Exemption denied to a trust as construction of commercial building wasn't in its object clause

IT : Where assessee, a charitable trust, claimed exemption under section 11, since funds received by assessee by way of donation had been utilized for construction of commercial building and none of clauses of trust provided for construction of building for charitable activities, it was not eligible for exemption under section 11

HC directs AO to await the finding of larger bench of SC on levy of surcharge in block assessment

IT: Where Assessing Officer in block assessment proceedings levied surcharge under section 113 upon assessee and Tribunal deleted same, order passed by Assessing Officer deserved to be restored with a direction to him to await decision of larger Bench of Supreme Court on a similar issue and to give effect to order only after decision of larger Bench of Supreme Court

Commencement of charitable activities not a pre-condition to grant registration to trust; HC allows

IT: Commencement of activity is not a condition precedent for grant of registration under section 12AA

Delay in filing appeal due to unclear statutory provisions is not a valid excuse to seek condonation

CST & VAT : Where assessee against assessment order filed appeal before Appellate Commissioner late by 836 days and sought condonation of delay contending that when Assessing Officer passed assessment order law was not clear and it was only when Tribunal rendered its judgment in case of Reliance Industries that interpretation of statutory provisions became clearer and upon coming to know of such judgment it preferred appeal, explanation rendered for condonation of delay was not sufficient

Funds available in near future after the date of advance were deemed to be utilized for such purpose

IT: Where assessee was able to show possibility and anticipation of availability of own funds, may be exactly not on date of investment or advancement of loan but, in a very near future date or within a reasonable short period of time from date of such investment, presumption would be that advancement of loan/investment was made by assessee from his own funds

Onus to prove unreasonableness of sums paid to related parties under sec. 40A(2) is on AO, rules HC

IT: For making a disallowance under section 40(A)(2), onus to prove unreasonableness is on Assessing Officer

Separate notice isn’t required for turnover escaping assessment when regular assessment is pending

CST & VAT : When proceedings under regular assessment are pending, there is no requirement to issue separate notice for turnover escaping assessment

HC quashed plea against ex-director who didn't participate in Mgmt. of co. but failed to resign from

CL : Where petitioner-ex-directors had not participated in management of affairs of company in liquidation but had not taken steps to withdraw from management, proceedings initiated against petitioners for default in withholding records of company were to be quashed

TPO isn't supposed to test business expediency of 'royalty' paid to AE along with its ALP benchmarki

IT/ILT : In transfer pricing proceedings, TPO could not sit in judgment on business and commercial expediency of assessee - company so as to conclude that payment of royalty made by assesse to its AE was unreasonable and, thus, ALP of said payment was to be taken as nil

AO couldn’t curtail standard relief of sec. 24 by segregating rental income and other charges withou

IT : Where DVO on reference being made to him under section 50C, had fixed a price lower than that of Registration Authority, Assessing Officer had to proceed with assessment in conformity with estimate given by Valuation Officer

Raw cotton wasn’t akin to surgical cotton; no VAT on surgical cotton if tax was paid on purchase of

CST & VAT: Surgical cotton is different from raw cotton in terms of common parlance and end-use and two products are not interchangeable i.e., hospitals/households would not buy 'raw cotton' instead of 'surgical cotton'; hence, 'surgical cotton' is a manufactured product

Port Hedland Iron Ore Shipments To China Reach Record On Demand

Iron ore exports to China from Australia’s Port Hedland climbed to a record last month as signs of rising steel production in the world’s biggest buyer boosted demand and miners increased supply.

Shipments from the world’s largest ore-export terminal totaled 27 million metric tons in March compared with 21.3 million tons in February and 19.1 million tons a year earlier, data on the port authority’s website show. Total exports were also a record at 34.4 million tons last month, rising from 27.8 million tons in February and 24.9 million tons in March 2013, the data show.

China this week outlined a package of measures including railway spending and tax relief to support the economy after a slowdown endangered Premier Li Keqiang’s target of 7.5 percent growth this year. Daily crude steel production was 2.096 million tons in mid-March, up from 1.97 million tons in mid-February, according to Shanghai-based Xiben New Line on its website, citing data from the China Iron & Steel Association.

“You see a pick-up in March as the steel industry starts ramping up,” said Daniel Morgan, an analyst for UBS AG in Sydney. “It’s a healthy indication of supply side picking up and demand side picking up post winter.”

Australia is set to increase iron ore exports 19 percent to 687 million tons this year as miners including Rio Tinto Group, BHP Billiton Ltd. (BHP) and Fortescue Metals Group Ltd. (FMG) boost output, according the Bureau of Resources and Energy Economics. Inventories at Chinese ports reached a record 103.77 million tons in the week ended March 28, according to Beijing Antaike Information Development Co.

Iron ore with 62 percent content delivered to the Chinese port of Tianjin rose 0.2 percent to $115.50 a dry ton yesterday, according to The Steel Index Ltd. Prices have dropped 14 percent this year.

Source:- bloomberg.com

Asian Gas Buyers Trying To Break Out Of Rigid Market Structure

Asian gas and power companies are starting to pair up for joint purchases of LNG after more ambitious efforts to form a regional group to win lower prices and less rigid contracts have stalled.

Japan, India, South Korea and other Asian gas importers - who take about 70 percent of global liquefied natural gas (LNG) exports - have been trying to form a buyers' club to use their dominant market presence to delink contract prices from oil and allow importing companies to resell any excess cargoes.

But after two meetings to discuss a regional buyers' group last year, a third was cancelled in February and no others have been scheduled. The issue was also not on the official agenda last week at a gas industry conference in South Korea.

Tired of a lack of progress on the government-led initiative, a number of firms - including Japanese power companies and state gas utilities in India and South Korea - are looking at other ways to buy LNG collectively, with the gain of any advantage becoming more critical as import costs soar.

Asia's rising demand for LNG pushed spot prices to near-record levels above $20 per million British thermal units <LNG-AS> in February, while the gas import bill in top importer Japan rose nearly a fifth last year.

"As long as there is no structural change to the supply of LNG or gas into the Asian market, prices will remain high," Hirobumi Kawano, the head of state-run Japan Oil, Gas and Metals National Corp (JOGMEC), told Reuters last week at a conference in South Korea.

LNG has traditionally been sold in Asia under long-term contracts linked to benchmark oil prices, giving buyers supply security and producers of the fuel a guaranteed return on billion-dollar investments.

And while co-buying is unlikely to give companies a break on prices, it would improve flexibility by allowing them to shift cargoes between two or more delivery points, executives say.

With no broader grouping, there may be few other ways for Asian LNG buyers to win any leeway in their contracts.

Participants at the industry meeting in South Korea last week said that just how cool Asian governments had gone on the buyers' club idea could be measured by the fact that few Japanese companies were represented by senior management at the conference, apart from Chubu Electric Power.

"Japan is not that far away. So if you can't even get Japanese buyers to a major conference, what chance does the Asian buyers' club see in this regard?" asked Noel Tomnay, head analyst of global gas research at Wood Mackenzie.

Japan's LNG imports in 2013 hit a record 87.5 million tonnes at a highest-ever cost of $69 billion, up 17.5 percent from the previous year.

Joint Agreements, Import Costs

Chubu Electric and Indian state gas utility GAIL last week signed a deal to consider cooperation in joint procurement of LNG; and the head of state-run Korea Gas Corp (KOGAS), Jang Seok-hyo, said his company has also agreed with Japanese companies to co-purchase when volumes are available.

Otherwise commitments from companies remain few. Tokyo Electric Power Co's proposal to domestic and foreign firms to jointly procure up to 40 million tonnes of LNG a year, for instance, has drawn little interest.

Import costs, industry leaders said at the meeting, are not likely to drop until projects in Australia and U.S. shale gas exports bring a new wave of LNG toward the end of the decade.

Asian gas prices, which cover chilling and shipping costs, are at least three times prices in the United States, where the shale boom has reduced what consumers pay for piped gas.

Importing countries have also proposed creating a regional trading hub to mirror the market structure in the United States and Europe and allowing for more spot and short-term trading.

But the idea has been slow to develop, with a lack of infrastructure such as pipelines and storage terminals, as well as the absence of harmonized regulatory rules in the region.

"The hubs in (the United States and Europe) took 20 years to develop. There's no reason to think that things will be any different here," said Chris Holmes, senior director for Global Gas & LNG at IHS Global.

Despite all the talk of creating a trading hub and increasing market liquidity, rapidly rising demand from China and South America is prompting some traditional buyers in Japan, South Korea and Taiwan to return to the reliability and security of long-term contracts.

KOGAS, the world's largest corporate buyer of LNG, currently buys 20 percent of its gas in the spot market or under short-term contracts, but says it wants to reduce that proportion to 5 percent to lower price and supply volatility.

"Spot gas prices have on average cost 10 percent more than long-term supply," said Jang, the company's chief executive."I think it is better to reduce the spot and short-term procurement to secure the supply."

Source:- newindianexpress.com

Coffee Exports From India Dropping As Rains Shrink Harvest (1)

Coffee shipments from India, Asia’s third-largest grower, are poised to fall this year as a rally in global prices deters buyers from Italy to Russia and after unseasonal rains cut output for the first time in six years.

Exports may decline as much as 10 percent from 312,756 metric tons in 2013, said Ramesh Rajah, president of the Coffee Exporters Association of India. The harvest probably dropped below 300,000 tons in the 12 months started Oct. 1 from a record 318,200 tons a year earlier, he said.

Reduced supplies from India, where robusta accounts for 70 percent of output, may help a surge in prices of the beans used by Nestle SA in instant drinks. Futures of the arabica variety, brewed by specialty companies including Starbucks Corp., advanced in New York to a two-year high in March and robusta in London jumped 22 percent this year as drought threatened crops in Brazil, the largest producer and exporter.

“It has been an exceptionally bad year for production in India because of adverse weather last year and the weather has been a bit dry this year, which is worrying for the next season,” Rajah said by phone from the southern Indian city of Bengaluru. “Global prices have moved up and this has reduced demand. Export volumes will go down this year.”

Robusta jumped as much as 2.8 percent to $2,070 a ton on NYSE Liffe today and was at $2,051 by 2:41 p.m. in Mumbai. Arabica rose 0.9 percent to $1.761 a pound on ICE Futures U.S. after reaching a two-year high of $2.0975 in March.

Brazil Drought

“Drought in January and February has hurt the Brazilian crop and prices should be sustained at these levels in the medium term,” Rajah said. Production is estimated at 47 million bags to 49 million bags this year compared with 49.8 million bags last year, according to Brazil-based trader Comexim Ltda. A bag is equal to 60 kilograms or 132 pounds.

The state-run Coffee Board cut its crop estimate for 2013-2014 to 311,500 tons in January from a record 347,000 tons predicted at the start of the season, citing heavy rains in the Karnataka region, which represents about 70 percent of output.

Exports rose 2.4 percent to 99,896 tons in the first three months of 2014 from a year earlier, less than the 15 percent increase in the first two months, according to the board. Shipments included 44,329 tons of robusta, 29,363 tons of arabica and 26,123 tons of instant coffee, board data showed. Italy, Russia and Germany accounted for about 40 percent of total shipments last year, board data showed.

“Growers are holding onto their stocks expecting prices to rise further,” Anil Kumar Bhandari, a member of the board, said by phone from Bengaluru. “We should be able to export whatever surplus we have.”

Source:- businessweek.com

CA wasn’t guilty of professional misconduct if he unilaterally revised his audit report to rectify a

CA : Conduct of Chartered Accountant in not specifically mentioning audit report submitted by him as a revised report would not fall within parameters of misconduct under section 22

Provision for retirement benefits to employees computed on basis of ‘service weightage’isn’t an allo

IT/AAA : Provision for retirement benefit created on the basis of service weightage of an employee couldn't be allowed to be deducted as it was just a provision and could not be termed as gratuity fund or any other welfare fund under section 40A(9)

Penalty can’t be waived off if it is followed by suppression of acts and invocation of extended peri

Service Tax : Once it is held by adjudicating authority that there was suppression of fact on behalf of assessee and extended period is invocable, there can not be any reasonable cause for failure to pay service tax and, therefore, penalty under section 78 cannot be waived under section 80

Taiwan, India Agree Temporary Import Duty Waiver

Taiwan's Ministry of Finance (MOF) has announced that it has been agreed with India that, under a reciprocal arrangement, goods imported temporarily into either country for marketing purposes may qualify for duty-free importation.

The agreement was originally signed in March 2013 between the Taipei Economic and Cultural Center in India and the India-Taipei Association, and came into effect on April 1 this year, after the completion of the both sides' legal procedures. Carnets simplifying the customs procedures for the temporary imports are to be issued by the Taiwan External Trade Development Council and the Federation of Indian Chambers of Commerce and Industry.

To claim exemption, the goods must be imported for the purpose of participating in exhibitions and international fairs, the investigation of market conditions through research, the holding of marketing seminars, the generation of business on visits, and other such temporary business activities.

It is hoped that the arrangement will provide advantages for businesses in both countries, by reducing their export costs and competitiveness. There should be a substantial increase in Taiwan and India's bilateral business contacts, and an expansion in bilateral economic and trade relations.

Source:-tax-news.com

India's Thermal Coal Imports Rise 22% In Fiscal 2013-14 At Key Ports: Ipa

India's 12 major state-owned ports handled 71.6 million mt of thermal coal imports during fiscal 2013-14 (April-March), up 22% year on year from 58.6 million mt, according to data released Thursday by the Indian Ports Association.

Coking coal imports increased 18% year on year to 33.1 million mt in fiscal 2013-14, the data showed.

Paradip port on India's east coast received the most thermal coal last fiscal year at 25 million mt, up 19% year on year. Mormugao port on the west coast received the most coking coal at around 7.5 million mt, up 13.6% year on year, according to the data.

The 12 ports are Kolkata, Paradip, Visakhapatnam, Ennore, Chennai, VO Chidambaranar (Tuticorin), Cochin, New Mangalore, Mormugao, Mumbai, Jawaharlal Nehru Port Trust and Kandla.

Source:- platts.com

Extend Anti-Dumping Duty On Raw Silk Imports From China

Batting for domestic silk producers, apex industry body ASSOCHAM has recommended extension of anti-dumping duty on imports of raw silk from China till December 2015 in order to boost country's raw silk production.

"India's silk industry is an employment oriented sector as it provides jobs to over 7.6 million people across 51,000 villages operating over 3.28 lakh handlooms and over 45,800 powerlooms with over 8.14 lakh weavers," noted a study titled 'Future of Indian Silk Industry,' conducted by The Associated Chambers of Commerce and Industry of India (ASSOCHAM).

In January 2003, Government of India had imposed an antidumping duty on imports of Mulberry Raw Silk (not thrown) of 2A grade and below from China which remained in force until January 2008 and was subsequently extended till January 2014 after a sunset review.

"Clocking compounded annual growth rate (CAGR) of about eight percent, India's total silk imports have increased from over USD 124 million in 2000-01 to about USD 312 million 2012-13 with raw silk alone comprising for about 73 percent of these imports worth over USD 227 million," highlighted the ASSOCHAM study.

China is biggest exporter of raw silk to India accounting for almost 99 percent of exported raw silk worth USD 224.5 million as of 2012-13, highlighted the study carried out by the ASSOCHAM Economic Research Bureau (AERB). "Raw silk imports from China have grown at over seven percent CAGR during 2000-01 and 2012-13."

Consumption of raw silk in India is likely to rise together with growth in per-capita income which rose from Rs 24,143 in 2004-05 to Rs 39,961 in 2013-14 and also due to increase in consumption expenditure on clothing, it added.

"Supply shortages is the prime issue being faced by Indian silk industry (weaving in particular) as there is a shortfall of over 5,000 metric tonnes (MT) resulting in dependence on silk imports to fulfill domestic needs," said D.S. Rawat, secretary general of ASSOCHAM while releasing the chamber's study.

"Silk import restrictions have two facets; one is concern of sericulture farmers opposing cheap Chinese raw silk imports threatening their livelihood, while the other issue is of the weaving community which requires raw silk to meet the rising demand," said Rawat. "Thus there is a need to strike a balance between the two warring sections of the industry by periodically reviewing the import policy for raw silk taking into account balanced interests of both sericulturists and export manufacturers."

In its study, ASSOCHAM has also highlighted that inconsistency in quality of domestically available silk makes it difficult for use in powerlooms thereby affecting the weaving process which results in dependence on imported raw material.

Besides, silk also faces threat from the competition that seems to be emerging from synthetic fibers such as polyester, it added. “A focused and planned silk promotion campaign could help get back the interest of the consumers.”

With a view to improve silk production in India, the ASSOCHAM has suggested that state governments to promote tie-up of weaver cluster with raw silk production units for establishing close linkage between forward and backward sub-systems resulting in greater efficiency, more so as sericulture and silk industry is highly scattered and unorganized.

Besides, the state governments may also facilitate establishment of weaver centers to empower and enlighten the producers with latest information on research and development, technological advances, new designs to impart technical skills related to weaving techniques and conducting feasibility studies to identify new potential mulberry centers may also help to boost production and further improve both productivity and product quality.

There is a need to undertake wide-scale educative initiatives to disburse the information amid weaving community as they are mostly unaware of welfare schemes provided to them by the State and Central Governments, ASSOCHAM has further suggested.

Source:- smetimes.in

India's Mar '14 Gold Imports Likely To Be On Higher Side: Gjf

The gold imports by the country during March are expected to jump higher from February levels, noted the country’s biggest jewellery trade body. According to Haresh Soni, Chairman, All India Gems and Jewellery Trade Federation (GJF), the RBI’s decision to grant gold import licenses to five new banks will take the country’s gold imports in March to higher levels.

Earlier, during mid-March, the RBI had allowed five domestic private sector banks to import gold as part of easing stringent rules of import. The gold import permissions were being granted to HDFC Bank, Kotak Mahindra Bank, Axis Bank, IndusInd Bank and Yes Bank. According to Haresh Soni, these five banks have wide presence across India. The competition arising out of the entry of new banks may result in state-owned agencies clearing off their stock against orders.

The gold premiums in India declined sharply on hopes of increased supply of the precious metal. The premiums fell to as low as $25-$30 per troy ounce, a fall of nearly 85% from the peak of $160 during December last year.

Haresh Soni also urged the government to ease the pressure on legal gold imports into the country to save the struggling gems and jewellery industry.

Industry sources view the RBI’s decision as the first step towards easing of strict gold import norms. The country’s Finance Minister, P Chidambaram had announced during a press briefing that the government may consider further relaxations on 80:20 norms after necessary consultations with the RBI.

Source:- metal.com

Rupee To Weaken Slightly Over Next Year - Reuters Poll

The rupee's recent rally is set to reverse course later this year as upbeat sentiment ahead of a general election wears off and economic growth remains slow, a Reuters poll found.

Still, the rupee will not lose much and is expected to trade at around 60.61 to the U.S. dollar in a month before weakening further to 62 in a year, Thursday's poll of 30 currency strategists showed.

Expectations that the pro-business opposition Bharatiya Janata Party (BJP) will win the election and, in turn, attract more investment is in part responsible for the benchmark BSE Sensex hitting a new lifetime high of 22,620.65 on Thursday.

The rupee reversed last year's losses of more than 11 percent against the U.S. dollar and has gained over 3 percent so far this year. It hit an eight-month high of 59.57 to the U.S. dollar on Wednesday.

That is well above the near-18-year low of 68.80 that it hit last August when a sell-off by investors battered the rupee along with other emerging market currencies.

That sell-off was mostly in reaction to the U.S. Federal Reserve's plan to taper its massive stimulus programme, which made investors dump riskier assets, including the rupee, combined with a slowdown in India's economic growth to a four-year low.

While investor sentiment has since improved, strategists do not expect the rupee's strength to continue.

"The kind of (rupee) appreciation we are seeing today is more because of foreign institutional investment flows which are fairly gung-ho because of elections and what they perceive would be a strong, favourable government inclined towards economic growth," said Madan Sabnavis, chief economist at CARE Ratings.

"Right up until the time when the election results come out, things will remain positive. Then, I think we will probably get back to reality and see what kind of a government comes in and how differently are they able to do things."

Indeed, the new government will be faced with the same challenges as the current one - high inflation and borrowing rates, weak industrial production and muted demand.

The ruling Congress-led coalition government has been under severe criticism for its inaction over pursuing key reforms, which has hurt economic growth and investor sentiment.

Traders have also speculated that the Reserve Bank of India has been buying dollars recently to shore up its foreign exchange reserves and possibly capping the currency's strength.

RBI Governor Raghuram Rajan told a TV channel on Wednesday that a "substantial" strengthening in the rupee to 45 or 50 per dollar could hit exports, but added that the central bank was fine with a "certain amount of leeway" in the currency.

On Tuesday, the RBI left its key repo rate unchanged at 8 percent and said it would keep rates on hold in the near term if inflation eases further.

The Fed will likely raise its key interest rate in the second half of 2015, according to top Wall Street economists polled by Reuters. That will also help the dollar gain and, in turn, push the rupee lower.

"Over time, the Fed's policy shift is supportive of the dollar and that's the most important reason why we see some weakness in the rupee," said Nick Bennenbroeck, head of currency strategy at Wells Fargo Securities.

Source:- in.reuters.com

Case remanded to decide whether sec. 194C could be triggered on sums paid to NGOs towards mid day me

IT: Tribunal remitted issue back to Assessing Officer to determine as to whether assessee would be entitled to benefit of Circular No. 502 dated 27-1-1988 in respect of mid-day meal scheme and whether NGOs to whom payments were made were duly registered under section 12A

Winding-up petition admitted as respondent co. didn't pay agreed dues and was accused of creating fa

CL : Where respondent had not complained that goods were defective or substandard at time when goods were received, dispute raised by respondent as regards quality of goods after filing of winding up petition for non-payment of dues was not bona fide

Recovery of unpaid estate duty on gifted property out of sum received on its transfer won't attract

IT: Where settler of assessee-trust gave a property to trust which was subject to first charge under Estate Duty Act, in view of fact that on acquisition of said property entire compensation amount was appropriated for payment of estate duty arrears, and nothing remained there for utilisation of trust, there was no violation of provisions of section 13(1)(c) and 13(3) and, therefore, assessee's claim for exemption under section 11 was to be allowed

Depart. couldn't deny refund claim arising from order of Commissioner (Appeals) unless such order wa

Excise & Customs : Where Commissioner (Appeals) has held in favour of assessee, department must allow refund claim in pursuance thereof and cannot withhold such refund on ground of pending appeal, especially when Tribunal has dismissed stay application filed by revenue

No writ to challenge attachment of bank account by assessee if no objection was raised against it be

IT: Where no objection was raised and/or representation filed before Tax Recovery Officer against attachment of bank account and assessee had accepted same, assessee could urge its grievance only before Commissioner (Appeals)

Profitable Cos couldn't be excluded from comparables in later years only as these turned into loss m

IT/ILT: Where two companies had made profit in earlier years and were included as comparables in earlier years, they could not be excluded from list of comparables just for reason that for year under consideration these two concerns had incurred losses

Scrutiny notice would be valid if it was served on next working day, the last date being Sunday

IT: Notice under section 143(2) having been served upon assessee on very next working day due date being Sunday, was valid

Renting of mobile tower would attract lower TDS deduction under Sec. 194-I and not under Sec. 194C

IT: Receipts from provision of passive infrastructure services to the mobile operators amount to renting and would attract lower TDS deduction under section 194-I and not under section 194C

Firm must furnish registration certificate under partnership Act to prove its existence for VAT purp

CST & VAT : Where department had alleged existence of firm even prior to registration with department, assessee must produce its registration certificate under Partnership Act; a claim made for first time before High Court that assessee was a sole proprietorship concern, could not be accepted

SAT upholds penalty on violation of SEBI Takeover norms as appellant acquired bulk shares by acting

SEBI: Transfer of bulk shares of same rate and in equal numbers to all eight entities within two days indicated that appellants had acted in concert with each other to acquire shares/voting rights of target-company

ITAT committed apparent mistake as it passed order relying partially on a judicial precedent

IT : Where Tribunal passed impugned order relying upon only one portion of an earlier order and ignoring other portion of said order, it constituted a mistake apparent from record and, thus, assessee's application seeking rectification of Tribunal's order was to be allowed

Corresponding New Banks to ensure transfer of unclaimed dividend to earmarked a/c within 90 days of

COMPANIES ACT, 1956/INDIAN ACTS & RULES : Investor Education and Protection Fund (Uploading of Information Regarding Unpaid and Unclaimed Amounts Lying With Companies) Amend ment Rules, 2014 - Amendment in Rules 2, 3 and Form 5 Inv

No writ to challenge attachment of bank account by assessee if assessee if no objection was raised a

IT: Where no objection was raised and/or representation filed before Tax Recovery Officer against attachment of bank account and assessee had accepted same, assessee could urge its grievance only before Commissioner (Appeals)