cent has been registered, both in terms of volume and dollar value.

The steady growth of spice exports reiterates the unshaken global demand for Indian spices. The conspicuous export performance of mint, chilli, value-added products and seed spices points to a promising future for the Indian spice industry, A Jayathilak, Chairman, Spices Board India told reporters here.

He further added that spice is the only one sector which is recession proof as the eating habits of people globally has not changed during the slowdown period. Central and South America and Africa have emerged as the fastest growing markets for spices as the traditional markets in US and Europe are saturated, he said.

Jayathilak pointed out that 92 per cent of the target in terms of volume and 91 per cent in terms of value set for spice exports during FY 2013-14 has been achieved.

The seed spice basket had registered 78 per cent increase in volume and 89 per cent in value compared with April-December 2012. The total volume of 1,93,625 tonnes seed spices valued at ?1,906 crore has been exported against 1,09,067 tonnes valued at ?1,008 crore in the previous year.

Amongst the seed spices, cumin registered a prominent increase of 89 per cent in volume and 83 per cent in value with a total export volume of 96,500 tonnes valued at ?1,282 crore.

Mint and mint products, which includes mint oils, menthol and menthol crystals, topped the item-wise list, in terms of value, with an export turnover of ?2,202 crore and 17,850 tonnes in volume. Chilli netted a foreign exchange worth ?1,846 crore with a total export volume of 2,05,500 tonnes.

Value-added products such as spice oils and oleoresins fetched ?1,242 crore by exporting 8,665 tonnes. Pepper and cardamom (small) marked an increase of 41 per cent and 23 per cent respectively in value, with a corresponding export volume of 15,350 tonnes and 2,080 tonnes. The exports of pepper and cardamom (small) were valued at ?651 crore and ?164 crore respectively.

Source:- thehindubusinessline.com

Major American Port Eyes Expanding Indian Businesses

A major American port has entered into an agreement with an Indian shipping company to gain more business both in steel imports and capital investment.

Located in the US state of Louisiana, the New Orleans port has reached an agreement with India's Samsara Shipping to represent the Port in India.

"The Port of New Orleans is well positioned for growth in imported steel products, as it offers excellent connectivity via barge, rail and truck to major oil and gas projects in the United States and Canada," port president and CEO Gary LaGrange said.

"With India's fast-paced economic growth, we see opportunities to grow two-way trade between the Port and India through a variety of commodities," he added.

The New Orleans port is the 6th largest port in the US based on volume of cargo handled and 13th largest in terms of value of cargo.

He said while the marketing focus will be on steel for oil and gas projects, the port will also target apparel, furniture, machinery and retail merchandise.

"We welcome the Port of New Orleans to India and Samsara shall provide the right platform to explore the possibilities of growth for the Port in the land of opportunities," Group president and CEO of Samsara Group India Mukesh Oza said.

In its media note, the port of new Orleans said India is a significant player in the global steel market and is responsible for meeting the demand of many US customers.

In addition, India imports many products from Louisiana, including forest products, synthetic rubber and various chemical commodities, it said.

Under the deal, Samsara Shipping, which has 54 offices in 44 locations across India and keeps track of which companies are looking to expand, which ones are already exporting to the US and businesses that need to import products from outside India, will submit monthly reports to the Port of New Orleans for a one-year, USD 3,000-a-month contract.

"We wanted better coverage and more information about the Indian market," chief commercial officer at the port Robert Landry said.

Source:- business-standard.com

Ruchi Soya Expects India's Sunflower Oil Imports To Hit Record High

India's sunflower oil imports are likely to jump 54 percent to a record high in the year to October 2014 as the world's biggest edible oil importer trims palm oil purchases to make room for the soft oil, said Dinesh Shahra, managing director of Ruchi Soya Industries Ltd .

The rise in sunflower oil imports would provide support to prices that are under pressure due to a record crop in top producer Ukraine, but will cap palm oil prices that have risen in the last two months on a likely drop in production in top two producing countries.

"We are expecting palm oil imports would drop significantly to around 7.4 million tonnes from 8.17 million tonnes last year due to price spreads in favour of soft oils," Managing Director of the country's biggest edible oil buyer said.

India is likely to buy 1.45 million tonnes sunflower oil in 2013/14, higher than the previous record purchase of 1.1 million tonnes in 2011/12, Shahra said. India imports most of its sunflower oil from Ukraine and palm oil from Indonesia and Malaysia.

The country's total edible oil imports are set to rise by 4 percent in 2013/14 to 10.8 million tonnes due to higher imports of soft oils like sunflower and soyoil, he said.

The price gap between crude palm oil and crude sunflower oil narrowed to $47 per tonne in February, compared with $430 per tonne during the same period last year, according data compiled by Solvent Extractors Association.

Source:- reuters.com

Gold Shipments Into India Seen Rebounding By Billionaire Jeweller

Gold imports by India, the second- biggest consumer, will rebound in the second half as a new government may ease trade curbs while festivals and weddings spur demand, said billionaire jeweller T.S. Kalyanaraman.

“The pickup in shipments from mid-year will help overseas purchases over 2014 match the 825 tonnes imported in 2013,” Kalyanaraman, chairman of the Thrissur-India based Kalyan Jewellers Ltd, said in an interview. “The curbs on bullion will probably be removed as smaller jewellers are struggling to get raw material, spurring increased smuggling,” he said on Wednesday.

Prime Minister Manmohan Singh raised the import tax on bullion three times last year and tightened financing norms to rein in a record current-account deficit and reverse a slump in the rupee. The controls cut shipments, narrowing the deficit to the smallest in at least four years in the fourth quarter as the currency rebounded. The opposition Bharatiya Janata Party (BJP) is leading in opinion polls before voting that starts 7 April.

“Imports will be slow till June, and then the trend will be the opposite and we will land with the same figures as the previous year,” said Ramesh Kalyanaraman, executive director and the chairman’s son. “Sudden antibiotics are necessary when somebody is ill. But it should be a temporary thing, and we believe that the government will take off the curbs soon.”

A rebound in Indian demand may help sustain bullion’s gains this year amid forecasts by Goldman Sachs Group Inc. and Societe General SA that the metal may drop below $1,000 an ounce. Gold for immediate delivery traded at $1,304.73 an ounce at 5:03 am in Mumbai, set for a second weekly loss on expectations US stimulus will be cut. The loss pared this year’s rise, spurred by haven demand on tension in Ukraine, to 8.2%.

Record premiums

India was surpassed by China as the largest consumer last year as imports slumped 57% to 205 tonnes in the six months to December from a year earlier, according to the World Gold Council. Sales fell at retailers including Gitanjali Gems Ltd and Titan Co. Ltd in the quarter ended December as premiums paid by jewellers rose to a record $160 an ounce over the London cash price because of a shortage of metal in the local market.

India, which imports almost all of the gold it consumes, accounted for 25% of global demand in 2013, the London- based WGC estimates. Official imports fell 4% to 825 tons in 2013, while unofficial flows almost doubled to 200 tons, WGC data show. China consumed a record 1,065.8 tonnes last year.

“If you add the smuggled gold, demand in India will be 40 to 50% more than in China,” Kalyanaraman said. “Demand is very much there as a lot of small, organized players are selling without bills and not showing in official figures.’

Rupee’s rally

The Reserve Bank of India estimates bullion contributed to almost 80% of a record $87.8 billion deficit in the year ended 31 March. The shortfall this year will be contained below $40 billion, finance minister P. Chidambaram said on 7 March, less than the $70 billion target. That helped to spur a rally in the rupee to an eight-month high.

“The current-account deficit is under control and that might provide some kind of comfort for the new government to look at reviewing gold restrictions,” said Harish Galipelli, head of commodities and currencies at JRG Wealth Management Pvt in Hyderabad. Pressure from the industry is increasing and also the imports from other channels are rising.

Source:- livemint.com

Rupee Down 8 Paise Against Dollar In Morning Trade

The rupee dropped 8 paise to 60.22 per dollar in morning trade on Thursday due to month-end demand for the US currency from importers, triggered by its firm value overseas.

However, sustained foreign capital inflows into equity market restricted the rupee’s fall, forex dealers said.

The rupee resumed lower at 60.21 per dollar as against Wednesday’s closing level of 60.14 at the Interbank Foreign Exchange (Forex) Market.

It hovered in a range of 60.27—60.17 per dollar before quoting at 60.22 at 1000 hours.

The month-end dollar demand from importers, mainly oil refiners, affected the value of rupee against the American currency, dealers said.

In the global markets, the euro was under pressure against the US dollar on Wednesday, dragged lower as European monetary policy officials indicated willingness towards supporting more stimulus measures to aid the regional economy.

Meanwhile, the benchmark BSE Sensex rose by 83.92 points, or 0.38 per cent, to 22,179.22 at 1000 hours, after hitting an all-time high of 22,188.63 in early trade.

Source:- thehindu.com

Receipts of foreign co. from software sales and support services provided in India couldn’t be taxed

IT/ILT: In view of decision of Jurisdictional High Court in case of DIT v. Infrasoft Ltd. [2014] 220 Taxman 273/[2013] 39 taxmann.com 88 (Delhi), addition made for sale of software and provisions of maintenance/other support services to customers in India being not taxable was to be deleted

Mere observations not supported by any fact couldn't be a ground to revoke registration of trust

Registration granted under section 12A cannot be cancelled on basis of general observation not substantiated by any fact

No abuse of dominance by DMRC if it restricts parties held guilty of contravening competition law fr

Competition Law : Restraint prescribed by opposite party in tender document as regards participation of parties guilty of contravening provisions of Competition Act, would not be discriminatory or unfair

HC remanded matter as Tribunal rejected assessee's claim for deduction without examining relevant do

IT: Where Tribunal without looking into documents rejected claim under sections 10B and 80HHC, it was proper to remit matter to assessing authority to decide afresh

No interest is chargeable on additional tax payable due to retrospective levy

CST & VAT : Where liability to pay tax arises by virtue of a retrospective levy/charge of tax, interest cannot be made chargeable in case of such retrospective levy of tax

Exemption from wealth tax denied as house wasn't occupied by assessee himself for the purpose of bus

IT : To claim exemption under items (2) and (5) of section 2 (ea)(i) it must be established that house is occupied by assessee himself for purpose of any business or profession carried on by him and property itself is in nature of commercial establishment or complex and used in a business or trade carried thereon

RBI further extends validity of ECB scheme for Civil Aviation Sector till March 31, 2015

FEMA/ILT : External Commercial Borrowings (ECB) for Civil Aviation Sector

Sum paid to NR assisting in production of TV shows wasn't FTS as it didn't make available technical

IT/ILT : Payment to a non-resident for production of programmes for purpose of broadcasting and telecasting shall not be treated as 'Fees for technical service' in terms of article 12.4 of India Singapore Tax Treaty

CCI : No abuse of dominate position by a manufacture of Scotch as other parties also available in ma

Competition Law : Presence of various competing brands of Scotch and imported whiskey in relevant market for whiskey in India, rules out dominance of OP, a producer of scotch whiskey, in relevant market

Trust can't be deprived of registration on mere reasoning that it undertook services of a commercial

IT : Where assessee was engaged in educational activities, merely because it engaged Z, a commercial venture for setting up of school or to provide educational programs to school of assessee, it would not make assessee disentitled for registration

CBDT notifies revised guidelines for approval of agricultural extension project under sec. 35CCC

IT : Income-Tax (Third Amendment) Rules, 2014 - Amendment in Rule 6AAE and Substitution of Rule 6AAD

Steamer agent providing services to foreign principal amounted to export of services

Service Tax : Where a steamer agent provides services to foreign principal and gets consideration in convertible foreign exchange, such service amount to 'export of services' and cannot be charged to service tax.